The South African Reserve Bank is about to start a pilot of QR+, a single payment code that could help it see how informal businesses operate.
Reserve Bank Governor Lesetja Kganyago set out the plan on Tuesday, 20 October. He said QR+ is meant to work as one digital ID for payments.
“It is meant to be simple and cheap. Encouragingly, we have a pilot that is about to begin, and we look forward to learning from it,” Kganyago said.
According to Daily Investor, the bank wants QR+ to be one code that a trader can display. Customers would then pay with the payment service they prefer.
Kganyago said making digital payments simple and affordable is one way to bring more people into the financial system. He said this is one of the central bank’s main goals.
He said a street vendor may have a bank account but will not take card payments if that needs costly equipment. A point-of-sale device is one example.
“Many informal businesses lack conventional collateral, audited statements or formal credit records,” he said. “Yet their payment flows may show regular sales, recurring customers, turnover patterns and the ability to manage cash flow.”
Kganyago said people and businesses could use their payment history as proof of their economic activity. This could help small traders build a digital record and get credit more easily.
He said QR+ would allow digital credentials that can be checked and used again across the payment system. These would be kept in a wallet that the person controls.
“We want people and businesses to be able to establish their identity without repeated friction,” Kganyago said.
The governor said this does not mean every payment will automatically turn into a credit score.
“Customers must retain meaningful control over how their information is used. Data must be accurate, relevant and open to correction,” he said. “This is not about erasing privacy.”
Most informal trade in South Africa is done in cash. Daily Investor reported that this makes it hard for the Reserve Bank and Statistics South Africa to track it.
As a result, nobody knows how many informal businesses exist, how big they are or what they need.
Informal economy expert GG Alcock, who wrote the book Kasinomics, has estimated that the sector turns over between R1 trillion and R1.13 trillion a year.
Alcock said the spaza shop sector alone is worth between R190 billion and R200 billion. The informal economy also includes backroom rentals and roadside sellers.
The informal economy is estimated to be growing faster than the formal economy, according to the report. Large companies such as Capitec, Shoprite and Tiger Brands have moved to expand into the sector.
Source: this article is based on reporting by Daily Investor. Image: Daily Investor. Written with the help of AI and published by the Tzaneen Voice Business desk. See our Editorial Standards.
Anelisa Nkuna covers business and money news for Tzaneen Voice. Anelisa reports on the rand, fuel prices, interest rates, jobs, Eskom, Transnet, farming and company results. The aim is simple: explain what the numbers mean for household budgets, small businesses and workers in South Africa.