The COVID-19 pandemic has highlighted the need and importance for zero-contact payment methods such as contactless and cardless alternative payments (mobile payments) as a way to limit exposure to the Coronavirus.
According to a recent polling by Mastercard, 75% of South African consumers are now using contactless payment methods citing safety and convenience as the key drivers.
Payment with mobile applications is gaining great momentum, both from a merchant acceptance and customer adoption perspective (over 175 000 merchant stores in South Africa are already able to accept QR payments, with PNP and Shoprite Checkers being the most recent). While this has been applied to traditional association branded products (Visa, Mastercard, Diners etc.), it is often the preferred go-to-market strategy applied by new payment providers entering the market, such as Mobicred etc.
A range of new alternative payment providers are now available to customers, driving merchants to implement support for these payment providers, which is often accomplished via mobile QR payment from a digital wallet. New alternative payment providers include various credit providers, which will be in high demand with businesses coming out of lockdown.
The primary technology being used to enable new payment providers is that of QR codes. A QR code, or quick response code, is a 2-dimensional bar code system that is capable of containing information and can be scanned using the camera on a mobile device.
The Innervation mobile payment solution enables merchants to securely accept multiple mobile QR payments, be they Masterpass enabled (association branded cards), Innervation store of value (Gift Card, Loyalty etc.), Innervation Rewards, and other Private Label tenders (e.g. Mobicred etc.) through a single integration. These payment options are typically accessed by the account holder using a mobile application such as FlickPay, with other apps (bank apps, Zapper and SnapScan supporting association branded accounts) also supported. These apps are used to scan the QR code presented (typically on the PED) by the merchant.
While the mobile payment solution already supports mPesa in Kenya, additional standards such as mVisa. MPQR and China Union Pay will be supported as and when the market requires it.
Innervation has pro-actively been engaging POS providers in an effort to ensure the service is integrated, should merchants want to proceed with urgency.
At its core, the intent with mobile payment is to affect the transaction as a push payment, which will in future see the merchant being settled in near real-time, remove the chargeback risk and ultimately reduce the acquiring fees applicable. This often requires regulatory changes and will therefore take some time to realise.