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Are All QR Codes Created Equal?

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(Posted on Aug 19, 2014 at 05:06AM by William Cosgrove)
The QR code has had a rocky road over the past two decades. Initially developed for the automotive industry in Japan in 1994, a QR code – or quick response code – is an optic label that contains information about the item to which it is attached, and can be read by machines. It has become widely popular outside its original intended use due to its fast readability. QR codes can also contain more information than the standard barcodes used on most products.

In South Africa, QR codes have been heralded as the next great marketing tool, accused of being an overly complex piece of technology that no one wants to use, and dismissed as an unsightly and impractical addition to marketing collateral that adds little value to the marketer’s campaign or the customer’s experience thereof.

For the most part, you only really found QR codes on print advertisements and billboards in South Africa. Marketers used them as a way of drawing consumers away from printed material into a digital experience, but all too often these experiences were little more than mini-websites that were bizarrely not optimised for mobile phones. People got tired of being taken to poor digital experiences, and stopped using QR codes. Marketers soon abandoned them. Even in the US, in technologically advanced cities like San Francisco, only 11% of consumers even knew what a QR code was – and this was in 2011!

A sudden (worldwide) explosion

Over the past few months, however, you will have noticed QR codes springing up everywhere as newly launched mobile payment services gain traction among consumers. Snapscan is the most famous example and can be found at any of more than 10 000 stores and merchants countrywide, but any recent dining experience would also have exposed you to Zapper, while a trip to a vida e caffe for your morning latte would have introduced you to FlickPay. QR codes, it seems, are suddenly everywhere.

The 2014 Nielsen Mobile Wallet Report, which sourced data from nearly 4000 smartphone users who have used their phone or tablet for mobile shopping, paying or banking in the past 30 days, showed that consumers are quite comfortable with QR code based payments.

Interestingly, less than a third would pay for goods by scanning a QR code at a store, while nearly half of all respondents were comfortable to do it the other way around: by presenting a QR code on the device’s screen for the cashier to scan. This type of mobile payment is also by far the most popular, currently beating out NFC (as found in Google Wallet and Isis) and the Square model of payments, where a device is attached to a smartphone to enable credit card transactions (as Absa’s Payment Pebble and Emerge Mobile’s iKhokha do locally).

Quick maturation is the key to lasting success

So are QR codes here to stay? It all depends. QR codes can present some serious security issues that need to be addressed if they are to survive in the long term. Think about it: by scanning the code with your phone, you automatically initiate a process that could be anything. That static printed QR code at the organic farmer’s market? You might think that you’re just quickly paying for your organic free-range eggs, but a criminal may have pasted his own code over the merchant’s and all your sensitive password and mobile banking details could already be in the hands of a fraudster.

Turning the process on its head: QR codes generated ‘in-app’ on a consumer’s own handset that are then ‘read’ by a scanner at the till point actually offer an additional layer of security to the end-user, when compared to card payments in particular. Opportunities for manipulation of the code are eliminated by either the merchant or the consumer, and no personal information is handed over during the transaction.

Not only that – point-of-sale integration unlocks opportunities for additional ‘in-app’ QR code initiated services that can add even more value and convenience to the consumer’s life. Regular customer? Have a free coffee. Redeeming a coupon or voucher? Easy – just scan your QR code at the till point and enjoy the rewards.

The current generation of prevalent QR code based payment apps have created a thriving ecosystem of alternative payments that has opened consumers’ minds to the possibilities of a cashless future.

It is imperative that all stakeholders evolve their QR code -based apps and services to ensure consumers (and businesses) are as protected as possible, while still offering the most value in terms of convenience and experience. Anything less will put consumers off, and force the search for an alternative technology solution, which may take another 20 years to gain traction.

Image: Bauke Karel via Flickr.

Reposted from Memeburn