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Cracking the QR code – working with Mastercard to benefit retailers and shoppers

December 13, 2019

Tim Whelan

New technologies offer more convenient, safer ways of making payment. Technical Lead Tim Whelan explains why Electrum worked with Mastercard to develop QR code payment capabilities for merchants.

We’re living through a time of fast-changing innovations in the field of payments. Retailers understand that, to remain competitive, they need to offer their customers easier ways of transacting. New methods of paying – like QR codes – give shoppers the convenience and safety of a cashless transaction.

QR codes have become a key part of the payments landscape…

By one estimate, 86% of China’s population will make use of mobile payments in 2019, mainly using QR codes via the immensely popular AliPay and WeChat platforms. While QR codes have become a key part of the payments landscape in China, Thailand and India, in South Africa they represent a much smaller proportion of retail transactions.

Nevertheless, local retailers and banks would be wise to prepare for the potential growth of this payment method. Not all South Africans own smartphones, which are necessary for QR code payments, but an ICASA report says smartphone penetration doubled in the two years since 2016 to 81%. Even taking into account individual ownership of multiple smartphones, it’s an indication of the proliferation of newer, QR-ready devices.

...Electrum’s worked closely with Mastercard to optimise our solution…

The rise of payment platforms like SnapScan, Zapper and a handful of QR-enabled banking apps are responsible for the mushrooming of QR codes in South Africa in recent years (even Cape Town’s parking marshals display codes for scanning to collect payment). But until recently, there’s been little standardisation among these platforms. For this reason, EMVCo was established by major players in the payments sector, addressing worldwide interoperability and facilitating the acceptance of secure payments.

Two years ago, we began working on QR payment solutions. Since then, Electrum’s worked closely with Mastercard to optimise our solution and bring it in line with EMVCo principles. Currently, Electrum is the only Digital Payments Platform in South Africa that’s able to offer merchants the ability to generate QR codes of their own that follow the EMVCo guidelines for interoperability.

… seamlessly aggregate all payment types with one QR code

Our integrated QR acceptance solutions seamlessly aggregate all payment types with one QR code. Credit card payments via Masterpass can sit alongside closed-loop payment options, like vouchers, virtual gift cards and mobile wallets. Through a single app, a customer can choose how to pay, offering a much more convenient shopping experience and improving customer loyalty. (It’s worth mentioning that retailers can benefit significantly from QR code-based closed-loop payment offerings, which remain largely untapped – read about them here.)

As opposed to static QR codes – the type often seen at restaurant countertop stands, on printed stickers and the like – our merchant-generated codes can be dynamic. The QR code can be displayed digitally on a screen at a pay point and is unique to the transaction. It creates a more frictionless experience, since the exact amount can be displayed on the customer’s payment app, without the customer having to type it in.

…no need to train tellers on multiple payment types…

Since the QR code tells the system what type of transaction the customer is engaged in there’s no need to train tellers on multiple payment types and redemption methods. Each QR code contains 7,000 unique characters, so other useful information can be recorded, like where the transaction is taking place. A merchant could even send communication with live information to the customer, like how much they saved on their current shop.

By using a digital payment service like Masterpass, retailers are able to reduce their cost per transaction. What’s more, they don’t have to deal with the onerous compliance requirements that come with storing cardholder data. These benefits combine with QR’s convenience to make it a payment offering that both our retail clients and their customers appreciate.

If you’d like to talk about what Electrum’s QR code payments solutions could do for your business, we’d be happy to chat.

Tim Whelan

Tim is a developer at Electrum. He enjoys short walks to the coffee machine and unit tests which pass.

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