QR codes: The best of all mobile app payments?

By Sarah Caroline Bell

Quick Response codes – or QR codes – have revolutionised the way payments are made across ASEAN. With a demand for mobile flexibility, multiple applications have sprung up to meet the needs of both business and consumers alike.

The popularity of QR codes in ASEAN basically stems from the ease of generating them. They are also immediately functional. QR codes are both current and controllable – two qualities that are prized by businesses needing to compete in a mobile environment.

Among the leading QR code-based apps available today are Moola, LINE Pay, and Moca. LINE Pay has experienced popularity since its move into Thailand, relative to the popularity of the chatting application LINE.

QR codes can be changed to meet the business needs of the day, with little expense. They require no additional purchases to be functional. So the creation of a QR code, or the scanning a consumer-produced QR code, is much cheaper than a traditional sales terminal set-up.

With no new technology required to accept payments, this presents huge savings for businesses.

Most importantly, they are compatible with just about all devices. New payment technology is hardly effective if it excludes a section of your potential customer base. But QR codes are compatible with every smart device. Their ease of use make it an attractive offering.

Near Field Communication – the rival of QR codes

QR code-based payments are rivaled by their closest competitors the NFC, or Near Field Communication. NFC has become popular due to the contactless method of payment authorization, and have become even more popular since Apple and Google released their own NFC based wallet systems. Apple Pay, Android Pay, Masterpass by Mastercard, and Dash are currently leading in the NFC industry.

Dash is unique in that it is a mobile money app that combines services that are normally serviced by a host of apps into one easy to manage application. It combines banking, telecommunications, and retail which results in a huge convenience experience for the user. Android Pay, recently launched and proving popular in Singapore, will eventually be extended to cover the rest of ASEAN. On the other hand, we have the likes of Google wallet. While popular in the US, this has made little advancement beyond its shores, and will most likely be left behind if it moves into the ASEAN region too late.

Some say that NFC is the future of QR codes, implying that QR codes are destined to become obsolete. I would disagree. While popular, NFC has been criticised for the fact that the payment method is limited by the uptake of NFC friendly devices. NFC presents a cost to the business which QR codes do not. For this reason, a QR code based system will always be popular for those unwilling or unable to afford to set up a POS suitable for both systems: small businesses.

QR codes will always have customers for this fact alone – small businesses are not going anywhere and they need to cater to their customers in a way that matches the pace of modern business. Further, NFC payments have one weakness: consumer confidence. Consumers are wary of wireless payments because of the ability of NFC to exchange data and other information wirelessly. QR codes, on the other hand, require a bit more customer engagement at the point of sale, and data cannot be transmitted wirelessly. Skimming is not an issue with QR codes, but with NFC, it poses a problem. Even if NFC is made secure, how do consumers become convinced of that fact?

QR codes aren’t going anywhere, and while seen as rivals, some devices have included both Q-codes and NFC to enable mobile payments. One of these devices is the robot Pepper, currently being used by 500 companies in Japan. It can interact with and accept both NFC and QR code payments. Does this compatibility predict a future of QR codes and NFC being used together? Yes. Some organizations are looking at this issue and are working to make both types compatible.

Just.cash, an ATM and POS software developer based in Florida, USA, can accept both QR code and NFC transactions. Currently providing NFC and QR code compatibility for ATMS, it is free software that enables ATMS to upgrade for no cost. Could it be possible that the same is able to be done at POS, too? It points to a future of both codes working side by side and a future where customers will be free to choose which payment platform they prefer; with smartphone technology already divided into two camps, it is impossible for there being just one winner.

Towards the future: will QR codes still come up tops?

The future of QR codes lies in expanding the range of possibilities offered to customers and business. We already see signs of QR code based systems being used to provide platforms that cover a range of goods and services. Multiple areas of business can be streamed into one; the possibilities are endless. From general banking transactions, investments, tax, employment, or trades – QR codes can be effectively used to make transactions simpler and in a timely manner.

Global mobile commerce is expected to triple in the next few years; which payment systems will prove the best? It is clear Android Pay has a lot to offer in the NFC realm, as does its competitors. LINE Pay looks to have an advantage in QR-code based payments, simply because of its popularity across ASEAN as a chat platform. For non-android NFC, there will be some stiff competition against Apple Pay; Apple users are renowned for their uptake of all that Apple creates. And in the NFC market, Apple Pay may be no exception.

For the mobile payment market, expect change and expect it to be rapid. In 2017, who is going to come out on top?