QR code innovation is enabling low-cost digital acceptance in Pakistan | Mastercard New Payment Platforms

Quick Response (QR) codes are emerging as a popular payment acceptance alternative to point of sale (POS) terminals in Pakistan. These little- to no-cost acceptance solutions not only support digital financial inclusion among micro-merchants, but can also support governments’, central banks’ and regulators’ strategies to drive a more digital economy by removing cash from the banking and payments ecosystem.

Mastercard QR is a payment solution that can be embedded into a digital wallet or banking app. It securely links to person’s card, digital wallet or bank account to provide a fast, convenient and safe way to pay merchants.

To accept payments, the merchant simply registers a unique QR code as a proxy for their bank account details. They display this code as a tent-card or sticker at their store counter, or digitally within their merchant app. When a person pays in-store (or online), they simply scan the QR code, which prepares a fund transfer to the merchant’s account. They enter the amount to pay and authorise the payment. Micro-merchants benefit from reduced cost and time needed for cash management and reduced risk from carrying cash.

Mastercard QR became Pakistan’s first interoperable mobile payment solutions when it launched in 2016. From initial objective to displace cash, Mastercard and its partners have since grown its user base and acceptance by supporting new use cases and driving sustainability and adoption through education and awareness.

Low-cost acceptance solutions fuelling micro-merchant growth

The majority of a micro-merchant’s business activity involves small, low-value transactions — it’s not always necessary for them to invest in a contactless or Chip & PIN terminal, and given that micro-merchants often operate in non-traditional venues, stationary POS equipment can be impractical. QR is a powerful yet cost-effective tool for micro-merchants and small businesses to quickly enable digital acceptance and enter into the formal economy.

Sham Sundar is the owner of Adarsh Spare Parts Shop — a tiny store front selling electrical goods and accessories in western Hyderabad, Pakistan. Until recently, his small store had no means of accepting digital payments, which meant all his custom was in cash.

“We used to face a lot of trouble managing cash, for which we had to often go to the bank.” But having to accept cash is not just a hassle, it’s a detriment to Adarsh Spare Parts Shop’s overall sustainability. “Because of COVID-19, the trouble escalated: customers weren’t comfortable with exchanging paper currency.” Sham’s business took a downturn as a result.

It was a customer that told Sham about the QR-based acceptance solution from Mastercard. Intrigued, he sought more information about it. “Today, we receive payments from customers using QR code, and we don’t face issues anymore,” he says. “In fact, it has helped to improve our sales…. [it’s] amazing.”