The fast-growing mobile payments sector is a veritable hotbed of innovation – both locally and abroad. As consumers become increasingly dependent on their smartphones, and demanding of quick and seamless services, mobile payment solutions are beginning to play an important role in facilitating commerce (both online and offline).
In South Africa, SnapScan has been one of the clear frontrunners, with its user-friendly payment product for merchants. Although it initially started life as a simple online checkout product, SnapScan is now used for bill payments, e-commerce transactions, paying parking attendants and even collections for various donation initiatives – in addition to the standard merchant offering. Perhaps unsurprisingly, innovation is not a tick-box affair for the company, but rather, is firmly embedded into its daily operations and business processes.
“It’s a very hard balance, to continue innovating (while growing),” admits SnapScan co-founder and CEO Kobus Ehlers. “Initially, it comes very easily. Experimenting with a new product and iterating is far more manageable when those consumer behaviour patterns have not yet been established…but as you get larger, innovation becomes a much more considered process.”
And considered it certainly is. Ehlers says that he actively allocates time and resources to trying out new things, and internally, these are run as full stack projects. Some of these projects result in new offerings, which are then released to a small number of users and tested extensively.
“You have to strategically allocate resources to keep up, and ideally, to keep ahead,” adds Ehlers.
In an ecosystem characterised by constant change - and an industry obsessed with disruption - keeping ahead is no small task. So in addition to establishing a strong culture of innovation and idea generation, SnapScan’s fundamental approach is an ‘iterative’ one, notes Ehlers – and the company is always testing, measuring, gathering feedback and insights from the marketplace, and then incorporating the findings.
“We certainly didn’t get it right the first time, and there has been plenty of learning over the past few years,” he adds.
It’s a Design Problem…
Ehlers, a Capetonian who studied Philosophy and explored Decision Making and Systems Theory at Stellenbosch University, says that changing consumer behaviour is ‘fundamentally, a design problem’. After completing his Masters degree, Ehlers spent seven years researching and lecturing to undergraduate and postgraduate students in the same fields, while also consulting to companies around business intelligence and decision making tools. Gradually, his consulting work took over – and he moved away from academia.
“The agile development that took place in large companies needed to move quite fast, and it was far removed from the academic tempo,” he explains. “In academia, you wait three years to get published, but the world is changing much faster today – so the process becomes quite disjointed.”
Having always run side businesses, Ehlers says that eventually the consulting work had to be put aside in order to focus on his own brainchild: SnapScan.
“It was an easy transition to make,” he says. “I was fortunate to have gotten to know a lot of the right people over the years. And as a researcher, I was always working with Systems Theory (the interaction point between human beings and systems) which is not that far removed from what we’re doing now…”
Indeed, by blending the fields of Philosophy, Design and Information Technology, Ehlers appears to be achieving his mission of easing consumer pain points.
Creating New Payment Opportunities
Looking ahead, Ehlers says the company has three key focus areas. He wants to enable a ‘whole new segment’ of merchants (of all sizes) that don’t currently leverage mobile payments or have the capacity to offer the solution. There will also be a continued focus on creating a ‘safe, convenient and fast’ experience for the end user. Finally, and arguably the most exciting mission, is to create new payment opportunities or payment channels where previously any type of mobile transaction simply wasn’t possible. This could include anything from informal markets and vendors to large and established retailers.
Ehlers cites the example of SnapScan being used in churches to collect donations. Instead of having to manually collect individual donations from a large congregation, Ehlers says using SnapScan, they can process a ‘few million rand’ for a church in one sitting.
In his view, the local market is reaching a critical tipping point when it comes to the wider adoption of mobile payment solutions, although he adds that it’s still ‘early in the journey’.
“In this market, our biggest challenge by far is to change consumer patterns and drive adoption,” says Ehlers. “Our biggest competitor right now is cash. We are not really selling a product, but rather a way of changing consumer behaviour for the better…it’s a hard value proposition.”