QR payments hit pay dirt!
Scanning a QR code to make a payment is somewhat incongruous in countries like the United Kingdom, but it’s exploding elsewhere. This technology, originally developed in Japan, has captured the Chinese and Indian markets, and the rest of the world is starting to pay attention.
QR codes were dismissed in some countries for their apparent gimmicky-ness, or because the experience of using them – to make a payment, for instance – wasn’t quite streamlined enough. But, with its popularity surging in other regions across the globe, it turns out, it wasn’t the QR code that was the problem: rather, the circumstances weren’t quite right – or ready – for them, says Frans Labuschagne UK & Ireland country manager, Entersekt.
With major advancements in mobile payment technology shaking up the fintech space, these black-and-white 2D bar codes are starting to make an impressive comeback. But what needs to happen for them to take off in more developed parts of the world, like the United Kingdom?
Barriers to overcome
First, interoperability needs to be addressed. If you want to make a payment using a QR code, there’s nothing more frustrating that finding out that you need to download an additional app before doing so. The last thing you need is yet another app hogging space on your phone – which, in all likelihood, will be one among many payment apps clogging up your memory (not to mention demanding your details in order for you to enroll).
Financial institutions and card providers have cottoned on to the fact that this is a serious barrier to QR uptake and are finally starting to come together to find a real solution. Mastercard, for example, is making serious waves in India and Africa, partnering with QR providers to encourage mass consumer adoption of this payment method.
This brings us to another major obstacle that requires addressing: enrolment. Each time you download a payment app, it requires you inputting your details – a tedious process, which is often either legitimately risky or at least perceived as being so.
Added to this is the fact that generally, this process requires you to remember yet another password, or to input some variety of biometric (which not everyone is comfortable doing and not every smartphone caters for). Sometimes the process is smooth, but when it’s not, users are likely to abandon the process altogether.
Enrolment is a pain, and users are suffering from app-fatigue due to the onslaught of providers all vying for attention. This brings us to the issue of process – if a payment provider doesn’t offer a seamless experience, you will not be successful in capturing a customer base.
Technology is advanced, and in places like the UK, a sluggish load time or jittery interface will not be tolerated. Whatever you offer your audience needs to work, and work fast. Competition is fierce, and digital challenger banks and payment providers are giving banks pause for thought as they compete for a younger generation’s attention; a generation unattached to physical cash and fully immersed in the digital world.
Digital payments are becoming easier and more common. Each new generation is more comfortable with tech than the last, and also less tolerant of a less than ultra-smooth experience. There are so many payment experiences being launched, each promising a better – and more secure – approach to handling your money.
Things are changing fast, and those not adapting will get left behind. According to The Economist, the EFTPOS (electronic funds transfer at point of sale) machines ubiquitous in wealthier countries, for instance, may be supplanted in many developing regions by an app on a small merchant or retailer’s smartphone. In much of the world, this is likely to be one that can read a QR code.
The way forward
Consumer demand and competition from slick payment apps are forcing card providers and banks to find creative ways to overcome issues like interoperability. Many other nations – Japan, Pakistan, and China, to name a few – have already made huge inroads.
In India, for example, an agreement between Mastercard, Visa, American Express, and National Payments Corporation of India (NPCI) has led to the launch of Bharat QR, which eliminates the need for consumers to use multiple QR codes from different payment networks and apps when transacting.
Similarly, merchants need only display one single QR code at the storefront or through their respective acquiring bank’s mobile app. The move to simpler payments solutions is a worldwide trend and an especially important one in developing regions, but this doesn’t mean that territories like the UK can afford not to take this movement seriously.
South Africa, as another example, has recently become home to a market-first innovation with local bank Nedbank’s Scan-to-Pay. This in-app feature allows Nedbank’s customers to use their banking app to scan any QR code. Developed in collaboration with Mastercard, this feature appeared in Nedbank’s banking app without customers having to enrol – a quick update to the app and it was right there, ready to be used.
No downloading of additional apps to make payments; these customers simply use a provider they already trust – their bank – to enable this functionality. Interoperability, user-experience, enrolment – all overcome with one simple feature.
The convenience of QR codes paired with banking grade security, all converged inside the bank’s mobile app for the ultimate user-experience is surely the next step in creating a more accessible payments landscape – not just for developing countries, but for the rest of the world, too.
The author of this blog is Frans Labuschagne UK & Ireland country manager, Entersekt