Mastercard QR Bot Helping Small Businesses in Africa

At the Mobile World Congress, Mastercard recently announced that it was teaming up with Facebook to provide small businesses in Africa and Asia with an affordable and simple on-ramp for accepting mobile payments.

The partnership will help unbanked retailers and merchants in the regions open bank accounts through Facebook Messenger. At the launch, Kahina Van Dyke, director of Payments and Financial Services Partnerships at Facebook, said, “Brands and developers around the world are turning to messaging to connect with the 1.3 billion people who use Messenger each month. We are pleased that Mastercard is developing a service on the Messenger platform to help small merchants use messaging to manage their business and connect with their customers.”

Ecobank and Zenith Bank are Mastercard’s official financial services partners in this launch. The test market for Mastercard’s first launch is Nigeria, with plans to expand elsewhere in Africa. Over the past few years, Africa has gained momentum with its fast-growing phone penetration, but most of the continent’s population still relies on inefficient traditional payment infrastructure.

By using the Masterpass QR bot, small businesses in Africa can tap into new markets and help digitize the nation at a faster pace. The power of the QR bot will allow consumers to pay for goods and services through their mobile phones at merchant outlets. The cost-effective mobile technology was initially launched in 2016 and is a secure, smart and easy alternative to cash payments.

According to research conducted by The Fletcher School and Mastercard Center for Inclusive Growth, 98 percent of the $301 billion flowing from consumers to businesses in Nigeria is cash-based. The bot will use customers’ mobile banking applications to make payments from their bank accounts. The payment system will provide merchants of all sizes across the region, from international chains to individual shop owners and street vendors, with fast, secure and inexpensive payment technology.

According to Jorn Lambert, executive vice president, Digital Channels and Regions, Mastercard, “Every business owner is looking for ways to increase sales and draw new customers into their stores. By offering QR-based digital payments, smaller retailers can achieve these goals and create greater customer stickiness with little to no investment beyond the phone they already have. Masterpass QR opens up new commerce channels for these merchants and enables them to create auditable transaction records. These advances open doors to other financial tools and products such as loans to drive added business growth.”

The bot aims to allow people to safely accept and make-in person purchases through with any type of mobile phone and without cash or a plastic card. Small businesses in Africa and the region’s consumers will have greater choice in making payments using the bot.

Once the businesses send their request to the bot, the QR code can be enabled. The bot will receive approval from the bank and set up the account. Once the process is approved and completed, the QR code can be printed and displayed by business owners in their stores. In addition, customers can save the code on their phones and make payments by scanning the code with a smartphone or by simply entering the merchant ID associated with the QR code.

The payment solution also supplements Mastercard’s investment in creating contactless payments. Recently, Mastercard acquired South Africa-based payments technology startup, Oltio Card International, from Standard Bank Group. The aim is to create a new mobile payments technology platform that will help Mastercard run its operations on Oltio’s platform for the provision to member banks of person-to-person payments, bill payments, airtime top-ups and other utility payments which can be integrated into already existing banking applications.

Oltio Card International has pioneered several mobile payment solutions, including authentication technology. Such acquisitions will enhance its payments solutions and enable small businesses in Africa to deploy payment technology across the continent, making them more accessible to their customers and helping their businesses grow.

Originally Published on Borgen Magazine by Deena Zaidi