EXCLUSIVE— Will the popularity of the QR code in China eventually make its way to the United States, the United Kingdom, and other Western markets? It could, with a little push from Alipay.
The mobile payment service, which uses QR codes at the point-of-sale, has been increasing its partnerships with U.S., U.K., and European merchants to keep serving its large base of Chinese users, such as its recent expansion with fintech payments company Adyen.
The expansion was announced this week, and makes Alipay a method of payment at all Adyen merchants. This, alongside some of Alipay’s other partnerships, also effectively means that more and more merchants and services are adopting the capability to accept QR codes for payments.
“The customer will go to the [Ayden] store, they will see that the store accepts Alipay, there will be a QR code generated, and then the cashier will scan that code. It’s no different to what [the consumer] does in China,” Souheil Badran, president of Alipay, Americas, told Bank Innovation. “This is something that 520 million Chinese consumers do everyday.”
That familiarity offers quite an opportunity for foreign merchants willing to accept Alipay (and QR codes) in their stores, said Badran, especially given the spending power of Chinese tourists, who spend approximately $300 billion abroad every year.
The timing of the company’s Adyen expansion, announced this week, is no coincidence: this also happens to be “Golden Week,” a seven day holiday in China where many choose to take vacations abroad.
All of this means that for foreign merchants, there are plenty of benefits and few downsides to accept QR codes, especially if a payment provider such as Adyen is integrating the QR reader into their POS terminals anyway. For Adyen merchants, Alipay will simply appear on the screen as a payment option next to others like Mastercard and Visa, resulting in almost zero work for that merchant. The company serves about 4,500 businesses across the globe.
Integrating QR acceptance into a POS system is also a lot easier than integrating another method like NFC, at least according to Robin Ghandi, SVP of acquiring and partnerships for Adyen.
“The benefit of a QR code is that it’s easy to deploy, because the consumer doesn’t need an NFC device and the merchant doesn’t need to have an NFC terminal,” Ghandi told Bank Innovation, adding that “a lot” of the growing acceptance of QR in the west is “being driven by the [Chinese] consumer.”
That’s not to say NFC won’t have its place, especially in geographies like the U.S. and the U.K.
“There was a time, when NFC had started, that people said QR is more of a stop-gap,” Ghandi said. “But what we’ll see is a mix of NFC and QR, with contactless payments and QR existing side by side.”