The Snapscan effect: how mobile payments made QR codes relevant in South Africa

Flash back a few years and things weren’t looking great for QR codes. The Matrix barcode, first designed for the automotive industry in Japan, had its supporters to be sure, but the idea that they were largely a total crock seemed to increasingly be the consensus.

Over the last year however, that’s changed in South Africa, largely thanks to mobile payment apps like SnapScan.

According to new research from technology research company World Wide Worx, the format first took off in the country thanks to BlackBerry Messenger, where it became the quickest way to add a friend. In the past year however gained new life as mobile apps like SnapScan roped it in for payments at small merchants, flea markets and the like.

By the end of 2014, the research says, more than 2.1-million South Africans were using QR Codes. Of those 1.1-million were male, with female users only marginally behind, at 1.04-million.

“Mobile payment systems are quickly becoming mainstream, and it will be fascinating to see how the more mechanical systems like QR Codes compete,” says World Wide Worx managing director Arthur Goldstuck. “Ideally, there should be room for any system, with each one finding its ideal niche. But there are no certainties in a sector that is moving so fast.”

Read more: From stores to the streets: SnapScan’s road to a cashless society

According to the research, QR Code usage is strongly age-related, with 673 000 users in the peak age group of 25-34. In contrast, the 15-24 segment amounts to only 471 000, while 494 000 are aged from 35 to 44. A similar number (425 000) makes up the 45-65 age group. Usage drops significantly with retirement age: the 65+ age group comprises 88 000 users.

One possible reason for QR code mobile payment solutions such as Snapscan, Zappa, and FlickPay being so popular in South Africa is their ability to provide speedy payments without the need for the large-scale tech investments required by the payment technologies emerging in more developed areas of the world. This is especially the case with Snapscan, which supplies its merchants with a point of sale QR code and a basic mobile phone to track payments. This has allowed it, for instance, to be rolled out as parking payment method in Cape Town’s congested CBD.

The report is based on primary research by technology market research leaders World Wide Worx, as well as collaboration with market research organisation Ask Afrika. Data from Ask Afrika’s Target Group Index (TGI), a research project with a sample of more than 15 000 respondents annually, will provide demographic and behavioural components of the report.