We're all familiar with QR codes by now. We’ve seen them printed nonchalantly on Car Magazine adverts, event tickets and glossy posters. Across Europe and the US, we recognise them as a way to access an event or engage with a brand, directing us to ‘find
out more’ via their webpages. Fundamentally, we consider QR codes to be convenient access points, but not until recently have we started to utilize their payment capabilities.
This differs us considerably from Asia and Africa, where QR codes are integral to financial networks and, indeed, financial growth. Fifteen million small and micro-merchants in China use Alipay QR code payments, whilst nine million member merchants use India’s
Paytm, the popularity of these apps only expected to gain more momentum over the next couple of years. In Africa, small business restaurant owners have taken to printing QR codes on receipts so customers can pay and leave as soon as they’ve finished eating.
There’s been such massive pick-up across these regions because QR codes are not only accessible to all, but they’re also incredibly versatile, especially for small businesses. All transactions can be completed through a smartphone or tablet, meaning merchants
are able to receive payment without needing to invest in installing a physical payment system.
There have been rumblings of QR-code take-up in the UK market, too. Consider China Town as an example. A bustling metropolis of steaming Asian food and chirpy tourists nestled in London’s beating heart. When passing corner shop windows and restaurant doors,
you’ll notice QR codes pasted across them, encouraging Chinese tourists to scan and consume. Harrods, meanwhile, has reported that £1 out of every £5 spent by Chinese visitors to London is spent within its walls, so could we expect to see more use of QR codes
there as well as in other high end department stores to cater for Asian customers in the UK?
One might argue not. Looking at the maturity of our banking systems, QR codes are unlikely to ever achieve the level of ubiquity they’ve enjoyed in Asia or Africa, where they’ve effectively replaced cash payments for P2P and small business transactions.
Whilst scanning a QR code seems a welcome novelty to us in the UK, we must consider the fundamental disparities between banking systems across the world. Banking systems in Europe have evolved differently; payment acceptance potential of QR codes was leap-frogged
long ago by the popularity of contactless cards, PAY apps and mobile wallets. As investment in this infrastructure has already taken place – and heavy investment at that – QR code payments here could seemingly be redundant.
On the other hand, there is another compelling role for QR codes to play across Europe, based on the wider change in expectations of fast, seamless payments, and a ‘tap and go’ experience. One successful application of QR codes has been by
Tesco, which linked its Clubcard loyalty scheme and mobile payments app, Pay+, enabling customers to earn and spend loyalty points on their shopping in its retail stores with the
simple scan of a code. The system has increased velocity at the checkout by removing the need for customers to carry a separate loyalty card, and ensures they see the benefits of shopping regularly in the store in terms of discount vouchers. Likewise, the
retail sector in Italy has broadened its payment options over the past twelve months, with SIA’s Jiffy now enabling QR code payments. Customers in a number of hypermarkets across
the country are able to use their smartphone to scan and pay. So, for the purpose of combining payments with loyalty schemes and data collection, we could argue QR has a place in our shops, restaurants and services, albeit somewhat limited.
Ultimately, the UK has become accustomed to contactless cards and mobile banking, which, in essence, do exactly the same thing as a QR code without the added effort of downloading bespoke apps. Once contactless is embedded, any form of payment attempting
to replace it must bring a major and unique advantage. For QR, those advantages are easy, cheap deployment for smaller businesses or the ability to add data or intelligence that connects to a customer loyalty system for larger ones. So, whilst there does exist
a role for QR codes in the payments space, we’re likely to continue associating them with event access and brand interaction for now.
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