QR Code – The catalyst for digital payments?

The volumes and value of mobile money (MoMo) transactions have been phenomenal in the past five years. In fact, it has experienced a boom following the launch of Mobile Money Interoperability. Similarly, virtually every bank gives at least a debit card to its customers. These two developments show that, at the minimum, there should be enough mobile money wallets and bank cards in Ghana to drive digital payments.  But, sadly, the country has been unable to translate this huge gain into actual payment for goods and services using either MoMo or bank cards.

While some believe that it is a cultural thing because of the ‘cash is king’ syndrome, others believe technology-phobia is the main challenge. Many therefore argue that making electronic payment processes simpler and more friendly to use could be a panacea to this challenge; and these and more are the qualities in the QR code payment system.


What is QR Code?

QR code is an abbreviation for Quick Response code. This has been around for a while, but began making inroads from 2011 when two key payment apps – WeChat and Alipay in China – started offering proprietary versions. Outside of China its usage has also seen steady growth, so much so that a number of banks and payments industry players are reviewing their strategies to take full advantage of this payment alternative. It is therefore not surprising that Ghana intends to roll out a universal QR code this year.

The QR code

A QR code is basically a two-dimensional code made up of black and white squares which can be read by smartphone cameras, point of sale (POS) terminals or other devices. And it is not only for payments. In actual fact, the QR code was first invented in 1994 for the automotive industry in Japan and patented by Toyota subsidiary Denso Wave. It has since been used in many contexts – for instance, marketing and information sharing – but is now becoming a popular way for people to make mobile payments, especially in Asia.

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How to pay with a QR code

Using a QR code for payment is very simple as well as inexpensive, and it is these features which underpin the view that it will be a game changer. Unlike Points of Sales (POS) devices, setting up a merchant or shop-owner to use QR codes is not expensive. In fact, a shop can either use a sticker with a QR code or download the merchant app and create a QR code to accept digital payments.

Both smartphone and feature phone (‘yam phone’) users can pay via QR code. All that customers with smartphones are required to do is scan the QR code displayed by the merchant or shop-owner with their phones to pay for their goods. The consumer enters and taps the amount to be paid and ‘bingo!’ – the payment is effected and money immediately credited to the merchant’s account. Customers who do not have smartphones can pay with their feature phones by dialling the merchant code that will be displayed at the merchant’s location.

Paying with a QR code

Using a QR code for payment has started in Ghana as some Fintechs have recently made them available to a few merchants – but these are not interoperable. However, the Ghana Interbank Payment and Settlement Systems (GhIPSS) is seeking to make it universal; such that regardless of the bank or mobile wallet, customers can scan any displayed QR code and payment will be effected instantly.

When the GhIPSS universal QR code goes live, payment can be made from any bank account (through the mobile banking platforms) or from any MoMo wallet. When customers pay from their bank account or MoMo wallet – to either the bank account or MoMo of the merchant – the transaction is seamless and their bank account or MoMo wallet will be debited, while that of the merchant is credited instantly with value. With a simpler payment process, instant movement of funds and being inexpensive to set up, it is anticipated that both the consumer and merchant will find QR codes very useful and convenient.

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Why is it a game changer?

There are several benefits associated with QR codes for payment. The most-cited is simplicity of the payment process. Anybody that has ever used a phone should be able to use a QR code with ease; and after scanning one can see the details of the transaction to be certain they tally – with how much is to be paid and who is being paid – before tapping to pay. This gives customers a lot of confidence knowing that the right transaction has been effected.

Another major benefit is the cost of operating it. Point of Sales (PoSs) tend to be prohibitively expensive for small- and micro-scale enterprises. But the QR code is just right for small area shops. QR codes are inexpensive and the prevalence of smartphones makes them an exciting payment solution – with the potential to create a whole new ecosystem. With good public education, there should be a proliferation of QR codes all over the place once the banks step-up their game to acquire merchants.


Mobile money and issuance of bank cards have been huge successes. The major drawback, however, is that the average Ghanaian still prefers to cash-out or withdraw cash before making payments. However, considering the simplicity that comes with the QR code, it is anticipated that many people will find it more convenient to make digital payments at even the smaller shops than to pay with cash, since the process is simple and payment is instant – while the cost of setting it up is not prohibitive to the shop-owner or merchant. Of course, a well-planned and executed public education exercise will be needed for the anticipated change to occur.

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