We sat down with VISA’s General Manager for Southern Africa Mr. Jabu Basopo. We had an interesting conversation that touched on a variety of issues including improving the security of payments, implementation of QR codes in African markets and the lessons that VISA is learning from African payments which one can argue are beginning to leapfrog Western societies due to the focus on mobile technologies.
Techzim (Tz): I’m sure you’re aware that here in Zimbabwe we’ve had two failed attempts to launch QR payments, once by Ecobank and once by EcoCash. I want to understand what you think would be necessary to actually launch QR and get traction?
Jabu Basopo (JB): In the case of Ecobank and the launch of their QR solution, they were launching the Masterpass (a Mastercard solution), so it’s very important that we differentiate the two.
I think what happened when QR codes came into play is that someone came up with this technology and everybody in the industry was excited by QR and deployed solutions that were far from ideal. From a VISA perspective, this is where we can play a role in improving this technology because we can take these technologies and make sure we develop the right technology that talks to everybody – i.e that is interoperable.
When you started to see QR codes popping up in the market they were not talking to each other. They were very silo-focused which is a challenge in payments. Payments must have certain standards and interoperability is always key.
When you look at QR codes, scalability is very important. If you’re going to have only 10 people using QR it won’t translate into a common payment.
At VISA these are the things we are thinking about, with a particular focus on how to go to market and ensuring that consumers understand.
We are actually working with banks to make a form of payment that covers all the bases – be it QR, contactless right down to USSD and this payment form will be interoperable. If Techzim comes in and says we want to process payments it will simply be a matter of plugging into the API and you can process.
Tz: Interesting. From Visa’s perspective do you think QR payments in Africa will be rolled out successfully in the short term or it’s more of a medium to long-term technology
JB: I think if you look at African markets we tend to complain and say “we have x and y services from the west which are just brought to us”. Mobile is OUR product. It’s a product we pioneered for Africa but we just need to do it right.
In fact, the developed countries are now looking at us and saying ” These guys initiated a mobile product”, but they are now perfecting it better than us.
QR is a product made for African markets and solves a lot of problems and I have no doubts that it is an immediate need. It just needs to be implemented in the right way.
Tz: Visa is constantly working on new technologies and I’m excited to know which new products you’re working – specifically for the African market
JB: I would like to discuss this one under the umbrella of “digital” because this is where we are seeing everyone going including Zim.
We are seeing huge growth in eCommerce transactions coming predominantly from mobile. The consumer is clearly sending a message that this is the form of payment that I want to use. So now our role is to make sure that all payments conform to mobile devices. Regardless of someone having a feature phone or a smartphone – it has to work.
Deploying mobile technologies such as USSD, contactless and dealing with challenges to do with fraud and security in eCommerce is the major focus right now.
In terms of fraud and security in the eCommerce space, consumers are worried and fearful. And in looking at how to deal with these fears, we came up with Tokenization.
We are tokenizing transactions which ensures that when I transact I’m only exposing my card details to that specific transaction. What happens is as I transact a token is generated in the background and that’s what is sent. If someone steals that they are exposed to just that single transaction. You’re not exposing your whole credentials. This is a great technology especially for the growth of eCommerce.
Tz: The security aspect is incredibly important in Zim as well and when you spoke of Tokenization I got extremely excited because there’ve been too many fraud incidents involving the digital payments. Can our local banks partner with Visa and use this technology to protect Zimbabweans?
JB: We have these services available to our clients, and the banks here are our clients already so they can use this technology. It’s a matter of making their environment ready and making some changes in order to make their environment compatible with the technology.
Tz: When some people look at Visa & Mastercard trying to solve payment related problems in Africa there’s a perception that you guys will struggle to make products for the African market because people believe you’re a western company. My question would then be is this true and what have you learned from Africa (which is in some aspects ahead of developed markets)?
JB: I think what needs to be understood is the fact that Visa and Mastercard might appear “Western” and yes our head offices are there but this is the reason why when we expand into markets we have local people running these organizations. I’m from here (Jabu is Zimbabwean), I know this market and that’s how we look at it. Ultimately there’s no difference and we approach it from the perspective of simply taking a global company and operate it locally and leverage on our brand, and the scale we have when it comes to systems, technologies, and expertise. That’s the big advantage when we localize.
I think the most important thing for us is really understanding the products that we’re launching and whether or not they match what is required by the consumers. Even if you look at the way MNOs have been implementing their technologies there are too many closed loops and questions around how that can be opened up.
The unfortunate thing when it comes to perception is that people only look at domestic payments. I’ll give an example of this country. The challenges we have here are now seeing us survive on tourism. Zimbabwe was 4th in terms of tourists received in Africa last year. The people coming in here need to make payments and the local solutions aren’t great at that. That’s where we add value.
In our trends we see travel becoming the norm and if the people coming from outside Zimbabwe can access payment systems easily the numbers will increase which can only be a good thing.
We need to think global and act locally…
Tz: What has been the biggest challenge thus far in terms of making payments as seamless as possible
It’s interoperability. Basically. I say this because you have all these different payment forms which don’t talk to each other. I go into a certain shop I have to use one method of payment. I go into another one and its a different form of payment etc.
Interoperability is key to all this communication and once you nail that you can begin to start addressing other things such as speed and security. A good example is 3 weeks ago we implemented Tap to pay with Gautrain in South Africa. So now if you jump off a flight at OR Tambo and you’re catching a train, the same Visa card you use in other countries can now pay for your train ride. You just tap and go instead of having to queue for tickets.
Tz: One of the biggest challenges in Africa is banks and merchants having the capital to roll out infrastructure for new payment technologies and products. You were talking about contactless and the Gautrain. How does the technology become low-cost to the point where the incentive to scale it is higher for banks and merchants?
JB: We do understand that different countries experience different challenges. But at the end of the day if we continue to focus on costs then we’re not going to do anything.
At some point, a certain level of investment is required and you’ll have to make that decision regardless of the prevailing conditions in the market.
Another way of looking at investment is simple: sometimes the things that we do today might not benefit us today but they create the foundation which will benefit us in 5-10 years. In markets like this its always good to think long term than to think short term.
You might not do everything at once but is it in your plan to begin with? If you’re always in the “cost-mode” it’s going to limit your expansion
Tz: Finally, what do payments look like to you in 5-10 years?
I think this what I spoke about earlier. From the Zimbabwe context its a payment space where I should be able to walk in any shop and be able to pay with any form of payment I have.
In 5-10 years we want to see Visa credentials – be it plastic, the phone, wearables- being the best way to pay everywhere and for everyone. That’s where we see the country going.