What's Next for QR Payments After COVID-19?

Pandemic Supercharged Popularity of Contactless Payment Methods

In recent years, the most significant driving factor for a change in global consumer behaviour has been seen as a result of COVID-19. Contactless payments were heavily encouraged by most governments during the height of the pandemic, which was furthered by businesses that only accepted forms of cashless payments.

While this was initially done with the aim of reducing physical contact and bacteria transmission, many businesses have since announced they will be continuing contactless payment processes indefinitely; ostensibly due to the efficiency of these methods compared to cash transactions.

Emergence of Common QR Standards in Numerous Markets

It is often assumed that the launch of QR code payments failed outside of China. Although China is still the leading market, this assumption is simply not true, as is evident from the rapid growth observed in a number of economies, including India, Singapore, and the US and UK.

This growth is, for the most part, the result of these countries (and many others) defining common QR payments standards. By stimulating growth and innovation, national QR standards such as UPI (India) or SGQR (Singapore) provide a major advantage for QR payments over other cashless payment methods; particularly where regulators are proactive with initiatives.

Increasing Personaliation Options for Retailers

By design, dynamic QR codes allow vendors to present personalised codes to each customer. Personalised content, on top of payment, creates a completely customer-centric payment experience; increasing consumer retention rate. Loyalty points, coupons and discount codes can all be added to dynamic codes.

On the merchants’ side, QR codes enable the tracking of consumer behaviours, such as time of payment, location and device used. Tracking these allows vendors to create improved marketing campaigns, understand their clients’ activities better and conduct performance analytics based on each variable.

Development of New Security Features

QR payments are sometimes perceived as not having the same degree of security as card. This is generally a concern that where cards are used in contactless, they already have security features and credentials at the network level protecting transactions. QR lacks these protections by default, but all QR schemes will have some security credentials.

There is some evidence that as well as experimenting with QR code payments, Apple is also looking to introduce additional security measures around them. There is also potential in using dynamic QR codes, rather than fixed ones, as well as using biometrics, tokenisation and API tracking to verify transactions.