Recently, the Pakistan Ministry of Foreign Affairs launched the Quick Response (QR) Code for attesting documentation at its headquarters. This was done to digitalize the documentation process for the purposes of saving time, speeding-up verification procedures and ensuring safe and secure back-up of all records for future reference.

The beauty of the QR code technology is its versatility – it can be used for everything and anything across various businesses / industries and can benefit consumers and merchants in equal measures. Globally, QR codes are rapidly emerging and gaining acceptance as a universal form of payments. Payment technology players like Visa have already enabled the growth and adoption of merchant-presented QR code payments in 15 countries around the world, including Pakistan, through innovative mobile payments solutions (such as Visa on mobile).

So, what are QR code payments?

A QR code, also known as a Quick Response Code, is a 2-D (two dimensional) barcode. Designed as a pattern of black squares arranged in a square grid on a white background, QR codes can be read with an imaging device such as a Smartphone camera. QR code-based payment solutions let you send payments directly from your prepaid debit or credit card account to all kinds of merchants and businesses using just your Smartphone. That means if you see the QR sign at a merchant, you can just scan to pay – without having to use cash.

Soon to be released findings of a new Visa security survey reveal that 32% of respondents in Pakistan are aware of QR code payments and 18% have used it – of the respondents who have used it, 80% like the technology.

So, in Pakistan, Visa is working with its partners to bring the QR payment solution to more consumers. Recently, Visa collaborated with HBL to launch Visa on mobile, its QR-based mobile payments service that allows consumers to access their funds directly from their bank accounts via their mobile banking app to pay merchants or send money to individuals.

So, what makes it click with consumers and businesses?

Benefits of QR code payments:

1.       Security

QR code payments are digitally encrypted and require authentication and approval to be completed. That means no transaction can even be initiated unless both the customer and the merchant agree to it. In addition, there is no need for the customer to enter a PIN into the merchant’s machine, nor is it necessary to insert or swipe the device through the machine. Since the process eliminates the use of a cardor pin, and the payment information is not processed through the merchant’s store network, the potential for fraud is significantly reduced.

2.       Speed

QR codes works effectively for high traffic payment points where speed is of the essence and the merchant wants to be in control of the payment amount. One unique feature which the QR-based payment system provides is its ability to support more than one user at any given time. With the help of QR-based payments, several users can send payment instructions to the merchant concurrently, making the payment process effortless. The merchant only needs a device to confirm the payment from the user as a final step of the transaction. With the use of QR codes, customers can essentially save a great deal of their time by avoiding long queues and experiencing a hassle-free checkout.

3.       Cost effective

For merchants, the QR code is the quickest and most efficient way to tap into digital payments especially in developing markets like Pakistan, where Smartphone adoption is high and bankability is relatively low. Also, 90% of the businesses in Pakistan are either micro, small or medium enterprises, so QR codes are an ideal choice as they are quick to market and a low-cost option. Implementing a merchant QR code solution takes merely one sticker on a merchant countertop and a Smartphone and it can be implemented in minutes.

4.       Value-added insights

Creating the QR codes themselves doesn’t need to cost anything but they can add immense value, if utilized effectively. QR codes offer access to information in just a simple scan. Data obtained through these QR code transactions can help merchants better understand their business operations and customer needs at the touch of a button. This data will not only help improve business efficiency and cost effectiveness, it can also help win new customers through greater customer satisfaction.

5.       Convenience

Paying with QR codes helps users avoid carrying large amounts of money in a wallet or requiring them to have the correct change. In addition to convenience, users can also track their transactions made with QR codes via a mobile wallet.

QR codes’ potential in Pakistan:

If you consider two key factors: (i) Pakistan’s sizeable online population with about 59 million Smartphone users, and (ii) positive consumer perception - Visa’s survey reveals that 87 % of respondents felt QR code payments are secure upon initial exposure, and 79% intend to use the payment method in the near future ---- one can easily determine the immense potential that awaits QR code payments in Pakistan. While they may be in their infancy, all these favorable macroeconomic dynamics combined with a concerted push from merchants’ side through app-enabled loyalty programs and promotions, will encourage the faster adoption of QR code payments in Pakistan.

Moreover, the wider adoption of QR payments will also have a ripple effect on the growth of Pakistan’s eCommerce, retail, food and beverages industries with enhanced customer experience underpinning that growth. Therefore, the benefits associated with the implementation of QR code payments are multifaceted and so is their potential to accelerate the transition of Pakistan’s economy from cash to digital.