Speeding up the adoption of QR payments in ASEAN

Retail merchants accept QR payment. How about scaling it bigger as a payment mode for public transportation?


In ASEAN nations, the QR payment landscape is becoming more diverse. Users can use QR payment for food and beverage (F&B) purchases, retail purchases and taxi services. But, the pool of users is small and still has room for growth. QR payment option for public transportation can attract the large volume of commuters.

China has once again set the bar higher and led the way in QR payment for transportation. Shanghai metro conducted pilot QR payment trial at two stations in October 2017. By January 2018, its whole subway network has adopted the innovative technology. The speed of roll was impressive.

Commuters will take only half a second to pass through the turnstile after scanning the QR code. The user pays for the fare via their Alipay or UnionPay account. Also, the process does not require Internet connectivity. If ASEAN’s public transport firms follow suit, QR adoption rates will spike in a short amount of time.

Souce: Technode

QR technology can replace electronic data capture machines

Quick response (QR) codes are not like the traditional one-dimensional barcode. They encode links to websites, map locations, contact cards and other form of data. Each QR code can hold up to 300 times more data than its predecessor. Through QR code technology, companies can transact offline. In August 2017, a satellite outage affected credit card transactions in Indonesia. The retail stores could not process payments using electronic data capture machines. Businesses were affected during the weekend.

These card-swiping machines have been around for ages. Its reliance on Internet connection makes QR technology a better alternative. Go-Jek has recognised the potential of QR payments. In April 2018, it reactivated its QR Code payment system after a two-month break. It has since attained the required Bank of Indonesia licenses.

Go-Jek aims to replace electronic data capture machines. It continues to engage partners to adopt its QR payment code. The firm has also enhanced security through both dynamic and static QR code. If Go-Jek can do it, what is there to stop retail outlets from fully adopting QR payments? The future ahead does not include a physical POS terminal that is dependent on Internet. Seamless cashless payment modes will pave the way ahead.

Adopt QR payment or risk losing the game

In March 2018, Hanoi Commercial Joint Stock Bank has introduced QR Pay. It is not the first bank in Vietnam to do so, and it will not be the last. No one has the luxury of time. Neither can the current firm be complacent with its current achievements.

Firms need to anticipate competition from different players in the industry. For instance, Pundi-Pundi is a startup that positions itself as a stepping-stone. The Indonesian startup deals with microcredit system. After securing its user base, it can consider rolling out QR payment.

SpherePay is another interesting startup in Singapore that offers QR code-based payment solutions. It secured funding of US$10 million to expand across Southeast Asia. It offers a novel “buy now pay later” function. When more firms offer QR payments, it will be trickier to consolidate market share. Existing QR payment players need to move fast to secure their standing.

Big players are making an effort to stay relevant

The incumbent players have existed without much threat until recently. Technological and innovation capabilities aside, their established branding gives them an added advantage. However, it does not make them infallible.

Mastercard and Visa are global payment solution companies. The rise of national QR codes dulls their attractiveness in changing times. To stay relevant, they launched Visa-certified QR solutions and Masterpass QR. FOMO Pay and Razorpay have secured approval to roll out Visa-certified QR solutions. They are the first in Asia to do so. The promise and credibility of the Visa brand set them apart from other QR codes, which may be less secure. Security lapses may send users into fear. It may also strengthen their preferences for cash or other payment providers.

Mastercard has introduced Masterpass QR since 2016. It has also joined hands with EMVCo and other industry players to develop a new global QR standard. EMVCo is a consortium of international payment schemes. Mastercard’s involvement gives it more clarity on the future of the payment industry. It can still set itself apart from its competitors. This global standard will affect all regions, including ASEAN. Singapore is one of the ASEAN nations that built its SG QR code on the specifications of EMVCo.

Unlike China, there is no clear leading QR payment firm in ASEAN. Incumbent and new players alike need to capture the likes of the mass audience. Moreover, they need to do it fast. Perhaps it is time to make a bold move and try rolling out QR payment for public transportation.