Brazil is leading the way in the adoption of QR code payments, with over 2 billion instant payment transactions initiated through QR codes each month in the country. These QR codes are used for in-store and online checkout, as well as bill payments. The Central Bank of Brazil developed a standard for QR code payments, creating a network effect where customers could pay through any bank at any business. This has made it easy for both consumers and merchants to adopt QR code payments.
In Brazil, both merchant presented mode and consumer presented mode QR codes are used for payments. Merchant presented mode QR codes are scanned by consumers from an authenticated mobile app, while consumer presented mode QR codes are scanned by merchants. Payments are processed quickly and securely, with all necessary information encoded in the QR code. This has made QR code payments a popular choice for merchants and billers in Brazil, as it is less expensive to process than credit card transactions.
The speed of payments in the United States lags behind many other countries, with only 30 million instant payments happening each month compared to over 12 billion in India and 5 billion in Brazil. As more financial institutions in the U.S. offer instant payment schemes such as RTP and FedNow, QR codes are expected to play a key role in driving adoption among billers and merchants. By implementing a QR code standard in the U.S., closed-loop systems currently in place can be turned into open loops, enabling QR code payments for all everyday transactions.
Carlos Netto, the Co-founder and CEO of Matera, a software company in Brazil, emphasizes the importance of QR codes in the payment industry. QR codes are widely used for various purposes, such as providing product information, promotional codes, or menus. In the context of payments, QR codes are a secure technology that allows for quick and efficient transactions without the need to share financial account details. While there are challenges such as potential fraud and friction in using QR codes for payments, their convenience and security make them a popular choice in Brazil.
Brazilian consumers are accustomed to using QR codes for payments, with large retailers, e-commerce companies, mobile operators, and other verticals accepting QR code payments. This method allows for instant payment processing, with consumers simply scanning a QR code with their mobile phone to complete a transaction. The standardized use of QR codes for payments in Brazil has created a seamless experience for both consumers and merchants, leading to widespread adoption of this technology.
For those looking to implement QR code payments in the U.S., starting with a closed-loop environment where both consumers and merchants have accounts at the same financial institution is recommended. By creating a network of QR code payments within specific ecosystems such as universities, students and merchants can easily transact using QR codes through a single financial institution’s mobile app. As the adoption of instant payment schemes grows in the U.S., QR codes are expected to become a prominent solution for driving adoption among businesses and consumers alike.
