QR codes have become the star player on the digital payments stage in China and throughout Southeast Asia. Consumers and businesses are wholeheartedly embracing mobile wallets powered by QR codes as the best way to pay, pretty much no matter where they are – or who they are. In fact, QR tech is so ingrained in China that even panhandlers are no longer asking for spare change, but are asking passersby to scan QR codes to make donations. Beggars can apparently be choosers when mobile payments are thrown into the mix.
But for all their remarkable success in the East, QR codes never really quite caught on in the United States or most of the rest of the West. Often written off as a technological solution in desperate search of an actual problem, the QR code fell by the wayside development-wise.
U.S. consumers could have learned to pay with QR codes, but the technology hit two major roadblocks. The first was that American mobile-wallet providers pretty much avoided it, starting with Apple eschewing QR codes in 2014 in favor of the higher-tech (and more secure) NFC technology.
Second, U.S. consumer interest in adopting mobile payments had been pretty consistently low. It turned out Americans liked paying by card just fine and weren’t looking for a change.
Or at least they weren’t until COVID-19. According to PYMNTS/PayPal’s most recent How We Shop Report, the pandemic raised concerns about health and safety that resulted in some very notable shifts in consumer preference.
By and large, they’ve shifted away from physical shopping experiences to digital ones – and it seems that many might be quite content to stay that way for some time. Only about half of those who said in March that they would return to physical retail after COVID-19 were still planning to stick with brick-and-mortar shopping.
The other half was now leaning toward staying digital – and when they do go to stores, contactless payments have taken on big importance. Some 57 percent of consumers reported that they now pick merchants partly based on the payments options offered.
Contactless payments have become an area of high interest, with 26 percent of consumers saying that merchants must accept contactless to make people feel comfortable shopping in brick-and-mortar stores. Among QR code enthusiasts, the pull is even stronger.
“The convenience of using digital payments such as QR codes resonates so well that over one-third of the consumers who prefer them [34 percent] would not even consider making purchases in a physical store without them,” the new study found. Moreover, the report found that among digital wallet users, 40 percent reported that they wouldn’t transact with merchants who couldn’t take payments from one.
The study further found that QR codes are emerging as an important offering – not only for consumers, but also for merchants to enhance their loyalty relationships with customers. That’s particularly true when merchants pair QR with other often-requested features like buy now, pay later (BNPL).
And as big names in tech are rushing to enable QR codes, merchants are getting in on the gold rush as well. CVS and Walgreens have both announced big QR integrations this year, as has Crate & Barrel. Meanwhile, the Jacksonville Jaguars NFL team is allowing QR-based mobile payments at retailers and concessions at the franchise’s stadium through a mobile Jags Pay wallet in the official team app.
Uber Eats also announced a new QR-based upgrade this week for in-restaurant dining. It will allow diners to scan QR codes to order and pay for their meals, all within the safety of the Uber app.
That’s well-timed: As PYMNTS studies have demonstrated throughout the pandemic, consumers want to feel safe – safe when they shop and safe when they pay. And if they aren’t feeling safe with something, they aren’t going to do it.
For now, QR codes are a payment method that’s delivering that sense of safety. That means a method that was once a payments fizzle in the U.S. market is now well on its way to becoming a payments sizzle in a post-pandemic world.
Article Credit www.pymnts.com
