Quick Response (QR) codes have been around since 1994 and have been used for a variety of purposes, ranging from payment initiation to marketing campaigns, and more recently to help trace Coronavirus exposure and vaccination status. Now positioned as the top option as your personal payment proxy, how can we leverage this existing technology for immediate payments?
A decade or more ago, experts warned retailers and fintechs to steer clear of QR. They felt it wasn’t a product they felt would take off due to it being as clunky, if not more, than a card payment – meaning there was very little value for the end-user. Fast forward to today and consumers around the world are using QR to pay merchants everyday.
It is reported that in China, 85% of UnionPay’s users pay using QR. Singapore makes use of an app that combines QR codes and creates a single multipurpose code that the user scans to complete their transaction with the payment app of their choice. Users in India are able to scan QR codes from their mobile banking apps to access their debit card accounts and immediately transfer payments into the merchant’s account. UK consumers use QR code systems where the payer scans the code through a third-party that connects them to their bank account.
So, how can South African banks take advantage of this kind of adoption when it comes to real-time payments?
With the concept of the Rapid Payments Program (RPP) coming into play soon, it is important that banks start to look into how they can make the most of existing systems in order to roll out the RPP to their customers fast and efficiently. As discussed previously, the use of static and dynamic QR codes is already a well-understood concept. Shoppers think of these types of payments as being easier, safer, and more accessible.
When the RPP comes into effect, enabling real-time transactions through QR codes is a great way for banks to help solve consumer’s fast-moving needs, as well as to solve merchants’ needs. Consumers will begin to expect to pay in real time and merchants will need their partner banks to provide the platform to do so.
One of the largest banks in South Africa, Capitec, already uses QR extensively – across their full merchant network, from informal to large retailers. Applying the same process with the RPP means that the smaller merchant will be able to immediately see the payment reflected in their account. In a South African context, this type of immediate payment will be crucial as it means the merchant has access to the payment value much faster.
The overlapping, primary goal of both the RPP QR code payments is to make transacting easier for all. This simple solution, as Lu Zurawski explored, is a way to re-use well-understood digital infrastructures like QR codes that are already a part of consumers daily lives, further reducing the need for complex, expensive acceptance infrastructures.
With an existing form of open payments in QR code transactions, there is no need to reinvent the technology that is already successfully serving millions of end-users. Leverage this technology cleverly and bring the ground-breaking RPP solutions to South Africa as soon as possible.
Chat to us today for more details about the RPP, or for further information on our QR Payments platform.