QR code payment

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A QR code payment is a mobile payment method where payment is performed by scanning a QR code from a mobile app. [1] This is an alternative to doing electronic funds transfer at point of sale using a payment terminal. [2] This avoids a lot of the infrastructure traditionally associated with electronic payments such as payment cards, payment networks, payment terminal and merchant accounts.

Contents

To make a QR code payment, the consumer scans the QR code displayed by the merchant with their smartphone to pay for their goods. [3] They enter the amount they have to pay and finally submit. [3] This is a more secure card-not-present method than others. [3]

History

The QR code system was invented in 1994 by Masahiro Hara from the Japanese company Denso Wave. [4]

In December 2010, the first documented description of QR code-based payments came from two patents filed by Shaun Cooley and Andrew Charles Payne, based on a prototype system developed for Norton Labs at Symantec called Norton Mobile Pay. US 8177125   describes a payment mechanism where a website displays a QR code and a mobile device's camera is used to read the code and complete the payment. US 9076171   describes payment mechanisms where a payment terminal displays a QR code that is scanned by a mobile device, a mobile device displays a QR code that is scanned by a payment terminal, and a mobile device displaying a QR code that is scanned by another mobile device. These patents have since been cited by companies like Wells Fargo, Google, Microsoft, IBM, United States Postal Service, Apple, Capital One, and Toast. There are no records of Symantec, Gen Digital, CA Technologies, or Broadcom attempting to enforce these patents in court.

The first mobile wallet app for cryptocurrency Bitcoin featured the ability to send and receive payments with QR codes in March 2011. [5] In 2011, Chinese company Alipay designed a QR code payment method which allowed partnering offline stores to accept payment by scanning an individual's QR code in Alipay Wallet. [6] In 2014, Chinese technology company Tencent introduced a similar feature on its messaging app WeChat to allow its users to make QR code payments. [7] QR code payment has helped mobile payment become the most popular method of payments in China, accounting for 83% of all payments as of 2018. [8] Nearly all shops, street vendors, most metro systems, buses, and taxis in Mainland China accept either WeChat Pay, Alipay, or Cloud QuickPass for payment. [9]

In 2012, the Czech branch of Raiffeisen Bank International developed the Short Payment Descriptor format for exchanging payment information via QR codes. [10] The format was soon adopted by other Czech banks as well as the Czech Banking Association as the national standard for QR code payments. [11] SPD can technically be used with any bank using IBAN account numbers, [12] although in practice it is only used within Czechia.

In 2014, Chinese technology company Tencent introduced a new feature on its messaging app WeChat to allow its users to make payments. This was introduced via in-app online wallet and a QR Code payment system resulting in major uptake in QR code payment services in China. [13] [14] [14]

In 2017, the National Payments Corporation of India (NPCI) launched BharatQR as a single, interoperable QR code that could be used for making payments to and from bank accounts using UPI and wallets. It works alongside QR codes from wallet providers as well as card providers such as Visa's mVisa and Mastercard's Masterpass. [15]

In 2020, PayPal announced the ability to pay with QR codes in its mobile app. [16]

Usage by industry

Transportation

China

Wuhan Metro introduced QR code payments across the whole network Passengers exit or enter Wuhan Metro system by QR code (1).jpg
Wuhan Metro introduced QR code payments across the whole network

Most metro systems, buses, and taxis in Mainland China accept either WeChat Pay or Alipay for payment. The national railway operator, China Railway, also accepts the two major apps for payment.

Hungary

qvik [17] enables payment within Hungarian National Bank's Instant payment system (AFR) by scanning a QR code, approving a payment request, NFC-based touch or clicking on a deep link within a mobile application. In addition to offering the same fast and secure payment as credit card systems for both purchases and bill payments, qvik is free for consumers and significantly cheaper for merchants than existing payment methods. Using qvik ensures payment security as the service is operated by Hungarian companies and user data remains within the country's borders.

India

Line 1 of the Mumbai Metro in India allows users to purchase a ticket on their phones using QR code payments. Instead of swiping an RFID card or single-use token, a QR code is generated on the Paytm app which is then read by a scanner mounted on the turnstile. [18]

Malaysia

QR code payment is becoming increasingly popular recently in Malaysia as a convenient and secure way to pay for transportation services. KTM ETS and KTM Komuter Northern Sector, as well as KLIA Ekspres and Penang Ferry Service, are all offering QR code payments to their passengers. [19] [20]

As Malaysia continues to modernize its transportation infrastructure, it is likely that more services including Rapid KL will adopt QR code payments to enhance the passenger experience and streamline operations.

Philippines

QR code tickets, named beep QR, were introduced in LRT-1 on 1 June 2023 by AF Payments, Inc., the operator of beep card, in partnership with Maya, an e-wallet app. [21] QR tickets can be bought on the Maya app or ikotMNL app. Each LRT-1 station is equipped with at least 1 QR code-enabled gate. [22]

Indonesia

Indonesia has adopted a QR code payment system in the transportation sector to improve convenience and efficiency for commuters. Jakarta's MRT and TransJakarta bus systems now support payment via QR code Indonesian Standard (QRIS). [23] This promotes a cashless society and mobile payments in Indonesia.

Integrated QR code payment systems

ASEAN Integrated QR Code Payment System

This integrated QR code payment system allows people to make transactions with banks or e-money that supports their local integrated QR code payment system in any of the participating countries. Local currencies are used in these transactions, meaning that transactions in Thailand using an Indonesian payment app will directly exchange rupiah with baht. Currently, four of the QR code payment systems in ASEAN are connected (Indonesia, Malaysia, Singapore and Thailand). Philippines are also planning to integrate their QR payment systems. [24] The following are QR Payment systems that are in or soon will be in the integrated payment system.

QRIS (Quick Response Code Indonesian Standard)

QRIS logo.svg

QRIS is a standardized national QR payment system for Indonesia launched by Bank Indonesia on August 17, 2019. [25] Almost all payment services in Indonesia support this system, including GoPay, OVO, Dana, ShopeePay, BCA, BNI, and BRI. [26] It combines all the separate QR codes from different payment services into one QR code which can be used by merchants to receive payments from any e-wallets or banks that supports QRIS.

DuitNow

DuitNow allows all participating banks and e-wallets in Malaysia to use the same QR Code for transactions. [27] It is launched by PayNet under the Bank Negara Malaysia's Interoperable Credit Transfer Framework (ICTF). Some of the banks and e-wallets that support this payment system are Maybank, Hong Leong Bank, CIMB, HSBC, Touch 'n Go eWallet, GrabPay, Setel, ShopeePay, OCBC, UOB, ICBC, and more. [27]

Thai QR Payment

Thai QR Payment (Promptpay) integrates QR payment systems in Thailand. It was launched by the Bank of Thailand.

SGQR (Singapore Quick Response Code)

SGQR Logo.png

SGQR is a unified QR code payment system launched on September 17, 2018. SGQR combines multiple QR codes used by multiple payment services in Singapore, including PayNow, into one QR code. [28] This scheme is co-owned by MAS and IMDA. [29]

Swish Payments

Swish is a mobile payment system in Sweden, launched in 2012 by six large Swedish banks, in cooperation with Bankgirot and the Central Bank of Sweden. It allows users to make instant payments by scanning a QR code.

QR Ph

QR Ph is the QR code standard in the Philippines, approved by the Philippines Payment Management, inc. (PPMI) in accordance with circular 1055 of the Bangko Sentral ng Pilipinas. The system is based on the Europay-Mastercard-VISA (EMV) standard, allowing one QR Code to serve transactions from different banks and e-wallets. [30]

VietQR

VietQR is the national QR code payment standard for Vietnam, launched as a collaborative effort by the National Payment Corporation of Vietnam (NAPAS) in partnership with several major banks, including Vietcombank, BIDV, VietinBank, and Agribank. Introduced to the public in 2021, VietQR aims to streamline digital transactions across various financial platforms by using a unified QR code format that supports interoperability among different banks and e-wallets.

UPI (Unified Payment Interface)

UPI is a unified instant payment system developed by the National Payments Corporation of India, launched on 25 August 2016 and was backed by 35 banks across the country in the first year of its launch. [31] Multiple startups like Paytm who were providing digital wallets for customers and merchants, along with new market players like PhonePe quickly got into the scene, with them incorporating new merchants by providing QR based payment solutions, along with QR code scanners for customers in their respective mobile apps which resulted in the widespread use of QR based payments in India. In FY 2023, there were 84 billion UPI transactions, accounting to about Rs 139.09 trillion ($1.67 trillion). [32] Singapore, UAE, Nepal, Bhutan, France and Sri Lanka have also started adopting UPI after seeing its success in India. [33]

See also

Related Research Articles

<span class="mw-page-title-main">Mobile payment</span> Payment services via a mobile device

Mobile payment, also referred to as mobile money, mobile money transfer and mobile wallet, is any of various payment processing services operated under financial regulations and performed from or via a mobile device. Instead of paying with cash, cheque, or credit card, a consumer can use a payment app on a mobile device to pay for a wide range of services and digital or hard goods. Although the concept of using non-coin-based currency systems has a long history, it is only in the 21st century that the technology to support such systems has become widely available.

<span class="mw-page-title-main">EZ-Link</span> Contactless smart card used in Singapore

The EZ-Link card is a rechargeable contactless smart card and electronic money system that is primarily used as a payment method for public transport such as bus and rail lines in Singapore. A standard EZ-Link card is a credit-card-sized stored-value contact-less smart-card that comes in a variety of colours, as well as limited edition designs. It is sold by SimplyGo Pte Ltd, a merged entity of TransitLink and EZ-Link since 2024, a subsidiary of the Land Transport Authority (LTA), and can be used on travel modes across Singapore, including the Mass Rapid Transit (MRT), the Light Rail Transit (LRT), public buses which are operated by SBS Transit, SMRT Buses, Tower Transit Singapore and Go-Ahead Singapore, as well as the Sentosa Express.

<span class="mw-page-title-main">Touch 'n Go</span> Malaysian expressway smart card

Touch 'n Go is a contactless smart card system used for electronic payments in Malaysia. The system was introduced in 1997 and is widely used for toll payments on highways, public transportation, parking, and other services. The card is equipped with a radio-frequency identification (RFID) chip that allows users to make payments by simply tapping the card on a reader device. Touch 'n Go cards can be reloaded with funds either online or at designated reload kiosks. The system has become a popular and convenient way for Malaysians to make cashless transactions.

<span class="mw-page-title-main">NETS (company)</span> Singaporean electronic payment service provider

Network for Electronic Transfers, colloquially known as NETS, is a Singaporean electronic payment service provider. Founded in 1986 by a consortium of local banks, it aims to establish the debit network and drive the adoption of electronic payments in Singapore. It is owned by DBS Bank, OCBC Bank and United Overseas Bank (UOB).

<span class="mw-page-title-main">Alipay</span> Third-party mobile and online payment platform

Alipay is a third-party mobile and online payment platform, established in Hangzhou, China in February 2004 by Alibaba Group and its founder Jack Ma. In 2015, Alipay moved its headquarters to Pudong, Shanghai, although its parent company Ant Financial remains Hangzhou-based.

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<span class="mw-page-title-main">Paytm</span> Indian financial technology company

Paytm is an Indian multinational financial technology company, that specializes in digital payments and financial services, based in Noida, India. Paytm was founded in 2010 by Vijay Shekhar Sharma under One97 Communications. The company offers mobile payment services to consumers and enables merchants to receive payments through QR code payment, Soundbox, Android-based-payment terminal, and online payment gateway. In partnership with financial institutions, Paytm also offers financial services such as microcredit and buy now, pay later to its consumers and merchants.

<span class="mw-page-title-main">Samsung Pay</span> Mobile payment and digital wallet service

Samsung Pay is a mobile payment and digital wallet service, operated by the South Korean company Samsung Electronics. It lets users make payments using compatible smartphones and other Samsung-produced devices, accessed using the Samsung Wallet app.

<span class="mw-page-title-main">Unified Payments Interface</span> Indian instant payment system

Unified Payments Interface (UPI) is an Indian instant payment system as well as protocol developed by the National Payments Corporation of India (NPCI) in 2016. The interface facilitates inter-bank peer-to-peer (P2P) and person-to-merchant (P2M) transactions. It is used on mobile devices to instantly transfer funds between two bank accounts. The mobile number of the device is required to be registered with the bank. The UPI ID of the recipient can be used to transfer money. It runs as an open source application programming interface (API) on top of the Immediate Payment Service (IMPS), and is regulated by the Reserve Bank of India (RBI). Indian Banks started making their UPI-enabled apps available on Google Play on 25 August 2016.

BHIM is an Indian state-owned mobile payment app developed by the National Payments Corporation of India (NPCI), based on the Unified Payments Interface (UPI). Launched on 30 December 2016, it is intended to facilitate e-payments directly through banks and encourage cashless transactions. The application supports all Indian banks which use UPI, which is built over the Immediate Payment Service (IMPS) infrastructure and allows the user to instantly transfer money between 170 member banks of any two parties. It can be used on all mobile devices.

WeChat Pay, officially referred to as Weixin Pay in China, is a mobile payment and digital wallet service by WeChat based in China that allows users to make mobile payments and online transactions. As of March 2016, WeChat Pay had over 300 million users. WeChat Pay reached 1.133 billion active users in 2023. WeChat Pay's main competitor in China and the market leader in online payments is Alibaba Group's Alipay. Alibaba company founder Jack Ma considered the red envelope feature to be a "Pearl Harbor moment", as it began to erode Alipay's historic dominance in the online payments industry in China, especially in peer-to-peer money transfer. The success prompted Alibaba to launch its own version of virtual red envelopes in its competing Laiwang service. Other competitors, Baidu Wallet and Sina Weibo, also launched similar features.

<span class="mw-page-title-main">BharatQR</span> QR code payment system in India

BharatQR, developed by NPCI, Mastercard, and Visa, is an integrated payment system in India for mobile device. The system was launched in September 2016. It facilitates users to transfer their money from one source to another. The money transferred through BharatQR is received directly in the user's linked bank account. It provides a common interface between RuPay, Mastercard, Visa and American Express, and is interoperable with all the banks. Currently, BharatQR is supported on both Android and iOS devices.

<span class="mw-page-title-main">KakaoPay</span> Digital wallet service in South Korea

Kakao Pay (Korean: 카카오페이) is a mobile payment and digital wallet service by Kakao based in South Korea that allows users make mobile payments and online transactions. The service supports contactless payments using near-field communications and QR codes.

<span class="mw-page-title-main">Faster Payment System</span> Real-time gross settlement payment system in Hong Kong

Faster Payment System is a real-time gross settlement payment system in Hong Kong that connects traditional banks and electronic payment and digital wallet operators. Users are able to perform instant money transfer or make payment to merchants by using the recipient's phone number, e-mail or QR code that contains the user's numeric identifier. Using the "traditional way" of full name and account number to make interbank transfer is also allowed.

<span class="mw-page-title-main">Touch 'n Go eWallet</span> Malaysian e-wallet service

Touch 'n Go eWallet is a Malaysian digital wallet and online payment platform, established in Kuala Lumpur, Malaysia, in July 2017 as a joint venture between Touch 'n Go and Ant Financial. It allows users to make payments at over 280,000 merchant touch points via QR code; pay for tolls, street parking, payment on e-hailing, car-sharing apps or taxis via RFID or PayDirect; pay bills; top-up mobile prepaid; pay for purchases on e-commerce websites or apps; order food delivery; perform peer-to-peer money transfers; renew car insurance and purchase unique insurance plans; and purchase movie, bus, trains, and airline tickets.

vcash Defunct Malaysian e-wallet service

vcash was a Malaysian digital wallet and online payment platform established in Shah Alam in November 2017, by Digi Telecommunications, a subsidiary of Telenor Group. vcash allowed users to make payments in local stores via a QR code, pay bills, top-up prepaid mobile phones, and do P2P transfers. Despite being a Digi product, user registration and usage of this service was opened to both Digi and non-Digi customers. Its competitors were GrabPay, Touch 'n Go eWallet, and Axiata's Boost. On 1 November 2019, Digi announced they were discontinuing vcash on 30 November 2019, two years after its launch, which were attributed to stiff competition from competitors that provide rewards to their users to retain customers in their services.

<span class="mw-page-title-main">UnionPay (application)</span> Mobile payment application

The app of UnionPay is a mobile and online payment service, developed and operated by UnionPay, the national Chinese bank card clearing service. Launched in 2017, it was designed to compete with the existing third-party Chinese mobile payment platforms, Alibaba Group's Alipay and Tencent's WeChat Pay. The mobile app allows the user to add their UnionPay bank card, and use it for various types of online and mobile payments, including in-app online payments, QR code payments, as well as contactless payments on NFC-enabled devices using UnionPay's QuickPass feature.

Quick Response Code Indonesia Standard is an Indonesian QR code standard developed by Bank Indonesia (BI) and Indonesian Payment System Association for cashless payments in Indonesia.

<span class="mw-page-title-main">Samsung Wallet</span> Digital wallet platform by Samsung

Samsung Wallet is a digital wallet platform developed by Samsung. It is available for the Samsung Galaxy-exclusive One UI Android operating system, and was announced on February 9, 2022, at the February 2022 Samsung Unpacked event. It combines both Samsung Pay and Samsung Pass.

Google Pay, also known as GPay, is a mobile payments application developed by Google. It has been rolled out in India and Singapore.

References

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  2. ↑ "China begins regulating QR code payments". 28 December 2017.
  3. 1 2 3 "How QR codes are changing e-commerce". 19 October 2017.
  4. ↑ 2D Barcodes – Japan's Top Inventions | NHK WORLD-JAPAN On Demand , retrieved 2020-06-23
  5. ↑ Andreas Schildbach (August 6, 2012), Google Playstore: Bitcoin Wallet, archived from the original on 2012-08-06
  6. ↑ "A Hangzhou Story: The Development of China's Mobile Payment Revolution" (PDF).
  7. ↑ Derrick A Paulo (October 29, 2017). "WeChat phenomenon: How a messaging app helped spark China's cashless revolution".
  8. ↑ "Payment methods in China: How China became a mobile-first nation". daxueconsulting.com. Retrieved 2020-06-23.
  9. ↑ "Cashless is King – Era of Mobile Payments |". chiculture.org.hk. Retrieved 2020-06-23.
  10. ↑ Pavlíček, Michal; Pultzner, Martin (2012-11-27). "Mobilní aplikace eKonto od Raiffeisenbank nabízí unikátní funkce". mobilenet.cz (in Czech). Retrieved 2024-01-28.
  11. ↑ Linc, Ondřej (2012-10-18). "Fotkou z mobilu zaplatíte během vteřiny, novinka mění i bankomaty". Lidovky.cz (in Czech). Retrieved 2024-01-28.
  12. ↑ "Standard No. 26: Format for exchanging the payment information for Czech domestic payments using the QR codes". Czech Banking Association. January 2021.
  13. ↑ Derrick A Paulo (October 29, 2017). "WeChat phenomenon: How a messaging app helped spark China's cashless revolution".
  14. 1 2 "QR code payment use all around China" . Retrieved 2017-06-07.
  15. ↑ "What is BharatQR? System takes digital payments to next level; 8 FAQs answered". Financialexpress. Retrieved 11 May 2022.
  16. ↑ PayPal Holdings, Inc (May 19, 2020), PayPal Rolls Out QR Code Payments for a Touch Free Way to Buy and Sell In-Person
  17. ↑ "qvik Instant Payment System". Hungarin National Bank. Retrieved 3 Nov 2024.
  18. ↑ "Paytm introduces QR-based metro tickets for Mumbaikars". Business Today. 17 November 2017. Retrieved 17 November 2018.
  19. ↑ Station, RailTravel (2020-10-16). "KTM Komuter Northern Sector Online Ticket Booking Guide • KTMB Integrated Ticketing System (KITS) • Komuter Utara Online Ticket Booking • Tempah Tiket KTM Komuter Utara Atas Talian • RailTravel Station". RailTravel Station. Retrieved 2023-03-08.
  20. ↑ Station, RailTravel (2022-02-05). "Penang Fast Ferry from Butterworth Penang Sentral Pangkalan Sultan Abdul Halim (PSAH) to Penang Island Swettenham Pier Cruise Terminal (SPCT) by Ferry • RailTravel Station". RailTravel Station. Retrieved 2023-03-08.
  21. ↑ Hilario, Edgard (1 June 2023). "beep powers QR payment in LRT1". Manila Bulletin. Retrieved 15 April 2024.
  22. ↑ Yu, Lance Spencer (25 May 2023). "Here's how to use LRT1 QR tickets with Maya and ikotMNL". Rappler. Retrieved 15 April 2024.
  23. ↑ Nandru, Prabhakar; S.A., Senthil Kumar; Chendragiri, Madhavaiah (2023-01-01). "Adoption intention of mobile QR code payment system among marginalized street vendors: an empirical investigation from an emerging economy". Journal of Science and Technology Policy Management. ahead-of-print (ahead-of-print). doi:10.1108/JSTPM-03-2023-0035. ISSN   2053-4620.
  24. ↑ "Bloomberg – Soon, You Can Scan QR Codes to Pay For Your Southeast Asian Trip". Bloomberg. 14 July 2022. Retrieved 2022-07-26.
  25. ↑ "QRIS.id – Tentang QRIS". qris.id. Retrieved 2022-07-26.
  26. ↑ Salma, oleh Zahrah Firyal (2022-05-05). "10 Aplikasi yang Mendukung QRIS". InvestBro (in Indonesian). Retrieved 2022-07-26.
  27. 1 2 "DuitNow QR | Customer". www.duitnow.my. Retrieved 2022-07-26.
  28. ↑ "Singapore Introduces World's First Unified Payment QR Code – SGQR". www.mas.gov.sg. Retrieved 2022-07-26.
  29. ↑ "Singapore Quick Response Code (SGQR)". www.mas.gov.sg. Retrieved 2022-07-26.
  30. ↑ "QR Ph FAQs" (PDF).
  31. ↑ "THE HISTORY OF UPI" (PDF). International Journal of Creative Research Thoughts (IJCRT).
  32. ↑ www.ETBFSI.com. "UPI transactions at record high, clocks 9.4 bln in May'23 – ET BFSI". ETBFSI.com. Retrieved 2023-12-04.
  33. ↑ "India's UPI to now work in one more country". The Times of India. 2023-07-21. ISSN   0971-8257 . Retrieved 2023-12-04.
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