NCBA Loop Introduces Mandatory Purpose of Payment (POP) Codes for RTGS Transactions

NCBA Loop has announced the implementation of a mandatory Purpose of Payment (POP) code for all Real-Time Gross Settlement (RTGS) transactions effective August 12, 2024. This is inline with regulatory requirements from the Central Bank of Kenya (CBK), a new measure that aims to enhance transparency, security, and traceability in financial transactions.

A POP code is a descriptive field that outlines the reason for a transaction. By requiring this information for all RTGS payments, Loop seeks to improve fraud detection, reconciliation processes, and regulatory compliance.

Customers initiating RTGS transactions will be required to provide a clear and concise description of the payment purpose. Common examples of POP codes include “Salary Payment,” “Rent,” “Business Purchase,” and “School Fees.”

Benefits of POP Codes

• Enhanced Security: Detailed transaction information helps in identifying and preventing fraudulent activities.
• Improved Reconciliation: Accurate POP codes streamline the reconciliation process for both individuals and businesses.
• Regulatory Compliance: Adherence to POP code requirements ensures compliance with financial regulations.