If you use payment apps, make sure your phone password is safe. Picture: Alaister Russell/The Sunday Times
If you use payment apps, make sure your phone password is safe. Picture: Alaister Russell/The Sunday Times

Your banking app is fast becoming your wallet, making it more convenient to pay without cash, which is costly and can be unsafe, or bank cards, which are at risk of being skimmed and cloned.

Scan-and-pay functionality has been a feature of Nedbank's Money app since July last year, and First National Bank recently introduced it.

The functionality enables you, as a user of these banks' apps, to pay any merchant or service provider that displays a Masterpass, Pay@, SnapScan or Zapper QR code.

So instead of having to download a multitude of payment apps that enable you to scan and pay, the functionality is built into the FNB and Nedbank banking apps.

Only download payment apps from a trusted source, such as Google Play or the App Store on Apple, and keep your phone password protected, so that if it gets stolen, it can't be used as a payment tool.

The use of payment apps linked to QR codes has become common across SA, according to Capitec.

Mastering the payment pass

The bank carried out a Twitter poll recently and found that the most popular of these apps is Masterpass (which is used by 65% of those who use payment apps), followed by SnapScan (19%) and Zapper (16%).

Payment apps are generally free to download. Once you've downloaded the app, sign up and add your card details - the card from which you want to make payment - and within minutes you can use the app to pay at any merchant or service provider that accepts payment in this way. Such apps can be used to buy goods at a market or online, or to pay a utility, service provider or restaurant bill.

The benefits of scan-and-pay technology are the speed at which you can pay, safety and convenience. You don't have to create a beneficiary, whereby there's a high risk of you getting the account number, branch code or reference wrong, every time you want to pay a merchant or service provider.

You merely use your phone to scan the QR code, type in the amount payable, if required, and hit "pay". The merchant or service provider receives instant notice of your payment and your payment is recorded on your bank statement.

Jason Viljoen, the head of digital payments at FNB, says FNB's banking app is a "multi-utility app" addressing the "app fatigue" suffered by customers who don't know which apps to download and which ones to discard.

Everyone's on the same page

Back in the early days of credit cards, certain cards worked on certain devices only, before Visa and MasterCard ironed out these issues, Viljoen says.

"Likewise, now all players are trying to organise the market to make it easier for users to scan and pay, regardless of the payment QR code presented or the app in use. That's the friction we want to do away with."

Charl Smedley, the head of payments at Absa, says the South African QR code payment landscape is seeing steady growth, with 150,000 merchants now able to accept this form of payment. "The merchant QR acceptance growth is driving consumer QR mobile payment demand across the payments market," he says.


15,000

Payments made a day by FNB customers tapping a smart device or using a QR code 


Absa customers have to download the Absa Masterpass app, which allows them to pay at any Snapscan, Zapper, Masterpass and Pay@ QR payment acceptance point, Smedley says.

The same applies to Standard Bank and Capitec.

Antoinette Hoffman, the head of digital payment wallets at Standard Bank, says the bank's banking app does not currently enable a client to scan a QR code and make a payment.

"SnapScan, as a Standard Bank product, as well as the Standard Bank Masterpass app, offer a scan-to-pay capability. SnapScan enables you to scan a SnapScan and Pay@ QR code and make a payment. The Standard Bank Masterpass app is able to scan a SnapScan, Masterpass, Zapper and Pay@ QR code," she says.

After you've downloaded the Masterpass app on your phone, scan the QR code and enter the amount you want to pay the merchant. Lastly, enter your bank PIN and payment is made.

According to Capitec, there are no fees or charges when paying with Capitec Masterpass.

Paying with a tap

Absa, FNB, Nedbank and Standard Bank all offer contactless cards, which enable you to pay by tap and go. And some banks now also allow you to use an Android phone to tap and pay at merchants with enabled card machines.

FNB customers can enable contactless payments from their phone through their bank app. Standard Bank customers who have compatible Samsung devices can use Samsung Pay to make secure contactless payments, and as of last month, so can FNB and RMB Private Bank customers.

The benefits are the speed at which you can pay, safety and convenience

To make a payment, you simply unlock your smartphone and tap it (instead of your card) on the card machine. For payments over a certain amount you will need to enter your PIN on the card machine.

The card machine will indicate successful payment, as it does with a card, and you will receive a push notification on your phone.

Since last year FNB customers who exercise without their phones but may want to buy refreshments have been able pay by tapping their Garmin and Fitbit devices on any contactless enabled point-of-sale device.

Old habits die hard

Viljoen says the bank recognises that customers want the freedom to choose and switch between various payment options that complement their lifestyles.

FNB clients carry out about 15,000 payment transactions a day tapping a smart device or using a QR code, Viljoen says.

"Adoption has been slower from a merchant perspective, but we see a lot of uptake from our tech-savvy app customers."

Consumers are often reluctant to change habits such as traditional card payment, he says. Changing existing payment behaviour will take time, but various initiatives, such as the roll-out of contactless ATMs, will help drive this, he says.


Capitec wins the 'happy customer' war

Capitec is the leader in "perceived value", according to a recent survey of customers of SA's big six retail banks.

According to the latest South African customer satisfaction index (SA-csi) for banking (2018) by Consulta, Capitec leads by almost 11 index points over the bank that scored the lowest in this category, which is Absa.

The survey found that one in four customers was identified as ready to defect to another bank - with digital disruptor banks Discovery Bank, Bank Zero and TymeBank ready to embrace them.

The SA-csi for banks is the largest of its kind, surveying 15,542 consumers from lower, middle and upper retail banking segments. It is a causal model that links customer expectations and perceived quality and value to customer satisfaction, which in turn is linked to customer complaints (and recovery), and loyalty intentions.

This year will be a watershed year for the banking sector as traditional banks face intense competition from new entrants, the survey says. "In such an environment, customer satisfaction is a deal breaker when it comes to how much market share is lost to new entrants."

Perceived value is the most contested area in banking - it's not only about affordable fees, the survey says. "The battlefront of perceived value will become very intensive as other banks are increasing their perceived value to customers."

Objectively, this does not mean Capitec has the lowest bank fees because other banks have reacted with comparable fee and costing propositions, the survey says. "But what Capitec does well is reduce total customer costs in terms of reduced red tape, less documentation, and more speed and convenience, which translates into perceived value. These 'simplicity factors' also contribute towards African Bank being perceived as great value for money."

The best improvement in perceived value compared with previous scores is Nedbank, with a three-point improvement since 2017. Nedbank has shown consistent, year-on-year improvement in perceived value for the past three years.

The bank recently scrapped the R5.50 monthly fee on its Pay As You Use account, which is aimed at the emerging middle class.