Juniper Research says that it defines a QR code payment as a form of contactless payment that allows a transfer to be performed by simply scanning a code.
The research report from Juniper Research explained that this definition encompasses both merchant-presented mode (MPM) and consumer-presented mode (CPM) transactions.
There are two primary forms of QR code payments:
- Merchant-presented mode (MPM): In this mode, the merchant displays a QR code that is scanned by the customer’s device to initiate a purchase.
- Consumer-presented mode (CPM): This method involves the customer presenting a generated QR code on their device, which is then scanned by the merchant.
QR code payments are primarily used for in-store retail purchases, facilitating contactless transactions.
However, they also have utility in eCommerce, ticketing, and transport.
Digital wallets and payments providers often encourage the use of QR codes, while government schemes in several countries provide a centralized platform for payment services and digital wallets.
The regions with the highest potential for QR code payments are anticipated to include:
- Latin America: Standardization of QR code payments is spreading throughout the region, making the payment process easier.
- MENA Region: QR codes are becoming the preferred contactless payment option for individuals, businesses, and governments alike. 3.
- Indian Subcontinent: India’s digital payments economy relies heavily on QR codes, resulting in the second-highest rate of QR code payments worldwide.
Juniper Research forecasts that the value of QR code payments will grow by 50% globally, reaching $5.4 trillion in 2025.
Key factors driving this growth include:
- Standardization of national QR schemes and account-to-account (A2A) payment initiatives.
- Increased competition from Apple’s opening up of third-party NFC access, which will impact iOS-dominated markets.
Advantages of QR Code Payments QR code payments hold distinct advantages over NFC technology, including:
- Lower operational costs: QR code infrastructure is cheaper and more accessible than traditional point-of-sale technology.
- Universal compatibility: QR codes can be read by any smartphone camera, making them a versatile solution for businesses and consumers.
To capitalize on the growth of QR code payments, vendors must:
- Tailor their offerings for smaller businesses, which will drive financial inclusion.
- Emphasize the low implementation costs of QR code payments, which is a compelling differentiator over NFC payments, especially for merchants operating in developing markets.
