The rise of QR codes

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BY VICTOR ADAR

Quick Response Codes, popular as QR, are basically symbols which can be scanned using a Smartphone to reveal certain information or basically to direct a user to a web page. They are a type of barcode that is able to store a lot of information – it is more of an upgrade of the barcode technology. One can scan by simply holding a Smartphone over a code and pressing a button used when taking pictures. Use and creation of these codes started in earnest in the 1990s in Japan. But why is it catching on now? Is it about to become a factor in payment platforms? Compared to the usual barcodes, QR codes guarantee large storage capacity, increased functionality and even accuracy, and was designed to be scanned by a Smartphone. It seems there is more to QR codes, so much that a majority of companies wish to embrace it. And CompuLynx appears set to leverage on the so-called QR codes enabled payment platform, a move that will boost its real-time cross-border transactions. The company has partnered with China’s XH Smart Technology to roll out payment technologies for instant card issuance, EMV cards and QR code enabled payment systems in the region.

According to Saliesh Savani, CEO and founder of CompuLynx, the partnership with XH-Smart Tech will see financial services providers integrate their payment platforms with new platform enabling them to enjoy bank-to-merchants’ linkages where payments for goods purchased at the large retail shops will be done directly from their bank accounts.

“Our target market for this solution is B2C where large retail banks with retail customers will be able to use the solution to make it a seamless transaction process for the customers,” says0 Savani, adding that CompuLynx, with operations across East Africa and the United Arab Emirates serving 400 companies in 36 countries, will become XH Smart Tech’s local partner.

“Banks can now complement their digital security with QR code-enabled payments and through our partnership, leapfrog the most advanced payment technologies utilizing existing infrastructure without the transitional phases and accompanied costs,” he said.

This partnership is a reminder of how having a local presence and understanding of local market provides the much needed guidance and continued support to financial institutions that is vital for growth. Jack Chen, managing director XH Smart Tech said that the partnership will introduce new globally accredited technologies in Kenya and further enhancements to customer experience and convenience. He said that QR code enabled payments technology comes with several benefits for the customers.

Banks, for example, already have their own apps. A lot of times, what happens is, the new technology is just embedded on already existing system. A financial institution can target a service provider, and include services that that particular provider offers so that when their app is visited, one is able to do more. With Barclays’ (Timiza) app for instance, users are able to book a taxi (Little cab), and their Timiza account debited automatically after the trip.

A restaurant too can link its discount codes to QR code thus giving customers a chance to purchase an item online. By including links to what is on promotion, say buy two of x flavour and get the third one free, customers can end up buying. This can in turn enable them to get their own customers. If a customer is satisfied with the services of Little Cab through Timiza app, chances are that he or she will get hooked. Clearly, QR codes can push up sales. But will it catalyse adoption of digital financial services or, as time goes by it will coil and die as new innovations in merchant payments come up?

Globally, Mastercard and Visa has specifications, which support QR code based payment platforms. In Africa, Ecobank embraces QR codes in countries where it operates. Vodacom too, added QR codes to its USSD for “Lipa na mPesa” payments product in Tanzania.

The new technologies will enable East Africa’s financial service providers  to access secure digital and card solutions that will reduce transaction costs and time to market, provide better protection of customers’ data, increase financial inclusion and generate more revenue for banks.