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QR Code payments gaining popularity across India, South East Asia

QR Codes could be the next big thing in the digital payments space and Asian banks and FinTechs are already banking on it. Thailand’s oldest bank Siam Commercial Bank (SCB) has partnered with blockchain technology and digital asset firm Ripple to create a QR code enabled low-cost cross-border payment mechanism.

Developed in Japan Developed in Japan in the mid-nineties, QR (Quick Response) code payment is a contactless payment method where payment is performed by scanning a code, containing thousands of alphanumeric characters, for facilitating payment.

In a blog dated January 8, 2020, Ripple mentioned that it has partnered with SCB to help bring the company into a digital age and provide a cross-border payment facility to the latter’s over 16 million customers.

The US-based technology company, which provides a real-time gross settlement system, currency exchange, and remittance network, would create a mobile application called SCB Easy that would help customers carry out instant and low-cost cross-border payments.

SCB – Siam Commercial BankThe 112-year-old bank’s SVP of Commercial Banking, Arthit Sriumporn, stated in the blog that, “It is so difficult to send and receive money today. People must physically go to a bank branch, fill out long and complicated forms and wait for payments to be received—with no transparency. With our service, their loved ones from abroad can transfer payment and receive money immediately.”

Sriumporn further added that the cross-border payments could be now carried out on through the help of simple QR codes and Ripple is building EMVCo QR payments, through which the customers can send or receive money from across the globe and also can use it to make micro-payments within the country.

“QR payments are a popular payment method across Southeast Asia, but are typically only used within the local areas…  Imagine you are a tourist coming to Thailand, and you can use your home country mobile application to scan for payment and eliminate the need to exchange for local currency. You can use your mobile app, scan the QR payment and receive goods right away,” he said adding a survey that while a staggering 86% of the population in China use mobile payment apps, in Thailand, it’s 67% of the population.

In India, which is Asia’s third-largest economy, QR payments are also gaining traction after the demonetization in 2016. It started picking up after NPCI, a government-backed umbrella organization for all kinds of payments, introduced Bharat QR Code for making digital payments in 2017.

Vishal Anand Kanvaty, SVP – Innovation & Product, NPCI has mentioned in a blog that QR codes are gaining popularity in modern payment apps and devices as it incurs no cost for a merchant compared to installing a PoS machine for $214 thus reducing the entry barrier to acquiring merchants at a low cost. Besides, it is efficient as it reduces errors in any transaction related data input. Almost all the digital payment apps have launched QR payments and are currently interoperable, which means a person using a particular mobile wallet can scan the QR code of any other payment wallet.

One of the leading players in the space is Alibaba-backed Paytm. The company had on January 8 released a consolidated QR payment app for making all kinds of payments at zero cost.

Meanwhile, Chinese internet giant Tencent Holdings is working to integrate its QR code system for mobile payments with state-owned China UnionPay, according to reports. With the common QR code system, merchants could provide users of WeChat Pay – the mobile payment service within Tencent’s ubiquitous messaging and social media app WeChat – and UnionPay’s ‘Quickpass’ with the same code to make payments. Alibaba’s Alipay and Tencent’s WeChat Pay dominate China’s digital payment market at about 90 percent.

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