The time has come for a single QR code for all payments in the world.

Nov 8
The Singapore experiment demonstrates that it is feasible to integrate many closed-loop applications and wallets into a single, shared infrastructure.

Quick response, or QR, is a two-dimensional bar code that was created by Denso Wave Inc.'s Masahiro Hara. Hara never dreamed that his car parts labeling system would one day become a vital component of financial transactions.

Beginning with China's Alipay and WeChat 12 years ago, this innovation has become the favored method of contactless money transmission in Asia and Latin America.

More than 200 million individuals use the 80 e-wallets that are available in Southeast Asia alone. The primary winners were customers who previously lacked access to bank accounts and small businesses that could not afford pricey credit card terminals and excessive fees.

The integration of diverse applications is the next crucial element, which will eventually allow a single QR code to function globally.

The Pix QR in Brazil, the UPI QR in India, the QRIS in Indonesia, the QR Ph in the Philippines, and the SGQR in Singapore are all effective illustrations of the fundamental concept that a retailer does not have to show several barcodes to take payments from various sources. Every wallet and consumer application must work with the same picture.

For the benefit of 18 million intra-regional travelers who spend roughly $19 billion a year, the main economies in the Association of Southeast Asian Nations—Indonesia, Malaysia, Singapore, Thailand, Vietnam, and the Philippines—combine their QRs.

According to Boston Consulting Group, QR will generate $4 billion in consumer spending and serve as an inspiration for the rest of the globe if ASEAN can get 15% to 20% of transactions.

There's going to be a lot of effort. The issue of many contractual connections, each with its accounting, is not necessarily resolved by combining tags in a single repository.
For instance, before they may accept Alipay, GrabPay, NETS, ShopeePay, and UnionPay, among other payment methods, Singaporean retailers that show a generic QR code must first separately register with each of these payment methods.

But the city-state is putting a fresh tactic to the test this month. Retailers will just need to sign one agreement with SGQR+, an enhanced version of standard QR, to accept payments from any of the 23 partner wallets and apps.

As a result, the family business will have to manage a single set of accounts that will combine transfers made through well-known local platforms, including Indonesia's DuitNow, Thailand's PromptPay, China's Alipay, WeChat, and UnionPay, and Malaysia.
Through XNAP, a cross-border network, Visa Inc. and Mastercard Inc., who have already provided their QR code alternatives for the previous six to seven years, will join, and Google Pay will follow suit. Trader payment for the following day is promised in one of the two pilot episodes.

Policymakers in North America and Europe ought to keep a close eye on this experiment. Since their customers' need for contactless payments is now adequately met by near-field communications, the technology that allows for the wireless movement of data and money between nearby devices, they have not given QR enough attention up to this point.

NFC is widely used in Singapore, a more developed payments industry, where credit and debit cards were used for 57% of retail transactions in the financial center last year, according to an EY-Parthenon report.

Eighteen percent of users of digital wallets said they would rather pay via speedier means, including NFC-enabled cards stored in Apple Pay than scan QR codes 97% of the time.

Singapore's 72% annual increase over the previous five years, rather than its pitiful 3% share of digital wallet transactions, is the reason the country is still committed to improving QR code-based payments.

A prosperous SGQR+ might serve as the foundation for an international project, the ultimate aim of which would be a wide-open loop that would allow even the tiniest companies to accept payments from any client, domestic or foreign. Visitors from other countries will continue to use their regular apps and accrue loyalty points.

Because Denso Wave barcodes effectively pack a large amount of data into tiny black-and-white squares, they are unlikely to be the last word in the exchange of monetary value, but their full potential will only be realized when one QR code is sufficient for all the world's payments.

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