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.
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.
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.
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?
As competition in the payments ecosystem is riling up between traditional and challenger banks, reshaping core systems and technologies of traditional banking is long overdue. When talking about future-proofing banks and financial services, the term Banking-as-a-service is starting to come up a lot. But what is banking as a service all about and how is it reshaping the industry?
Apple’s push to secure a spot in the payments ecosystem is still going strong. Or at least that’s the plan — executing on it may be … well, not that simple. This is because Apple has been making moves to build a network of merchants, among the most critical components of the payment value chain … with functionalities that are already out there in the market.
If you’ve even moderately kept an eye on any payments related news source, there’s no way you have not been bombarded with the Buy Now Pay Later craze in 2021. Almost all the widely known payment players in the field who could partake in the BNPL craze… actually did. We are quite sure that you have heard about the likes of; Klarna, Affirm, and Afterpay, but industry Giants such as Mastercard, Paypal, Visa, Square, Monzo, Revolut, Amazon, and even Walmart, are all offering BNPL options at checkout or are partnering with BNPL companies to offer this service to their customers. Even mighty Apple is climbing aboard.