It’s a fintech example of everything old becoming new again. The QR code — a technology first used in 1994 by the Japanese automotive industry — will reign as one of this year’s top ten fintech trends as pandemic-era consumers continue to embrace contactless payment methods, Juniper Research says.
During a Feb. 2 webinar, Juniper Research analyst Nick Maynard said the U.S. will see a significant rise in use of QR payment methods in 2021. QR payments already are prevalent in China and India.
“The pandemic has drastically increased the need for simple cashless transactions,” Maynard said.
Indeed, a survey last year by PYMNTS.com and PayPal found a growing appetite among consumers for touchless digital payment methods, contactless cards and digital wallets. For merchants, especially small businesses, QR codes offer robust payment capabilities at a low cost, Maynard said.
A recent study by Juniper Research forecasts the number of global users of QR code payments will exceed 2.2 billion in 2025, up from 1.5 billion in 2020. The 2025 figure would represent nearly 30% of the world’s mobile phone users. Juniper Research estimates the global market for QR code payments will exceed $2.7 trillion in 2025.
A 2020 survey by Mercator Advisory Group showed 11% of Americans had tried QR code payments on their smartphones since the onset of the pandemic. Another 13% said they had been using QR code payments before the pandemic.
PayPal and PayPal-owned Venmo are propelling the rollout of QR code payments in the U.S. In November, they introduced QR code payment capabilities at more than 8,200 standalone CVS pharmacies across the country. CVS is the first national retailer to offer QR code payments through PayPal and Venmo.
If PayPal can build momentum from the CVS deal, “the prospects for QR payment growth in the market look pretty strong,” Maynard said. “PayPal is such a big force in e-commerce that if it can leverage that user base, it can scale QR code payments in ways that very few others can.”
At CVS, a customer can pay by opening either the PayPal or Venmo mobile app, then clicking the “scan” button and selecting the “show to pay” option. PayPal customers can pay with stored debit or credit cards, bank accounts, a PayPal balance or a PayPal credit line. With Venmo QR codes, customers can pay with stored debit or credit cards, bank accounts, a Venmo balance or a Venmo credit card. The customer pays no fees for using this payment method.
“In the midst of COVID-19, we have seen an incredible acceleration of digital payments and touch-free payments,” Mark Britto, executive vice president and chief product officer at PayPal, said in a news release last July. “Companies of all types and sizes are looking for ways to maintain the safety of their customers and employees, especially through touch-free experiences like curbside pickup and enhanced online shopping. QR codes complement these and provide retailers an additional payment method that furthers this touch-free mission and continues the growth of digital payments for all partners in the ecosystem.”
PayPal, Venmo and CVS aren’t the only emerging players in QR code payments in the U.S. Apple Pay is adding a payment feature to its digital wallet, and Uber Eats now enables dine-in customers to pay with by scanning a QR code.
Mobiletransaction.org says that a world dependent on “socially distanced payments” has boosted the use of QR codes in the U.S. and elsewhere.
“It is now a convenient and safe payment method that consumers are increasingly getting used to — especially at restaurants, cafés, bars and other hospitality venues,” according to Mobiletransaction.org.