QR Code for Mobile Payment

Why QR Code & Mobile Payment Technology is Africa’s Next Big Move

Africa is in a good position to adopt Quick Response Code (QR code) payment technology due to its large and fast growing mobile phone penetration and the absence of efficient traditional infrastructures in the continent.

QR code, a type of two-dimensional barcode (a machine-readable optical label that contains information about the item to which it is attached), consists of black squares arranged in a square grid on a white background, which can be read by an imaging device such as a phone camera.

Mobile Phone and QR Technology

Recent QR code systems are compatible with mobile phone as your phone camera can be used as scanner, and with the correct reader application you can scan the image of a QR code to display text, contact information, connect to a wireless network, or open a web page in the telephone’s browser.

This means you can access a brand’s website more quickly by scanning their QR code instead of manually entering a URL. Car park operators can use this technology to track and bill park users, and bus users can buy bulk tickets in the form of QR codes containing ticket information on their mobile phone from a bus company’s website. It can also be used in storing personal information for use by organizations where by access clearance are stored as QR codes on employee’s mobile phone.

Anyone can generate and print their own QR codes for others to scan and use by visiting one of several pay or free QR code-generating sites or apps. Apps for scanning QR codes can be found on nearly all smartphone devices.

QR codes can be used to pay for goods and services at checkout points in supermarkets or other point of sale (POS). It is used in the field of cryptographic currencies, particularly those based on and including Bitcoin, to share payment addresses, cryptographic keys and transaction information between mobile wallets.

One advantage of QR code use on mobile device is the ability to link a code to a location and use it to track where a code has been scanned. The application that scans the QR code retrieves the geo information using GPS and cell tower triangulation (aGPS) or by using the URL encoded in the QR code itself is associated with a location.

Africa’s Fast Growing Mobile Phone Market

Africa's mobile phone market

Africa’s mobile phone market | Image credit: Endeavor South Africa

According to International Telecommunication Union (ITU), Africa is the fastest growing and second largest mobile phone market in the world and 80% of Africans have mobile phones. According to the Mobile Economy 2017, GSMA Intelligence, there were over 1 billion mobile subscribers in Sub-Saharan Africa alone in 2016 and penetration rate is growing at 4.2% annually.

Mobile Banking and QR Payment Trends in Africa

According to a recent Businessday article, Nigeria and Kenya, regarded as countries with reasonably developed formal financial sectors, have formal bank accounts for only 10 % of their populations. This drops to about 6 % in Uganda, 5 % in Tanzania and Ghana with an average of 4 % in Francophone African countries.

But led by Kenya, many African countries are using mobile phone technology to access financial services and even by-passing traditional financial institutions and their limitations. Almost 60% of Kenyan population have a mobile money accounts.

Mobile banking allows you to conduct financial transactions using your mobile phone or tablet. while Mobile payment is a service that enables you pay for a product or service using a mobile device. This doesn’t require having a bank account. All you need is a mobile money account.

mPasa from Kenya, owned by Safaricom is the most successful mobile money service in the world but unfortunately it is yet to adopt QR technology for POS payments. On May 2017 Safaricom launched payment proposition called mPesa 1 Tap, which makes use of a Near Field Communication (NFC) enabled card, wristband and a phone sticker just in case your phone does not have NFC.

As pretty as this sounds, I personally think this is not a good move. Safaricom is travelling on a lonely path as most mobile banking companies are taking the road of QR payment system. China boosted the use of QR payment system with platforms like Tencent mobile app WeChat and Alibaba Alipay, and in 2016, India government pushed for an interoperable QR code based payment system, asking major networks to have a common QR code based solution.

In Africa PaywithCapture and MasterPass adopted the technology in 2016, Visa joined the league with the introduction of mVisa. Nigerian, Interswitch introduced Paycode, while Remita introduced its new Remita mobile App. In south Africa, Pick n Pay is currently accepting Bitcoin as a payment option. The Bitcoin payment is made using a QR code.

While the future of mobile payment using QR code in Africa looks bright, Africa’s mobile money service providers should work together to ensure interoperability and standardization in the system. This is needed to encourage user’s acceptance.

It is important that USSD or Quick Codes be incorporated in the QR services so that customers without smartphones or internet are not locked out. This is important because figures from 2015 shows that while only 80% of Africans have mobile phones, only 20% of them had access to internet.

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