Finance
How European Merchants can take advantage of QR Code Payments uch of the focus in Europe’s payments space has recently been directed towards QR codes, given their broad implementation in restaurants and bars during the pandemic. However, QR - ‘quick response’ - codes are all but new and the value they can add for businesses ranges far beyond the possibility of reading a menu on your phone and interaction-free ordering in the hospitality sector.
From East to West QR codes function in a relatively simple way: the black squares and dots together represent certain pieces of information, for example, a URL. After scanning it with a smartphone, the code will trigger an action on the device which redirects the user to a portal or landing page where they can make a payment. Alternatively, and as has been common through platforms such as WeChat Pay for roughly a decade now, the QR code initiates a payment against a stored card, bank account or wallet balance and funds this to the merchant account. This method of making direct payments through QR codes is already common throughout Asia. But QR code payments have only recently been deployed in Europe, primarily as a means of directing users towards a digital checkout experience where customers pay using a mobile wallet, card, or alternative payment method such as PayPal.
How will QR codes be used in the future? QR code deployment in Europe has predominantly been as a vehicle to initiate digital checkout experiences from a mobile 66
device – rather than the payment method itself. So, it’s unlikely that QR codes will serve as the predominant payment method over cards or digital wallets, but rather they will continue to be employed more broadly as a payments mechanism, allowing users to complete a checkout experience and select their payment method of choice. For instance, a small business owner without an in-store POS terminal could use QR codes to host the payments experience on the customer’s own device, redirecting them towards an online or inapp checkout experience. Nevertheless, this doesn’t mean that QRs will never be deployed as payments methods themselves in Europe – in fact they already are. Rising numbers of Asian students and tourists throughout Europe present businesses with a growing opportunity that cannot be overlooked. Their favour – and consequently larger shopping baskets – can be won by presenting them with the option of QR code-based payments through the major Asian ‘super-apps’. As a result, we are increasingly witnessing shops and vendors in principle European cities displaying small WeChat Pay or Alipay QR code tiles in order to offer these users’ preferred checkout experience. Additionally, technological improvements in point-of-sale hardware offer an insight into how businesses are developing their methods of accepting transactions. Until recently, the majority of Europe’s POS terminals were of typical Ingenico or Verifone make, featuring small screens and a physical keypad. However, nowadays merchants are moving towards the adoption of android-based terminals with large touch screens - ideal for easily displaying and scanning QR codes. These
enhanced visual displays present new opportunities for small businesses to use QR codes to offer expanded in-store options for customers, such as BNPL (Buy Now Pay Later) and even Open Banking. That being said, it is vital to strike a balance here, since offering too broad a selection of payment channels could negatively impact the positive checkout experience by confusing the customer.
