The Rise of QR Payment

QR payment has become increasingly popular in recent years, with a significant increase in adoption rates globally. By 2020, the number of mobile payment users had reached 1.35 billion worldwide.

In Asia, particularly in countries like China and Japan, QR payment has been widely accepted as a convenient and secure payment method. In China, for example, QR code payments accounted for over 40% of all mobile transactions in 2020.

QR payment has also been adopted by many merchants, with a significant increase in the number of businesses offering QR payment options. By 2022, over 75% of merchants in the US had implemented QR payment methods.

As a result, QR payment has become a mainstream payment method, offering a fast, secure, and contactless way to make transactions.

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The history of QR payment is a fascinating story that spans over two decades. It all started in 1994 when Masahiro Hara from Denso Wave invented the QR code system.

The first documented description of QR code-based payments came in 2010 from two patents filed by Shaun Cooley and Andrew Charles Payne. They described a payment mechanism where a website displays a QR code and a mobile device's camera is used to read the code and complete the payment.

QR code payment gained momentum in 2011 with the launch of the first mobile wallet app for cryptocurrency Bitcoin, which featured the ability to send and receive payments with QR codes.

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The QR code system was invented in 1994 by Masahiro Hara from the Japanese company Denso Wave. This marked the beginning of a new era in digital payments.

The first documented description of QR code-based payments came from two patents filed by Shaun Cooley and Andrew Charles Payne in December 2010. These patents described various payment mechanisms that used QR codes.

In 2011, Chinese company Alipay designed a QR code payment method that allowed partnering offline stores to accept payment by scanning an individual's QR code in Alipay Wallet. This was a significant milestone in the adoption of QR code payments.

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The first mobile wallet app for cryptocurrency Bitcoin featured the ability to send and receive payments with QR codes in March 2011. This was a major step forward in the use of QR codes for financial transactions.

QR code payment has helped mobile payment become the most popular method of payments in China, accounting for 83% of all payments as of 2018.

In the Philippines, QR payments are made possible through the QR Ph system, which is based on the Europay-Mastercard-VISA (EMV) standard.

The QR Ph system allows one QR code to serve transactions from different banks and e-wallets.

This standard was approved by the Philippines Payment Management, inc. (PPMI) in accordance with circular 1055 of the Bangko Sentral ng Pilipinas.

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In Indonesia, QR code payments are becoming increasingly popular, especially in the transportation sector, where commuters can now use QR code Indonesian Standard (QRIS) to pay for MRT and TransJakarta bus services.

The Philippines is also planning to integrate their QR payment systems into the ASEAN Integrated QR Code Payment System, which currently connects four countries: Indonesia, Malaysia, Singapore, and Thailand.

Indonesia's adoption of QR code payments in transportation has promoted a cashless society and mobile payments in the country.

The ASEAN region is embracing QR code payments with open arms, and for good reason. It's a convenient and efficient way to make transactions, especially when traveling between countries.

Four ASEAN countries - Indonesia, Malaysia, Singapore, and Thailand - already have their QR code payment systems connected, allowing users to make transactions in local currencies. Philippines is also planning to integrate its QR payment systems.

In Indonesia, the transportation sector has adopted QR code payments to promote a cashless society and mobile payments. Jakarta's MRT and TransJakarta bus systems now support payment via QR code Indonesian Standard (QRIS).

QRIS is a standardized national QR payment system launched by Bank Indonesia in 2019, supported by almost all payment services in Indonesia. It combines separate QR codes into one, making it easier for merchants to receive payments.

Malaysia is also seeing a rise in QR code payments, particularly in the transportation sector. KTM ETS and KTM Komuter Northern Sector, as well as KLIA Ekspres and Penang Ferry Service, are offering QR code payments to their passengers.

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In Singapore, the SGQR is a unified QR code payment system that combines multiple QR codes used by multiple payment services. It was launched in 2018 and is co-owned by MAS and IMDA.

The ASEAN region is taking a significant step towards a cashless society with the integration of QR code payments. It's a convenient and efficient way to make transactions, especially when traveling between countries.

Vietnam has its own national QR code payment standard called VietQR. It was introduced in 2021 by the National Payment Corporation of Vietnam (NAPAS) in partnership with several major banks.

VietQR aims to streamline digital transactions across various financial platforms by using a unified QR code format that supports interoperability among different banks and e-wallets.

In Vietnam, mobile smartphone usage is high, making the Merchant-Presented QR Code solution a cost-effective option that doesn't require the infrastructure of a point of sale terminal.

VietQR is a collaborative effort to promote digital transactions in Vietnam, and it's great to see countries investing in modern payment systems to make life easier for their citizens.

Here are some key features of VietQR:

QR Payment Systems are becoming increasingly popular worldwide.

ASEAN countries have an integrated QR code payment system that allows users to make transactions with local currencies, such as exchanging rupiah for baht in Thailand.

In Sweden, Swish is a mobile payment system that allows users to make instant payments by scanning a QR code, launched in 2012 by six large Swedish banks.

QR code payments are accepted at over 1 million small businesses and top retailers worldwide, including CVS pharmacies and Bloomingdale's, through PayPal's Scan-to-pay service.

The ASEAN integrated QR code payment system currently connects four countries: Indonesia, Malaysia, Singapore, and Thailand, with the Philippines planning to integrate their QR payment systems soon.

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To use QR payment, you need to figure out the payment flow so you know which data to include in the QR code. This involves deciding whether to request authorization to transfer a certain amount, open a hosted payment page on the user's browser, or prompt the user to send funds through their mobile payment app.

Once you've decided on the payment flow, you'll need to use a purpose-built tool to generate the QR code itself. This code will store information as a series of pixels, which will be read by the user's smartphone when scanned.

To display the QR code, you can place it on the checkout page of your website or app, print it on a paper receipt, or put it on a physical sign. The customer will then scan the code using their smartphone, which will trigger the next step in the payment process.

The type of payment that will be triggered depends on the specific payment journey you've set up. You should inform your customer whether they will need to choose their own payment method, open a specific app, or if the transfer happens instantly once scanned.

Using a QR code, you can also collect a payment from your customer by scanning a QR code that they have saved to their mobile wallet. To do this, you'll need to have the ability to use the same app or POS software that generated the code.

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QR payments offer numerous benefits, making them a convenient and secure option for transactions. They require low equipment costs, as all you need is a smartphone and a downloaded app, making it easy to roll out online or in-person.

One of the main advantages of QR payments is their simplicity. They enable a fast and convenient payment experience for both customers and merchants, resulting in happier customers, more conversions, and increased revenue. This is because QR codes eliminate the need for physical card readers and PIN codes, streamlining the payment process.

QR payments also offer improved security, as all payment information is encrypted, and no personal data is stored. This reduces the risk of data breaches and payment compliance liability.

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Using QR codes for payments offers several benefits. One of the main advantages is the low equipment costs involved. Unlike traditional credit and debit cards, which require standalone card readers, QR code payments can be set up with minimal specialized equipment - often just downloading an app.

The payment experience is also simplified with QR codes. It's fast and convenient, making it a great option for both businesses and customers. Happier customers mean more conversions and revenue.

With QR code payments, you can easily collect additional data from customers, such as their email address and phone number. This can be useful for marketing messaging opt-in or sending a digital copy of the receipt.

QR code payments also improve security. All payment information is encrypted, and there's no need to store personal information from customers. This can lower payment compliance liability, depending on the payment channels used.

Using QR codes for payments offers a more secure alternative to carrying cash or multiple plastic cards. This is because QR code payments benefit from the additional security features available through mobile payments.

Two-factor authentication (2FA) is a key feature of QR code payments, requiring approval using two methods of confirmation, such as entering a one-time passcode or logging in through a payment app. This adds an extra layer of security to the payment process.

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Biometric authentication methods, like fingerprint scan or face scan, are also commonly used in QR code payments, providing a more secure way to authenticate payments compared to traditional payment methods. Tokenization is another security feature, where customer payment is stored as a token in a digital wallet, making it difficult for data thieves to access account details.

Here are some of the security features of QR code payments:

By using QR code payments, you can reduce your payment compliance liability and provide a more secure experience for your customers.

Convenience is key with QR payments. Enabling merchants to accept digital payments reduces cardholders' reliance on cash.

No more fumbling for cash or cards – just scan, pay, or get paid and be on your way. This simple and convenient way to get paid for goods or services is a game-changer.

With QR payments, you can send money in a snap. This eliminates the need for physical cash or cards, making transactions faster and more efficient.

Here are some benefits of QR payments:

QR payment in superapps is incredibly popular in East Asian countries, particularly in China where WeChat Pay and Alipay allow for speedy bill payment.

These superapps are designed to be all-in-one solutions that enable users to carry out a range of actions they'd normally need several individual apps for.

In China, QR code payments are a cornerstone of these superapps, with funds deducted from the customer's account in near real-time upon scanning the merchant's QR code.

Similar solutions exist in other countries, such as Kakao Pay in South Korea, LINE Pay in Japan, and GrabPay in Malaysia.

LINE Pay, for example, allows merchants to charge a fixed amount that's paid upon scanning the QR code, or to allow the customer to enter a custom amount after scanning the QR code.

This flexibility makes the solution suitable for a range of business models, catering to different payment types as needed.

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QR payment is becoming increasingly popular as an alternative solution for merchants and issuers to expand their customers' payment options. American Express offers two QR code based payment solutions to meet the needs of their cardmembers and merchants.

The American Express Merchant-Presented QR Code requires merchants to display the QR code in-store, either as a decal or through a terminal, for cardmembers to scan using their smartphone.

QR codes are a registered trademark of Denso Wave.