Head of Product Design

Ian Allan

Head of Product Design

What’s the potential for QR code payments in Africa?

For banks and mobile money services, the potential in this market is staggering. QR codes are the fastest way to roll out digital payments as an alternative to cash. For customers, it means they can make quick and easy payments by scanning the merchant’s unique code. For merchants, it means a lower barrier to entry for accepting digital payments.

Merchant payments are still a growth area for mobile money operators, so this is new territory for them. They already have well-established mobile money peer-to-peer transfer and cash in-cash out services, but they haven’t focused as much on promoting contactless payments made directly to merchants. The opportunity is substantial for mobile money services willing to commit to a strong go-to-market plan.

How should mobile money services respond to this technology?

Mobile subscribers want to have the latest and best solutions for greater convenience. Operators don’t have the luxury of sitting around and not innovating. Customers will move on if there is a more widespread and convenient solution in the market.

It’s only a matter of time before large mobile wallet providers bring competition to mobile money services that currently enjoy the lion’s share of the market. Mobile operators risk holding on to legacy solutions like USSD for too long and will find it difficult to quickly change their usual way of doing things in the face of new friendly solutions.

My suggestion is to prepare for change in advance. Yes, in some marketplaces in Africa, only one in five merchant customers have a smartphone. However, in other markets, especially urban marketplaces, smartphone penetration is already much higher and growing very quickly. As smartphone usage grows, QR code payments will gain popularity. At the same time, NFC-based payment solutions continue to complement QR codes; meeting the need in low-tier markets where basic phones are popular, and in high-tier markets where a growing number of customers have NFC smartphones.

What are the benefits of Youtap’s QR code solution?

Youtap’s solution is just one part of the contactless payments ecosystem we offer. Mobile operators and banks, which already have millions of subscribers and account holders, white-label our apps and take them to market.

Consumers and merchants don’t have to change to yet another payment provider to use the QR code solution – they just use the new payment app made available by their existing provider. And merchants don’t need to present a plethora of QR codes on their countertop for each payment provider; Youtap’s solution supports a standardized, interoperable QR code.

Youtap’s platforms also support NFC technology, including low-cost micro POS devices, integration to existing bank POS infrastructure, companion cards and ‘tap and pay’ using tags or wearables. These solutions reach all tiers of the market — from shopping malls to restaurants to motorbikes.

Another benefit of Youtap’s solution is that the bank or mobile money manager doesn’t have to worry about the technical side. They don’t have to develop their own apps or figure out how to integrate this new payment method, because we do it all for them. Youtap manages the generation of the QR codes to ensure they’re secure and meet emerging standards. The bank or mobile money service can focus instead on go-to market initiatives.

Finally, integration is fast (a few weeks) with Youtap’s cloud solution. We integrate the bank or mobile money service with our cloud payment processing platform, and then QR codes can be quickly rolled out to existing merchants. This is the best way to get started.

For more information about Youtap’s QR code solutions, contact sales-global@youtap.com.