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Thursday, August 13, 2020

Green Sheet interviews Jennifer Sherman, NMI

Jennifer Sherman, senior vice president of product at NMI, recently shared with The Green Sheet her expertise on the nature and use of QR codes. In this interview, she discusses the advantages and disadvantages of QR codes, their growing use during the COVID-19 pandemic, challenges merchants have overcome to bring them online, and more.

Following is the full Q&A:

What’s your elevator-pitch style description of QR codes and how they work?

A QR code is a two-dimensional barcode that contains information, most often a link to an application or a website URL. This technology has existed for years, and in the U.S. we tend to think of it as older technology that never really took off. QR codes have recently enjoyed a resurgence due to the drive for contactless payments that has marked the gradual end of our COVID-19 shut downs.

What are their main advantages and disadvantages?

QR code has a wide range of advantages, starting with the fact that consumers don’t need to download an app or sign in to anything in order to use them. They simply use their camera app on their smartphone to scan the QR code, which then takes them to the website and gives consumers access to pay straight from their phones. This method creates a contactless payments experience without the need for a payment terminal and is a great solution for software vendors since a payment page can be designed to support use case specific payment flows. For example, in the restaurant industry, QR codes allow patrons to easily access menus, split checks and add tips when they get their bill. Additionally, QR codes can be applied to charitable donations, giving contributors the option to decide how much they want to give after quickly scanning the code on their phone.

As for disadvantages, any payments processed through the use of QR codes are considered card-not-present transactions. For the merchant, these transactions generally carry a slightly higher interchange rate because the risk of fraud is higher, but it’s important to note that this difference should be negligible for most transactions. Additionally, the use cases for QR codes aren’t one size fits all, and solution developers must think through the use case to determine what their end goal will be. Is this an invoice to be paid? A restaurant tab that customers may want to split? A farmer’s market stall with no time to generate a QR code for each customer being rung up? Each use case has its own flow to be built out, which can create additional steps in the implementation process.

What evidence do you have that QR codes are gaining momentum during the COVID-19 crisis?

QR codes have become the go-to method for creating contactless experiences that limit the interactions humans have with each other as businesses continue to reopen. We first saw them pop up in restaurants for patrons to easily access menus right on their phones, and now we’re starting to see them expand into other industries such as retail and transit and also rolled out across industry leaders. For example, CVS recently announced initiatives to integrate PayPal and Venmo QR codes into its checkouts so customers can pay for their purchase without touching anything or signing a receipt.

What types of merchants have incorporated them into their payment acceptance mix? And what challenges have they overcome to bring them online?

Many merchants across a variety of industries have incorporated QR codes into their payment acceptance mix, such as restaurants, retailers, charities and even farmer’s markets. We haven’t seen it yet, but home services will likely be the next wave to incorporate QR codes into the mix. As for challenges, merchants shouldn’t feel like they have to spin up a QR code solution alone. They must lean on their payment provider and work with them to determine the best digital payment solution for the merchant’s specific use case. Payments aren’t a DIY project, and it’s crucial that merchants partner with the right payment provider to ensure they’re providing a seamless, sanitary payment experience that consumers’ demands nowadays.

How can more retailers and SMBs get in on the action of using QR codes?

Retailers and small businesses can easily generate QR codes with support from their payment solution providers. These codes enable them to create a contactless payment experience without needing to install any additional software or hardware. Whatever route these retailers and SMBs decide to go in terms of QR code application, retailers and SMBs should rely on a trustworthy payment solution provider to show them a path to generating a QR code and ultimately accepting customer payments.

Some consumers are reluctant to try new payment methods. How are merchants helping them with this?

Merchants are helping consumers who might be reluctant to try new payment methods by making these experiences as easy and seamless as possible. They are making them easily accessible as well by putting these QR codes in places where they make sense, like on a table at a restaurant. It’s also important for weary consumers to remember that this isn’t a new payment method, it’s simply a new path to get to the payment page of your favorite restaurants and retailers.

Are there generational divides when it comes to consumer use of QR codes? How are these being addressed?

Older generations may not be as familiar with QR codes, but a simple set of instructions can help familiarize them with how they work and how their payments are ultimately processed. On the other hand, younger generations may think of QR codes as old school, but oftentimes things make a comeback, and in the case of QR codes, if it helps keep us safer, maybe its time has truly come again.

end of article

Editor's Note: If you want to participate in a Green Sheet Q&A on a compelling payments development or topic, please contact Laura McHale Holland, assistant vice president, editorial, at laura@greensheet.com.

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