Even the man who invented QR codes says that they are an interim technology. But some of the payment solutions built using them should translate into an NFC/BLE world pretty well.
Here’s a quick payment quiz. Have a guess before you click on the link! Which of the approximately 10,000 new payment solutions that are under development right now works this way:
The system generates a unique QR code that allows a payment to be made, but no customer information or shopping data is passed onto the merchant, and all transaction receipts are kept on the app.
Well, if you guessed “all of them” you’re nearly right, but actually it’s a new payment system from Samsung (who make the S5, amongst other contactless-capable handsets) in Australia (which has a couple of hundred thousand contactless payment terminals in place and the highest retail use of contactless in the world). Why are they doing this? It’s not because QR codes are the best solution — they aren’t — but because better alternatives (NFC and Bluetooth Low Energy) have not been available. But they are now, which makes the Samsung launch rather surprising to me.
I used to think that I was abnormal because I can’t be bothered to scan QR codes, but it turns out that I’m actually quite mainstream.
In all of the time I’ve had a phone with a camera and an application for reading QR codes, which is quite a long time, I’ve probably used the functionality two, or at a maximum three, times. I wondered if this might be because I am old or because I am lazy or because I am insufficiently inquisitive, but actually it’s because I am normal.
Whereas I can’t be bothered to run a QE application and scan a code, I’m quite prepared to just tap on something or have something auto-open on my iPhone for me to confirm. Having been involved in quite a few NFC trials, pilots and tests I’m confident in saying that most people are the same. Consumers were perfectly happy to tap to get what they wanted and, as far as I can recall, actually rather liked it. It was the supply chain that didn’t work.
In other words, NFC is great but not yet relevant. This, to be honest, seem like a pretty reasonable assessment of the current situation and contains both good and bad news. The bad news is that the money that the payments industry is spending on NFC will have a much longer payback time than had been hoped. The good news is that we (consumers) end up with something that is simple and quick and secure.
[From Tomorrow’s Transactions]
So, as has been known for some time, this is generally true. When people are given the option of tapping, for example, over scanning then they greatly prefer it. The barrier to NFC in the mass market was never the consumer.
An analysis conducted by NFC specialist Connecthings has found that NFC phone users account for a disproportionate percentage of interactions with its NFC- and QR code-based marketing and information services platform
For these and other reasons (to do with security), I’ve always seen QR codes as an interim solution, something that will let people try out ideas (e.g., Bitcoin wallets) while we wait for something better to come along, but never the mass-market strange attractor for next-generation payments, no matter how much I like LevelUp. And it turns out that the man who invented QR codes agrees.
QR codes have seen a range of improvements through its 20 years, but Hara mentions that he believes that NFC and better image recognition will supplant the QR codes’ role.
For those already in the QR code space this isn’t particularly bad news in my opinion. Or, at least it isn’t for those who used the right consultants to help them to architect their solutions in the first place… The QR code is simply the “last millimetre” connection between the merchant and the consumer. Almost all of the systems that people have built are not to do with this: so if the last millimetre replaces the QR code with the more convenient NFC/BLE combination, then their solution will be even better and more convenient than it was before. We will certainly be advising our clients to structure their solutions so that that swapping out the last millimetre can be painless and cost-effective.