By Tim Moran
Notably, there is growing support for QR codes from payment services providers and technology firms worldwide because they offer advantages over established payment methods, including ease of use and security.1
Thus far, it appears China is leading the QR parade. As of 2017, Chinese payment processors registered about $15.4 trillion in mobile payments, predominantly through QR codes.2 They have been widely adopted in China and a few other countries as an easy way to make and receive mobile payments without resorting to specialized point-of-sale technology, while gaining broader adoption for payments in other geographies.
Why did QR codes for payment become so popular in China? Some experts suggest it’s a combination of ease-of-access on the consumer side and adaptability and affordability on the merchant side—understandable in a country with 788 million mobile users.3
The success of QR codes for mobile payments in China is influencing other countries, as well. For instance, the influx to Japan in recent years of Chinese tourists—visitors who expect to make cashless payments—has pushed that island nation to increasingly adopt the QR technology the Chinese are used to.4
But what of the rest of the world? The QR story is looking up down under. It’s being reported that, in Australia, the New Payments Platform (NPP) is working to hook-up scan-to-pay QR codes to its real time network.5 The NPP is a payments infrastructure that enables Australian consumers, businesses, and government agencies to make real-time, data-rich payments between accounts at participating financial institutions.6,7
The NPP’s QR code push means merchants will be able to access the technology from domestic banks and local payment schemes without having to hook-up to an overseas provider.
“The NPP QR Code Standard provides a single common code for payment solutions across multiple payment service operators, as well as the ability to facilitate payments among different payment schemes, e-wallets and financial institutions,” said Adrian Lovney, chief executive of the NPP.8
Some believe that the entry of the NPP into QR code payments with a consistent standard that links both traditional institutions and so-called “neos” and fintechs will create a more level playing field.
Things are moving briskly in Europe, as well. The providers of six mobile e-wallets in Europe are collaborating with China’s Alipay in a QR code mobile payment network that allows users of each wallet to pay for their purchases across 10 countries in Europe. The six European mobile wallets are Austria’s Bluecode, Finland’s ePassi and Pivo, Oslo-based Vipps, Spain’s Momo, and Portugal’s Pagaqui. Since its establishment, Alipay—which is now Ant Financial Services and is an affiliate company of the Chinese Alibaba Group—has amassed more than 1 billion annual active users together with its mobile wallet partners in Asia.9
To facilitate the initiative, EMVCo—the global technical body that manages the EMV security Specifications—has created a QR Payment Mark to promote global interoperability across EMV QR Code payments.10 In 2017, EMVCo published the EMV® QR Code Specifications to address two prevalent QR Code payment use-cases:
The QR Payment Mark may be used to inform consumers that a merchant accepts EMV® QR Code payment solutions.
In 2017, the Payments Council—a group of banks, payment service providers, businesses, and trade associations in Singapore—advocated the use of QR code-based payments as a practical and convenient way to introduce e-payments to merchants. However, this group noted that the proliferation of proprietary QR codes risked fragmenting payment solutions and would cause inefficiency among merchants and consumers.
Building on the work of EMVco’s "QR Code Specification for Payment System–Merchant-Presented Mode," the group created Singapore Quick Response Code (SGQR), said to be the world’s first common QR code specifications for e-payments. It is designed to facilitate the creation of a single QR for each merchant, supported by a central infrastructure. It is not a separate payment scheme but, instead, adopts the EMVco standards and customizes them for the Singapore market.11
The Chinese payment solutions company SwiftPass is looking to move the QR code beyond that country to the U.S. and the rest of the world.12 According to the company, when consumers think of mobile payments in the U.S., they think of Apple Pay, Google Pay, or their banks’ mobile app. SwiftPass, however, believes it is the QR code that is the future of mobile payments everywhere, explaining that it settled on QR codes because of the cost-effectiveness and ease of use for merchants.
Some U.S. retailers have already adopted QR code payment technology. One rapidly growing use is in-store payment—that is, allowing the consumer to use an app that can generate a QR code, which can then be scanned at checkout to transfer payment information.13 This includes such major U.S. brands as Dunkin Donut, Target, Walmart, Starbucks, CVS, and Macy’s. In an effort to move the QR code further into the consumer space, Fandango recently let consumers buy tickets to superhero horror film, "Brightburn" by pointing their smartphone cameras at the TV screen. Commercials for the movie had a QR code that, after scanning, automatically brought mobile users to the Fandango site to buy tickets, according to the company.14
The U.S. may not enjoy the same objective conditions as China, noted SwiftPass CEO Daniel Xian, but he still sees success for QR-based mobile payments in the U.S.: “It takes time and needs time to develop the habit. Getting merchant scale is easy, but scaling users is different.”15
Introduced many years ago, QR codes seemed to fade away quickly here in the U.S. But, today, QR codes are widely adopted for mobile payments in China, and merchants in other countries are beginning to find them an easy way to make and receive mobile payments without using specialized point-of-sale technology. Even in the U.S., many believe QR code technology is evolving into a viable and valuable answer for brands that want to manage their own payments ecosystems.
Tim Moran is a veteran business-technology journalist. He has most recently been involved in brand publishing startups, including creating CMO.com for Adobe.
1. “Can QR Codes Make a Comeback as a Payments Technology?,” B2C; https://www.business2community.com/mobile-apps/can-qr-codes-make-a-comeback-as-a-payments-technology-02211075
2. “China Tech Giants’ Costly Wars to Go Cashless,” The Wall Street Journal; https://www.wsj.com/articles/china-tech-giants-costly-wars-to-go-cashless-1528977600
3. “China Now Boasts More Than 800 Million Internet Users And 98% Of Them Are Mobile [Infographic],” Forbes; https://www.forbes.com/sites/niallmccarthy/2018/08/23/china-now-boasts-more-than-800-million-internet-users-and-98-of-them-are-mobile-infographic/#63ba359d7092
4. “Japan Adopts New Payments Tech in Response to Chinese Tourism Boom,” Skift; https://skift.com/2019/03/25/japan-adopts-new-payments-tech-in-response-to-chinese-tourism-boom/
5. “New Payments Platform ropes in QR codes,” iTNews; https://www.itnews.com.au/news/new-payments-platform-ropes-in-qr-codes-526064
6. New Payments Platform, NPPA; https://www.nppa.com.au/the-platform/
7. NPP QR Code Standard, NPPA; https://www.nppa.com.au/wp-content/uploads/2019/05/NPP-QR-Code-Standard_v1.0_May-2019.pdf
8. “New Payments Platform ropes in QR codes,” iTNews; https://www.itnews.com.au/news/new-payments-platform-ropes-in-qr-codes-526064
9. “Alipay and six European digital wallets join hands to increase adoption of mobile payments with QR code,” South China Morning Post; https://www.scmp.com/tech/e-commerce/article/3013833/alipay-and-six-european-digital-wallets-join-hands-increase
10 “EMVCo Creates QR Payment Mark to Help Promote Worldwide Acceptance and Interoperability of EMV® QR Code Payments,” https://www.emvco.com/wp-content/uploads/documents/QR-Code-Mark_FINAL.pdf
11. “Can QR Codes Make It in America? SwiftPass Thinks So,” Monetary Authority of Singapore; https://www.mas.gov.sg/development/e-payments/sgqr
12. The Next Payment Ecosystem, SwiftPass; http://www.swiftpassglobal.com/
13. “Ten Retailers Using QR Codes for In-store Payments,” aila; https://ailatech.com/blog/ten-retailers-using-qr-codes-for-in-store-payments/
14. “Fandango sells 'Brightburn' tickets through televised QR codes,“ Mobile Marketer; https://www.mobilemarketer.com/news/fandango-sells-brightburn-tickets-through-televised-qr-codes/555501/
15. “Can QR Codes Make It in America? SwiftPass Thinks So,” https://bankinnovation.net/2018/11/can-qr-codes-make-it-in-america-swiftpass-thinks-so/
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