QR codes are nothing new. They’ve been around since the mid-90s, used in everything from consumer advertising to public signs to movie tickets. Essentially, a QR code (short for Quick Response) is a machine-readable optical label that contains information about the item to which it is attached. In everyday life, we recognize it as that little square blocky thing we photograph with our smart phones to take us to a specified web page or app.
QR codes may be finding their way to your mobile payments experience soon. EMVco – the organization responsible for the standards around EMV chip cards – recently released specifications for QR code-based mobile payments, both merchant-presented and customer-presented. There are several benefits to using QR codes for mobile purchasing:
- It’s insanely simple. The consumer only needs a camera and an application.
- The infrastructure is already in place. Nearly every make and model of smart phone recognizes QR codes and, thus, can accommodate QR-based payments.
- The security protocols will surely be similar to EMV, invoking encryption, tokenization and dynamic transactions.
- QR codes are form-fitted for transactions. They’re capable of holding 100 times the information found on the bar-codes printed on consumer packaged goods – more than enough data to initiate a payment on any network.
In the Merchant-Presented model, the transaction flow is similar to EMV contactless payments using NFC. The difference, however, is that instead of the tapping or waving the device, the QR code is presented on the phone to the merchant. The code is read by an optical reader at checkout and the payment information is then sent to the acquirer.
In the Consumer-Presented model, the consumer uses her phone to read the QR code at the merchant site (at the merchandise display area or point of sale) to initiate a purchase or batch of purchases. Then transaction data is sent to the issuing back.
EMVco is already in the process of deploying a testing framework for QR-enabled transactions, another option for seamless payments driven by technology solutions.