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Are QR codes the next hot tech in Europe?

QR codes…. We’ve observed them being implemented in our day-to-day lives, yet not too long ago, these QR codes were mostly seen as a shortcut to access a webpage or a restaurant's menu. Now we’ve all heard of Asian countries where QR codes have been dominant in the payments landscape, but not until recently, western countries have started to leverage their widespread payment capabilities.

Contactless payments are undeniably growing faster than ever.

Global transaction values are expected to reach a whopping $2.5 trillion this year, from just $1.7 trillion in 2020. With Paypal’s announcement to bring QR code payments to Germany, it is clear that the US giant is eager to leap the fruits of this lucrative market.

With the PayPal solution, a QR code is scanned at the checkout on the user's smartphone, which then approves the payment in the app. Paypal argues that the largest advantage to consumers is that they are not required to physically enter a pin after exceeding their purchasing limit.

  While QR code payments are rather alienated across Europe, this technology has enabled China for instance to leapfrog over cards, with the QR code itself now operating as the go-to payment method. But in all fairness, the rising popularity of QR codes is not so surprising when you consider the relatively low merchant fees and entry barriers in contrast to NFC payments. If you are interested in a more in depth comparison between NFC vs QR codes payments, check out one of our previous episodes.

Will we witness a similar adoption rate in Europe? 

Well, a recent survey revealed that 90% of respondents have used a QR code in the last month. 69% were also open to using QR codes for future payments, which suggests that QR code payments are on the brink of breaking into the mainstream post-pandemic. 

All signs indicate that the European story will be fundamentally different to the Chinese one, in that it will complement card payments rather than replacing it. 

But what about investors’ appetite in QR code solutions? 

Ambitious startups have set out to cash in on the quick response to QR, and increased consumer familiarity with the technology has not gone unnoticed by investors. The most notable investment in QR codes was secured by Sunday, the QR code payment system to speed up restaurant checkouts, marking it as one of the largest seed funding rounds in Europe

Orderli, the Amsterdam QR-based restaurant ordering platform, is taking part in the Y Combinator batch —  further signifying that QR can add significant value to the hospitality sector in Europe.

In the end, Europe has grown accustomed to contactless cards and mobile banking, which essentially perform the same functions as QR codes.

In our view, any mode of payment aiming to disrupt contactless must offer a significant and distinct benefit.  So, while QR codes play a decent role in the payments space across different verticals, it is likely to mainly flourish in the hospitality sector. 

Do you think that there is potential for QR payments to blow up outside of the hospitality vertical as well?

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