During COVID-19, pulling out a smartphone and taking a picture of a QR code to enter a venue has been a necessary activity for millions of Australians. Soon, it could become a common way to pay.
Supermarket giants Coles and Woolworths, along with Commonwealth Bank and National Australia Bank, are supporting a new QR payments platform developed by eftpos.
The retailers like camera payments because they will be able to integrate rewards schemes with the payment, in contrast to the status quo, where Flybuys or other rewards cards or vouchers are presented separately to the payment card. This will allow them to improve the marketing of offers to customers.
For the banks, paying with a QR code will allow them to bring payments into their banking apps, driving customer usage and engagement.
This will help to wrest power back from Apple, whose Apple Pay wallet has been surging in popularity to make ‘tap and go’ payments, but at a cost to the banks – because Apple has forced them to give up some of their interchange fee revenue. Unlike Apple, there will be no charge to banks that issue cards for using the new eftpos service, which is known as eQR.
Adding payment and rewards functionality directly into retailing, banking or fintech apps will let companies hold on to the customer after they have checked out with goods, rather than sending them out to the Apple or Google wallets to finish a transaction, or have customers fish around in a physical wallet for a card and type a long number into an internet shopping site.
Coles general manager of financial services Paul Askew said eQR would “improve the customer experience when making a payment in our stores and linking this to other functions such as loyalty”.
Paul Monnington, managing director of Woolworths Wpay, its payment processing platform, also said QR codes would allow it to combine payments and rewards in one transaction. “Now is the perfect time to introduce QR, and we look forward to building the next generation of seamless payment experiences with eftpos in the months ahead,” he added.
CBA and NAB will start to offer eQR to their merchant customers by enabling their payment terminals to serve up a QR code. At a self-service supermarket kiosk, codes could be provided on the screen displaying the shopping items, doing away with the need to provide so many payment terminals.
Other banks and retailers, including in the fast food industry, are expected to jump on board. Eftpos is also partnering with three fintechs: Merchant Warrior, an online payment gateway; Azupay, which is developing software for the ‘new payments platform’; and Beem It, a consumer app with 1.5 million users that eftpos bought in 2020.
Beem It has been developing the QR technology and its CEO Mark Britt said it would use eQR to work with fintechs and merchants to enhance digital commerce. Beem It was initially created by Commonwealth Bank to develop alternative payment technology.
CBA has been protesting against Apple for restricting bank apps from accessing ‘tap and go’ payments unless fees are paid to Apple, an issue now under investigation from the ACCC. QR code payments will become an alternative way to enable the CBA app to make payments if it cannot access the iPhone near-field communication (NFC) chip.
CBA general manager of merchant solutions, Karen Last, said business customers have become increasingly familiar using QR codes during the pandemic the bank will support the roll-out of eQR.
“We’re looking forward to working together to bring this capability to our merchants in the future,” she said.
eQR is agnostic to the payment rail, and eftpos says it will work with credit cards, and debit cards, that run on the Visa and Mastercard networks.
However, in contrast to payments using Apple Pay that default to the international networks, when a dual network card is linked to eQR, the default network will be eftpos.
This could help some merchants reduce payment costs by providing ‘least cost routing’, which the Reserve Bank and government want banks to implement.
The involvement of Azupay points to QR photos also being used to facilitate payments directly between bank accounts using the NPP, the real-time payment system.