If you’ve dined out at restaurants or went shopping lately, you may have noticed that more businesses are offering QR code payments. Juniper Research predicts that the use of QR codes for electronic payments will surge over 300% over the next five years.
Given the demand for all things contactless during the pandemic, it isn’t surprising that these machine-readable barcodes are becoming more widely offered. As merchants implement this emerging payment type into their current ecosystem, it’s critical to understand the different approaches to QR code acceptance and carefully consider the options when selecting the right technology and solution.
Consider the Two Different Types of QR Code Payments
When looking to facilitate QR code payments, an important decision that businesses will need to make is whether they’re going to implement a consumer-presented QR code solution or a merchant-presented. Ultimately, to win in the U.S. market, merchants, especially enterprise-class corporations, should have the flexibility to handle both acceptance methods.
Consumer-Presented QR Codes
Consumer-presented QR codes are those that show up on the consumers’ mobile devices through an app. The code shows up on the screen for scanning, which initiates the payment on the merchant’s application. The payment then runs through the rails of the merchant. This approach means consumers don’t have to worry about becoming dependent on their phone reception. Instead, they can ride the strength of a store’s telecommunications infrastructure.
Starbucks is an excellent example of a company that’s implemented consumer-presented QR codes successfully. This large coffee shop chain has trained users to use QR codes to pay and join its loyalty program to receive rewards and promotions.
Merchant-Presented QR Codes
On the flipside, merchant-presented QR codes show up on the POS payment device. Consumers scan the code from their smartphones. The payment relies on the account owner’s phone to contact the provider, such as Alipay or PayPal, and execute a payment. Smaller independent merchants will usually go this route because they don’t have the resources to invest in their apps. As many of us have experienced, cell reception can be dicey inside those four walls, even in the largest chains.
EMVCo, an organization that traditionally manages and evolves specifications for chip- and tap-based card acceptance, has articulated a well thought out similar scheme for merchant-presented QR codes. This spec looks to solve things like universality and value-added data embedding, defining QR code payments in a manner that simplifies retailer development and broadens the acceptance of QR codes globally. PIN entry device (‘PED’) leaders like Verifone and Ingenico are also making QR code payments available on the PED customer interface, which will make merchant-presented QR codes more commonplace.
Integrate and Accept QR Code Payments Seamlessly and Quickly
Merchants need the ability to adapt to changing standards and demands. Each approach has its pros and cons, making one attractive to specific markets and industries, while other sectors may gravitate to the alternative. These factors will influence which actor displays the QR code and which side does the scanning.
Merchants also need to evaluate their POS solutions and determine how to integrate and accept QR code payments as seamlessly as possible. This goal requires looking at the inherent restrictions of the solution and understanding how to fit QR code payments within the confines of the temporal relationship of a credit or debit card.
Additionally, there must be no delay in the loop when a transaction occurs, running from the POS to the merchant’s system to the service provider. Any transaction length that is repeatedly well outside norms established by existing tender types can cause frustration for both the store associate and customer. Merchants must ensure that QR code payments get processed quickly to decrease long wait times and bolster customer confidence in this method.
Keep Up With the Future of Payments With a Payments Orchestration Solution
QR code payments are becoming a mainstream payment type that will stick around long after the pandemic subsides. This assertion will resonate as consumers start shopping, traveling, and dining out again. In fact, according to Statista, by the end of this year, an estimated 11 million households in the U.S. will scan a QR code.
To help merchants keep up with this revolution, OLS Payments can deploy the latest payment options regardless of the processor’s development roadmap. Our payment orchestration solution simplifies the integration of QR code payments by managing the complexity of the message flow and making it easy for merchants to add new and exciting payment technology. Contact us today to learn more about how we can help you offer the latest payment methods to let your customers pay how they want to pay.