While many mobile wallet companies look to complement credit and debit card acceptance, South Africa's SnapScan is focused on merchants who accept only cash.
SnapScan is designed to accommodate cash-only merchants whose customers increasingly want another way to pay, said Vuyo Mpako, head of innovation and channel design for Standard Bank. Based in Johannesburg, the bank is a partner of SnapScan's developer, technology firm FireID.
"You have a lot of people who walk into neighborhood markets with only their cards, not cash. You would turn those people away," Mpako said.
To date, SnapScan is being used by about 14,000 retailers and more than 100,000 consumers across South Africa. It is expected to be available in 2015 in other African countries, including Mozambique, Zambia and Zimbabwe, Mpako said.
The bank hopes SnapScan, launched in May, becomes the dominant payment platform for transactions typically settled with cash.
"That's our sweet spot," Mpako said. "We're obviously not turning a blind eye to retailers who have card-acceptance machines. But our sweet spot is where you would pull out cash."
Customers in South Africa include coffee shops, neighborhood markets and street vendors selling magazines, Mpako said. In the central business district of Cape Town, SnapScan is used by car marshals, which are people who watch over parked cars in return for tips.
"A lot of those tips are paid in cash," said Mpako, noting that drivers often end up fishing for whatever loose change is in their ashtrays. With SnapScan, drivers just need their phones.
Another potential use for SnapScan is churches, Mpako said, where tithes are often paid in cash.
To pay with the app, customers scan a QR code displayed by the retailer and choose the amount to be paid. Users can enter details for up to three credit or debit cards. Once payment is made, the retailer receives a text message or is notified through its point-of-sale system.
Businesses that are Standard Bank customers can have payments automatically deposited in their accounts. Non-customers can cash out via a money transfer at any Standard Bank ATM.
There is no fee for the withdrawal, Mpako said, and retailers pay a per-transaction fee of 3 percent in order to accept payment. He described the cost as competitive with the cost of accepting credit cards, which includes purchasing equipment and establishing a remote connection.
And Standard Bank is eyeing the potential for new business from merchants who use the SnapScan app but are not bank customers. They may open accounts at Standard and be able to borrow money based on the bank's insight into their cash flows. "The opportunities are obviously there," Mpako said.