There is no doubt that COVID-19 has played a role in expediting QR payments in South Africa. With a focus on staff and customer safety, this contactless payment method provides great advantages when dealing with the threats posed by the virus. This begs the question - is QR just a passing fad fanned by the pandemic? We believe the answer is no, and we have seven reasons why.
1. Standardisation at a national level
Thanks in great part to the market penetration achieved by organisations such as SnapScan, Zapper, and MasterPass, an initiative has been put in place by PASA (Payment Association of South Africa) to standardise the QR payment landscape in South Africa and align to international standards. This work started long before the Coronavirus appeared on the scene and will continue in earnest as we begin to navigate our way past this crisis.
2. Rapid Payments Project
Another national initiative currently underway involves the overhaul of the RTC (Realtime Clearing) rails in South Africa which deal with realtime account-to-account payments. These rails currently only allow for low-volume, high-value payments, but the scene is being set for high-volume, low-value rails to allow for frequent P2P (person-to-person) and P2M (person-to-merchant) payments at a very low cost point. The QR standardisation that is currently underway will incorporate these rails as well.
3. Widespread global adoption
China is the world's largest market in terms of purchasing power and therefore stands to yield significant influence over global payment trends. One such area of influence is the mobile payment arena which is very dominant. Such is the dominance of this payment type, that as of 2017, Chinese payment processors processed more than $15 trillion in mobile payments within the country, casting a shadow on every other market on the planet. But, rather than NFC-based tools like Apple Pay, Chinese consumers prefer to use QR code technologies with most of that $15 trillion in activity occurring via QR-based tools like WeChat Pay.
The question many would ask is whether the affinity for QR codes will impact markets outside China’s borders. The truth, of course, is that they already have. India is another global market force that is set to follow the trend of the Chinese in terms of QR code payments. QR payments have been available in South Africa for many years and will continue to grow, especially with adoption by major retailers.
4. SA awaits NFC with Apple and Google Pay
Whilst South Africa waits for international brands such as Apple and Google Pay to commit to this market, the demand for digital payments continues to evolve. QR codes offer a great interim technology, with an improved user experience similar to the benefits offered by NFC. Since they are device agnostic and accessible to anybody with a smartphone, it suggests that 80 - 85% of South Africa’s population are able to participate, based on the latest digital goods and services research.
5. Supports organisational digital payment strategies
One of the great benefits of QR code payments is that it creates a rich digital interactive experience with the customer. Having a customer open your app each time he wishes to make a payment is an engaging opportunity that any brand would want to take advantage of. Collecting valuable data on your customer as well as the upsell and cross-sell opportunities become an exciting proposition if done correctly. Our recent blog on super apps touched on just how important it is to leverage customer data.
Being able to offer multiple payment options is another benefit that shouldn’t be overlooked. If one of your traditional payment methods fails, the ability to continue to accept payments via QR will be a huge advantage - leading to no shopping cart abandonment and happy customers.
6. Great fit for social messaging apps
As social messaging apps continue to dominate many areas of our lives, their reach continues to expand beyond simply connecting users through chat and media. Most messaging platforms have their sights set on replicating the success achieved by WeChat Pay. QR codes are a perfect way to facilitate payments between users on these platforms.
7. Supports uses other than just payment
Finally, QR codes offer the ability to facilitate interactions that are more than just payments. By leveraging the EMVCo standard, organisations can embed other data in their QR codes, such as loyalty-based data fields for identification and rewards purposes. This greatly improves the user experience associated with identification for the purposes of loyalty. Other use cases are sure to be identified as QR payments become more widespread.
Do you want to build out your digital payments capability? Contact us today to chat about what Electrum can do for your business.
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