Research has shown that South Africans are eager to adopt alternative ways of paying with 90% of respondents in the 2017 Sage Payments Landscape Report saying they are more likely to shop somewhere that offers them multiple ways to pay, including digital payments.
One of the many ways small businesses can accept digital payments is through the use of QR code technology. QR codes are a 2-D barcode that can be scanned by a smart phone’s camera and enables the transfer of information. SnapScan, a mobile retail payments solution backed by Standard Bank, is a local example, it allows merchants to accept digital card payments by simply displaying a QR code at the till, online or on a bill.
QR Code technology shows no signs of slowing down. Recently FNB announced that it would launch FNB Pay, an integrated smart payment service later this year. Using FNB Pay businesses and retail customers will be able to scan a QR code and make a payment directly from their FNB profile.
Cash exposes businesses to high cash handling and transaction costs, lost sales when customers don’t have cash or exact change to pay, and the threat of crime
Mastercard also recently announced a collaboration between Masterpass, its digital payment service, and South African mobile payments and loyalty rewards app, Zapper. Using QR code technology, Zapper provides all-in-one mobile payments, vouchering and loyalty services to a variety of businesses and brands. The collaboration will see South Africans now able to use the Zapper app to make mobile payments at nearly 50,000 Masterpass-enabled merchants nationwide.
The Mastercard Insights into the Informal Economy Report which looked at trends in payment instrument usage in the informal market found that while 96% of transactions are still conducted in cash among 1.5 million South African informal enterprises, 22% of informal market merchants interviewed said they would be interested in using a QR-code solution if it made economic sense and offered discounts.
Here are 3 benefits of QR codes that SA businesses should take note of.
1. It could offer a more convenient and safer alternative to cash payments
“The mobile brings the convenience and safety of cashless transactions to spaza shops, flea market stalls, trades people like plumbers and electricians, and other sectors where traditional card terminals are not a practical or affordable solution,” Gabriël Swanepoel, Vice President of Product Development and Innovation at Mastercard South Africa said in a recent Business Tech interview.
According to the report, cash exposes businesses to “high cash handling and transaction costs, lost sales when customers don’t have cash or exact change to pay, and the threat of crime”.
2. It’s shown to boost revenue
According to the same Mastercard study, merchants who made use of digital payment method QR codes saw their revenues climb by 10%.
3. Enables informal businesses to be incorporated into the formal financial system
According to Andrew Torres, group country manager for Visa Sub-Saharan Africa, for merchants this “lowers the cost of acceptance, and enables them to receive funds directly and securely to their bank accounts. This is critical in helping them manage their supply chain without any delay”.