Exploring QR Codes for Faster Payments

Around the world, QR codes continue to explode in popularity as a payments instrument. In China, over the past three years, QR code “scan-to-pay” solutions have grown 15-fold, reaching $1.3 trillion U.S. in the fourth quarter of 2019.  And globally, 4% of all consumer transactions leverage a QR code, according to research from Kleiner Perkins Caufield & Byers, Visa Inc., and GfK.  

While many digital payments modalities are gaining traction today, the opportunity with QR codes lies in their ability to offer the optimal “high-tech-meets-low-tech” solution. From a purveyor’s perspective, QR codes require limited investment and preparation: no hardware investment required. In fact, friends of mine reported buying lunch from a street cart in India with a printed QR code taped to its side as its only form of payment. And, because you can place a QR code on anything—from a utility bill to a food truck—you’re able to simplify the payment interaction. That kind of flexibility speaks to the payer, making it frictionless and creating a consistent experience. 

And, as QR codes have been on the rise internationally for years, they have also finally begun to gain some traction in the United States. So, why do we think QR Codes are about to take off as a way of initiating faster payments? 

With increased consumer and business demands on efficiency and speed, QR codes check a lot of faster payments boxes. They provide an easy interface, offer a layer of tokenization, and take advantage of an existing consumer understanding of the technology. Add in today’s COVID-19 environment and post-pandemic expectations of continued growth in digital and contactless payments, and the time is right to lean into this technology to advance the U.S. Faster Payments Council's mission of making ubiquitous, easy-to-use faster payments a reality for the U.S. economy. 

So, that’s the intent of the FPC’s newly formed End-User QR Code Interface Work Group. The group has been tasked with examining ways QR codes may facilitate adoption and usage of faster payments. This group plans to develop recommendations for a QR Code interface for use by participants in faster payments transactions—one that will enable a frictionless faster payments experience. 

But as the FPC launches this initiative, we do it with the knowledge of the work that has preceded us. From EMVCo’s specifications to Nacha’s historical work on QR codes for billers, a number of organizations have investigated the role of QR codes in payments, paving the way for our focus on leveraging this technology to facilitate faster payments solutions. With that in mind, the first deliverable from this FPC Work Group will be an evaluation of what exists, and a review of those codes specifically used to facilitate faster payments in the United States and abroad today. From there, the group will be diving into unique needs around faster payments. What are the necessary components of QR Codes to facilitate a faster solution, and what will it take to get it to market? 

These are the questions the FPC is uniquely poised to address. We intend to be an organization where real-world solutions can be brought to life, and a faster payments QR code interface offers a great starting point. Now it’s up to FPC members to act on that vision and build the solutions that support the needs of the industry. As the future of faster payments unfolds, I hope you’ll join us on this journey.

For more information about the FPC or its Work Group plans, reach out to memberservices@fasterpaymentscouncil.org.