It is very easy for many who are new to the fintech space to think that financial technology is an exclusive term for payments technology, and while there is some truth to this, it does not tell the entire story about fintech. However, in June, The Fintech Times is looking to indulge this belief as we look to discuss hot topics surrounding both sending and receiving payments, like buy now pay later (BNPL), early paydays and much more.
As the next chapter to our segment on payment innovation, today we’ve brought together a hot variety of industry experts to explore and discuss what is quite possibly one of the most practical, real-world examples of contemporary paytech in action: QR codes.
In very much the same way as you’d expect an ordinary QR code to work, payment QR codes initiate a payment process once the customer scans the unique graphic on their smartphone camera.
Once scanned, a payment channel is introduced to the consumer, inviting them to complete a certain payment process for a specific transaction.
The technology flexed its full potential at the height of the pandemic, extending well beyond the capabilities of payments to accommodate a valuable and completely touchless payment process.
According to the data of Juniper Research, the total number of QR code payment users is expected to exceed 2.2 billion in 2025, up from 1.5 billion in 2020; equating to 29 per cent of all mobile phone users across the world in 2025.
It’s undeniable that this popular form of paytech is here to stay, but aside from the immediate benefits it’s able to offer within a touchless, Covid-conscious environment, what are the other benefits of QR code payments?
Today we speak to experts working at the forefront of the industry to find out the answer:
According to Darren Beyer, co-founder and chief product and strategy officer at Qolo: “QR code payments have grown in popularity due to their continued payment benefits. QR codes provide quick and contactless payment options that are secure.
“Payments can also be offered at a faster speed by giving consumers the option to pay with their preferred digital wallets simply by pointing their phone at a code.”
Vijay Sondhi, CEO of NMI, identifies the seamlessness of QR code payments as one of the many major benefits: “QR code payments gained traction at the onset of the pandemic as they provided a quick, seamless and sanitary way for customers to pay.
“One big advantage of QR code payments is that consumers do not have to download or sign into anything in order to use them – all that’s required is the camera app. This creates a contactless payments experience without the need for a payment terminal and provides a great solution for software vendors since a payment page can be designed to support use-case-specific payment flows.
“Their versatility allows QR code payments to be offered in all kinds of settings from restaurants and stores to farmers’ markets and charitable organisations. Additionally, because QR codes are essentially quick links directly to a checkout page, they are as safe as any purchase made on an eCommerce site today for both the merchant and the customer.”
John Mitchell, CEO and co-founder of Episode Six, doesn’t just see the consumer benefits, but also the operational benefits the technology brings to merchants and acquirers, and how it is eliminating the need for additional hardware in payments: “They are easy to use for consumers and offer lower operating costs for merchants and acquirers.
“Businesses can create a unique QR code that, once scanned, brings their customers directly to a digital web payment form – functioning in the same way as a point-of-sale terminal. For customers, it offers a faster and more streamlined experience and for businesses, it’s not only easy to set up but allows them to accept payments from multiple customers at a time at a faster rate.
“QR code payments also immediately lower the operational costs as transactions are made with customers’ smartphones directly. As such, acquirers don’t need to provide a POS terminal for every merchant and the barrier to payment card acceptance is lowered – so more businesses, particularly smaller emerging businesses, are able to provide consumers with a value-driven service that offers choice and security.”
Philipp Buschmann, CEO and co-founder of AAZZUR, predicts that the speed of QR code payments will duplicate the success the technology has enjoyed amongst foreign markets: “Usually, they link to a bank account or peer-to-peer.
“The main benefit is they are faster and cut out the middleman. This is already the way people pay in China so it’s not new, but we haven’t seen it rolled out so much in the EU and UK, but I think it will become more mainstream.”
Pete Janes, CEO and founder of Shieldpay, adds to this with: “In the payments world, the benefits of QR codes were first realised in Asia, when small merchants or street vendors used them due to the lack of infrastructure for POS systems.
“Customers with digital wallets were then able to send funds directly to the wallets of the merchant, without the hassle of POS or card payments. These same benefits hold true across the world, offering direct and simple payments for anyone with a modern phone camera.
“Today, the benefits of QR codes extend beyond fiat currencies and into even cryptocurrencies. QR codes are now the most efficient and popular way to send or spend cryptos, again bypassing the need for terminals or a third-party processor.”
It’s clear to see from the current narrative that speed and accessibility are two of the major benefits of QR code payments, as Adam Chernichaw, fintech partner at Allen & Overy, perfectly described in this closing statement: “I think there are a number of benefits, all leading toward the further ubiquity of payments systems. QR codes are easy to access and set up (each party to a payments transaction only needs a smart phone), low cost (no payments terminals or other hardware), and relatively secure when compared to other payment methods.”