No cash needed using South Africa’s SnapScan
SnapScan, a digital mobile payments system co-founded by entrepreneur Kobus Ehlers and developed under the FireID group (a technology incubator), has been in the market only since May 2014, and has already amassed a client base of around 18,000 merchants throughout South Africa.
Why is this app so popular, and what does it do? In short it aims to replace the use of cash for both customer and merchant. What makes this unique for the merchant, is that they don’t need a bank account or a card machine to receive payments.
In an interview with How we made it in Africa, Ehlers explained: “A sizable part of why we built the product the way we did really relates to how the economy of South Africa functions. So to give one example, we built SnapScan so the merchant selling the products doesn’t need any special hardware at all. No point of sales system is required.”
Merchants who don’t have bank accounts can redeem payments at any Standard Bank ATM or selected supermarkets.
Customers, when purchasing, simply need to scan a QR (quick response) code in store using their phones. And the customer can use any MasterCard or Visa card to sign up.
Ehlers added: “We tried to design a product which allowed absolutely everybody to be part of the formal side of the economy.”
SnapScan’s partnership with Standard Bank has allowed the company to grow faster. But Ehlers and his team are still required to adapt to the differences between the corporate and start-up worlds.
He explained: “A start-up can quickly make a decision and then two hours later start implementing, whereas in a large corporation there is a process, things move a lot slower. Politics are involved and different people – and that’s not necessarily a bad thing, just the reality.”
Success in Africa and the continent’s promise
During the interview, Ehlers provided some personal insights regarding difficulties facing today’s entrepreneurs. “For me the hardest part was realising a company has been built that a lot of people work for and depend on, and if serious mistakes are made, you and your whole team could be without any kind of job security, without any kind of safety net – and the whole show just ends tomorrow.”
Even in light of SnapScan’s success, Ehlers still warns of the idolisation of ideas. “What comes to mind first is to really not over-value your idea. Ideas are important, absolutely, they inspire us, they drive us to experience something. But ideas aren’t always special, you have a lot of them every day.
“The really hard part is turning that idea into a reality. Ideas aren’t absolute, they require analysis and change to eventually find something that really works.”
Ehlers concluded with some words for other budding entrepreneurs.
“Something I have been thinking about for the past year or so is to really not under-estimate how much of an advantage it is coming from Africa.
“Sure there are many disadvantages: it is harder to get something, you don’t always have the access to networks and infrastructure. So a lot of things are against us. But at the same time we learnt to somehow make it work in that context. We have a unique way of looking at problem-solving and surviving – and really getting something out there.”
Silicon Valley not an example
“And I think that’s a really significant strength that we have. If you grow up not having access to the first world infrastructure, then that’s something you should play to.
“I think the saddest thing I see is when the people from Africa essentially just try to emulate the same model you get in Silicon Valley – and then most of the time it is quite a big failure.
“I think you have to realise where you are and what your strengths are, and really just play to that. There are absolutely fantastic things we see coming from the continent every day.”