The QR Code Is Back From the Dead

Image credit: iStockphoto/ktsimage

Three years ago, analysts were almost writing off QR codes as an “also ran” technology.

Many industry pundits expected Quick Response code developed in the last years of the previous century to become almost ubiquitous due to its ease in connecting the physical and the digital worlds. But, by 2017 or so, its adoption had slowed.

Other technologies, such as NFC, were considered more effective. It seemed that the QR code would go the way of many other innovations: a good idea which faded out because people had no real compelling reason to use it.

The pandemic resurgence

Among all the changes the COVID-19 disruptions have brought to our lives has been a resurgence in using QR codes, chosen because they are non-contact.

In the Australian state of New South Wales, where I live, the government has made the use of QR codes in shops, cafes, and restaurants compulsory from this week as part of its COVID contact tracing program. Scanning a QR code has become a common action as checking the messages on your phone.

Services NSW, the Government agency, has developed a reputation in the last few years as a leading technology adopter. Its app is spreading in use, mainly because it recognizes users each time the code is scanned rather than having to enter details repeatedly.

NSW isn’t the only place where this is happening. QR codes are already widely used in China. President Xi Jinping has proposed a global QR code system to enable people’s cross-border movement during the pandemic.

Addressing the G20 meeting over the weekend, Xi advocated using QR codes for the mutual recognition of health certificates to “establish fast tracks to facilitate the orderly flow of people.”

The looming privacy crisis

In Australia, there has been the inevitable pushback on the privacy issue. In response, the Office of the Australian Information Commission (OAIC) has released a draft code on how providers should capture and store the data collected when patrons use a QR code check-in system.

The essential suggestions are that the personal information collected should only be used for contract tracing purposes, securely stored, and then deleted after 30 days.

For businesses, this would seem like a golden opportunity squandered. Imagine having access to the emails and contacts of every person who came into your retail industry in the last month. The database possibilities and marketing potential are mind-boggling.

As it is, there are concerns the private providers offering QR check-in services are selling off the data to third parties.

In Australia, small businesses with an annual turnover of less than AUD 3 million are not covered under the Privacy Act. There are hundreds if not thousands of these businesses in NSW which will be collecting private information from people this week as QR codes go compulsory.

Cashing in on payment

Beyond privacy, QR codes’ resurgence is likely to be felt in the payments sector’s longer term.

QR payments are already ubiquitous in China, where an estimated two-thirds of all payments on the Alipay platform — which totals USD 1.7 trillion a year — are done through QR.

The payment method hasn’t taken off in the rest of the world, but that could be about to change.

According to a recent survey of 4,000 American and Canadian households by the Mercator Advisory Group, QR codes were used by only 13% of respondents before the pandemic.

The number of users has grown by another 11% since May, and with the non-contact system now entrenched for social distancing and contact tracing, the momentum could create a tipping point.

For example, PayPal announced that QR code payments would be made available through its app in 28 markets, making it easier for 25 million merchants to accept QR payments without additional hardware costs.

UberEats has also introduced QR payments because they eliminate paper bills and signatures.

One reason that QR cards haven’t been embraced in the payments industries in countries like the U.S. or Australia has been the high penetration of credit cards. In comparison, credit card use in China is much lower, which has given QR payments an opportunity.

Much has been written about the credit card’s demise in western economies, as “buy now pay later” schemes take over and consumers rebel against the high interest on cards.

This could create more space for QR payments to gain momentum.

Will QR code time be short?

There is no question that Australians have become comfortable with scanning QR codes in the last six months due to COVID-19. Reaching for your phone and doing a scan is now as natural as opening the door at the venue.

It could be that this familiarity with the technology will spawn new applications going forward, with marketing strategists and loyalty schemes pondering how it can play into their operations.

Because of COVID-19, QR codes are a technology whose time has come now.

It will be interesting to see if it is the technology for this particular moment in time or if resurgent QR codes are a technology that will take us into the future.

Image credit: iStockphoto/ktsimage