QR Codes to enter payments mainstream in wake of pandemic

- By Collaborative Media & Publishing
QR Codes are poised to enter the Australian payments mainstream after the COVID-19 pandemic turned them from a curiosity into a convenient habit.

For many Australians their first introduction to QR Codes has been checking in at a restaurant or shop as part of a COVID Safe plan, but QR codes have been around for a long time, and initiating payments has been one of their more useful applications.

In fact, BPAY Group launched QR Codes in 2012, less than a year after AliPay and WeChat introduced them in the Chinese market.

For over five years specialist computer software company Rockend has been ahead of the trend, delighting clients by taking advantage of BPAY QR Codes to automate the processing of bill payments for real estate and strata management companies.

While the technology is commonplace in countries such as China and India, Australia's well-established payments infrastructure made QR Codes largely unnecessary.

A decade ago almost two-thirds (62%) of Australians didn't know what they were or how to use them, according to an Econsultancy survey[1].

"It has taken the pandemic for Aussie consumers to realise the benefits of the technology," says Australian Retailers Association CEO Paul Zahra.

“As more Australians become accustomed to using QR Codes for things like checking-in to venues, we can see potential for payment providers to utilise new technologies for innovations that benefit customers," he says.

COVID changes attitudes to QR Codes

QR Codes are now a ubiquitous part of everyday life, such as checking in at shops, gyms, and libraries, which helps curb any community transmission of coronavirus. Australian state governments led the way by developing a QR Code check-in system for contact tracing.

"As customers were already accustomed to using their mobile wallets to make payments, they were quick to adopt using their smartphones to scan a QR Code before entering a premise," says Sumitra Krishnan, senior analyst for Australia's payments regulatory body AusPayNet.

State governments around the country launched QR Code check-in apps, with NSW making it mandatory, from November 2020[2], forcing millions of people to adopt the technology.

Consumers then started using in-app QR Codes to spend up to four $25 vouchers as part of the NSW government's Dine and Discover program, aimed at supporting businesses struggling in the wake of COVID-19.

"The simplicity and elegance of design of the Service NSW app has made QR very successful and made people comfortable with the technology," says payments expert Bradford Kelly.

Bringing innovation to payments

Eftpos has launched a QR Code standard for retailers which routes payments through its low-cost payment infrastructure. The network, which integrates numerous APIs, consumer digital wallets, and supporting technologies, will be established this year.

Krishnan says there are many more payment innovations in the pipeline for QR Codes such as in-person retail, e-commerce and peer-to-peer payments.

"Consumers can scan the QR Code displayed at store fronts and have the option for loyalty points to be credited to their account," Krishnan says. "Consumers can also scan the QR Code displayed at the checkout page on a merchant’s website to make the payment or even make QR payments through messaging apps or social networks."

Kelly says the possibilities for merchants extend even further.

"The real value will be unlocked by FinTechs who can develop additional capability," Kelly says. "Think online receipts, loyalty programs, instant warranty registration – not just the payment through eftpos," he adds.

QR Codes have also been touted as a way for small businesses, such as tradies, to potentially make Osko payments even more seamless.

QR Codes overseas: solving different problems

Australia has been late to catch onto the QR Code trend compared to countries such as China, where using it for payments is the norm.

Kelly says this is because the two countries are using the same technology to solve different issues.

"Australia has the most mature payment system in the world with eftpos and BPAY at the centre of that," Kelly says.

Hence, many Australians have become accustomed to ‘tap and go’ payments or BPAY to pay bills, removing the drive for new technology.

Conversely, China's rapid industrialisation in the early 2000s left a void in the country's payments infrastructure.

"China’s QR Codes were solving a different set of problems; namely fraudulent bank notes and limited payment infrastructure but with ubiquitous mobile phones and cheap data," says Kelly.

Chinese giants Alibaba and Tencent monopolised the space, engraining QR Codes as a common payment option. Now, they account for 90% of the $US17 trillion mobile payments market, according to a 2019 CGAP publication[3].

While the concept of using QR Codes for payments is still in its infancy in Australia, the recent rollout of low-cost initiatives and widespread use promises to make it more commonplace.

Just as rapid industrialisation cemented the use of QR Codes in China, so might the pandemic be the turning point for Australia.
[1] 62% of Australian consumers don’t know what QR codes are | Econsultancy. (2012, November 14). Retrieved from https://econsultancy.com/62-of-australian-consumers-don-t-know-what-qr-codes-are
[2] Mandatory customer check in for NSW venues. (2021, February 05). Retrieved from https://www.nsw.gov.au/news/mandatory-customer-check-for-nsw-venues
[3] China: A Digital Payments Revolution. (2021, May 27). Retrieved from https://www.cgap.org/research/publication/china-digital-payments-revolution

Published by BPAY Pty Ltd (ABN 69 079 137 518) email: marketing@bpay.com.au. The BPAY Scheme is managed by BPAY Pty Limited.  When you use BPAY payment products, the BPAY Scheme is paid fees relating to processing costs and BPAY Scheme membership.  Contact your financial institution to see if it offers BPAY payment products and to get the Product Disclosure Statement.  Any financial product advice provided by BPAY Pty Limited in relation to BPAY payment products is general advice only and has been prepared without taking into account your objectives, financial situation or needs.  Before acting on such advice, you should review the Product Disclosure.

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