SnapScan is a South African app designed to help users buy goods with their mobile phones. Free to download, SnapScan was named App of the Year 2013 at the MTN Business Awards.
“If you look at mobile payments specifically, Africa is actually one of the leaders in this space,” says Kobus Ehlers, co-founder of SnapScan.
How it works
Each SnapScan-connected store has a unique code that is linked to their bank account. When customers want to pay, they can scan the code with their SnapScan smartphone app, which then brings up the store where they are making the purchase.
All you do is you type in the amount and punch in the PIN and press send and it’s gone — it’s all done. You’ve got your secret code (four-digit PIN), so if your phone goes missing for example, you don’t have to worry about people using your phone.
The transaction is complete with SnapScan charging the customer’s debit or credit card for the amount they are paying — similar to a normal card payment.
Using your phone to pay for goods and services is nothing new in Africa, a continent where there are more than 720 million mobile phones. Services such as M-Pesa, the revolutionary Kenyan mobile payment system that allows people to bypass banks and pay bills, withdraw salaries and transfer cash electronically, have transformed the way people and business operate.
Meanwhile, Africa’s smartphone market is expected to double over the following four years — at the moment, South Africa is reportedly the biggest smartphone market in sub-Saharan Africa, with a 19% penetration.
And as smartphones increase, the paying methods are also becoming smarter.
“If you look at mobile payments specifically, Africa is actually one of the leaders in this space,” says Kobus Ehlers, co-founder of the SnapScan app. “SnapScan was developed in South Africa for the African market, so we try to find really local and relevant solutions and I think it’s going to get a massive uptake,” he adds.
“Technology in general is going to get a massive uptake in Africa as we don’t have those legacy systems,” continues Ehlers. “People aren’t used to using credit cards for example, they can skip right ahead and start using cutting-edge payment technology.”
Right now, SnapScan is only available at formal merchants but the hope is that the e-currency could flow from the phones of customers to the accounts of informal merchants too. It can even be used to send remittances.
Ehlers says that the hope of a cashless society is possible for Africa.
“Quite a large portion of people have access to a smartphone and by leveraging that technology we can provide payments that were previously impossible,” he says. “That really is an empowering thing for most people in Africa who haven’t got access to formal infrastructure to provide those services.”
John Campbell heads up the Beyond Payments division of Standard Bank, which partners with innovators such as SnapScan to create banking solutions. He says that lack of traditional infrastructure often leads to creative solutions.
“In other territories where that infrastructure was not available, that infrastructure has been leapfrogged by the use of mobile,” explains Campbell. “M-Pesa in Kenya is a good example of that, where money goes straight to your mobile — your mobile number almost becomes your account number, that’s effectively what happens.”
“It’s way better as opposed to using your credit card or cash,” he says, adding that he was surprised to find out that SnapScan was a tech company that started in South Africa.