The QR Code Revival

The Covid-19 pandemic has brought the QR code back to life. Once it was a growing trend, but then usage seemed to fall away almost overnight. Now, it has reappeared on restaurant tables to avoid customers touching a menu and potentially spreading the virus.

But it is not the only way in which the QR code has returned. It has resurfaced as the payment mechanism of choice for Paypal, Venmo, Square and others in the USA.

The QR code started out as a sophisticated barcode for tracking parts, but it had other uses, and in 2011 Alipay introduced it for payments. Alipay has 1.3 billion users across China and Asia, giving you an idea of its market share.

Over the last decade, China and India have seen huge increases in population size as well as aggressive growth in Internet availability and smartphone usage. These factors have created an opportunity for mobile payments where the merchant didn’t have to invest in hardware: the customer simply used their phone. The QR code played a major role in this, and emerged as the defacto payment mechanism due to its ease of implementation by the merchant. For example, in China, Alipay and WeChat QR codes can be found on every food stall, checkout lane, restaurant table, and public transportation service in the country.

In the USA, a joint venture of merchants including 7-Eleven, Best Buy, CVS, Target, and Walmart called the Merchant Customer Exchange (MCX) with its digital wallet called CurrentC seemingly brought the QR back to prominence. However, it never really took off, and Chase bought MCX, relaunching it as ChasePay

One of the key issues with QR codes for payments is that QR codes are typically less secure, but the 2017 introduction of an EMVCo specification for QR code payments was a significant step towards standardizing the code and making it more secure.

In the last six months we have seen a new focus on QR codes across the ecosystem, including that by PayPal. It was followed by Square. Then Venmo, a PayPal subsidiary released a new Credit Card that made the code a key part of the product – they printed a QR code on the physical card.

As the QR code makes its appearance in other situations, such as the aforementioned restaurants etc, it seems like perfect timing for it to also have a role in mobile payments.

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