Member Exclusive, Payments

Contactless pay is here to stay: What about QR codes?

  • The use of QR codes is slowly growing in the US.
  • Their increased popularity may stick around even after the pandemic.

Email a Friend

Contactless pay is here to stay: What about QR codes?

Covid-19 has transformed consumer behavior. Cash is less common, cards are less shiny, and contactless pay is catching on. 

Since March 2019, the use of contactless pay in the US has increased by 150%, according to research by Visa. Amid this increase, QR codes are seeing a lift, too. 

Since the spread of Covid, QR codes have seen an 11% boost in new US users, according to Mercator’s 2020 survey.

This payment method was originally invented in Japan in the 90s to serve the automotive industry. It has spread since then. Nowadays, people scan QR codes to get information, visit a website, and make payments.

QR codes were popular before the pandemic as well, but mainly outside the US. In Asia, for example, 46% of e-commerce transactions in the region are done through digital wallets.

In the US, though, QR code usage has been historically low and slow in adoption. While the option to use them has been around for a while, people just haven’t shown much interest until now.

QR codes have had a history of mainly being used in the US for getting more information, downloading a new app, and occasionally for making a payment. And for the most part, QR codes were used through apps. Starbucks, for instance, allows you to make purchases through a pre-loaded Starbucks app. This involves a QR code. 

“I don't think there was tons of consumer interest in it, beyond applications like that,” said Jodie L. Kelley, CEO of the Electronic Transactions Association (ETA). “But with a pandemic, as with other methods of payments, that's changing.”

With social distancing a priority now, contactless payment methods are becoming more of a necessity. QR codes are one solution that stands out as easy to avoid physical contact and still get your shopping done.

“QR is a digital payment and acceptance solution that gives consumers a simple, secure way to pay and offers merchants another modality for accepting touch-free payments,” said a spokesperson at Mastercard.

The restaurant industry has really benefited from QR codes, said ETA’s Kelley.

Restaurants have been able to safely reopen by using QR codes. Instead of exchanging menus, or exchanging cash and cards, QR codes allow you to do all that on your mobile device, so that you can order, eat, and pay without having to touch anything but your phone. 

“People like it because you're not touching menus and you're not handing somebody your card, and having them hand it back,” said Kelley.

For certain restaurants, QR codes have proven themselves to be the best solution to ensuring as little touch as possible between customers and service providers.

“The reason we went to QR codes was to give the patrons a dining experience with as little contact [with another] human being as possible,” said Jamie Hickey, an employee at a steakhouse in Philadelphia. 

An added benefit has also been the newfound efficiency in providing service for customers and clearing tables.

“There were times in the summer when outdoor dining was very popular and we noticed that we were turning tables over faster than when things were being done in a more traditional manner,” said Hickey.


Rossotti’s Alpine Inn, a QSR based in California’s Bay Area, is another restaurant that’s been able to speed up service through the use of QR codes. The restaurant has been using a restaurant management platform called Toast that allows guests to order and pay for their meals through their mobile devices. Over 90% of Rossotti's on-premise dining volume is now being processed through QR codes. As a result, they’re generating over $100K a week. 

The inn found that using QR codes has made it easier to bring food to customers because the order is automatically identified with a specific table through the app.

But despite the benefits, there are still some obstacles that may keep QR codes from going mainstream. For one thing, QR codes may still be too costly for some merchants to consider.

“Most QR codes are POS-based, which requires out of pocket expenses from merchants in order to integrate with their POS systems,” said Steve Villegas, vp of payment partnerships for PPRO, a local payments platform for merchants.

There’s also the fact that spending behavior is sticky and credit cards are still overwhelmingly popular in the US. Consumers may simply not be ready yet to greet a new payment form.

“While QR codes are a strategy in reimagining service, improving guest retention and the bottom-line activation is everything, guests must see value to engage,” said Nadira Kalliecharan, digital solutions & digital transformation leader for travel & hospitality at Publicis Sapient.

If firms don’t implement QR codes well, with a sensitivity to the customer experience, they can risk positioning the payment option as one that’s not worth engaging with.

“The penalty arises when the execution falls short and this along with security may be one of the largest obstacles in the codes going mainstream,”  said Kalliecharan.

Then there’s the matter of human interaction. Right now, less interaction is seen as an upside, but this may change when the effects of Covid start to fade. People going to restaurants, for example, may look for the ‘classic’ dining experience they were able to get before the pandemic. 

“Food isn’t one size fits all -- QR codes limit the interaction between server and patron,” said Hickey.

But even with these obstacles, it seems that for now, at least, QR codes are catching on. And the new and varied ways they’re being used could help them stick around as a viable payment method even after the pandemic.

Venmo and PayPal, for example, recently launched credit cards with QR codes printed on each for contactless B2C and P2P purchases. Apple Pay is also planning for an iOS update that will allow for QR functionality. 

As for retailers, CVS is now the first store to launch QR code payments in over 8,000 locations.

Restaurants may also remain interested in QR codes. Even with the lacking human interaction it might bring, the resulting efficiency of the payment method in providing service might make the sacrifice worth it. As long as the food’s good and the service is quick, people might be willing to forgo opening a physical menu or getting recommendations directly from a server.

“The guest doesn't have to disrupt their conversation, go stand in what could be a pretty long line to get a beer, and then go back to the table,” said Michelle Monterossa Qadri, regional manager & operating partner at Rossotti’s Alpine Inn. “They're more apt to order another beer because it comes quickly.”

And one more place QR codes may shine particularly well in is room service, said Publicis Sapient’s Kalliecharan. QR codes could allow guests to browse spa options and order food without having to pick up the phone. The payment option could also be a great source of data for hotels looking to appeal to new guests.

“For hotels, driving the guest to an online channel increases efficiency in up-selling and provides promotion opportunities to drive engagement, all while allowing the hotels to collect valuable guest data.” said Kalliecharan. 

And of course with the increased spread of QR codes, there’s also the increased flexibility. Right now, QR is mostly merchant presented, but it looks like more experiences will incorporate consumer presented QR codes in the future.

“There are consumer presented QR products available that allow for consumers to display the QR code which merchants will scan. We believe we will continue to see QR used both for payment and non-payment use cases into the future as consumers and merchants look for simple and safe ways to interact,” said the spokesperson at Mastercard.  

Contactless pay is likely to stay, even after the effects of Covid wear off. 69% of respondents said they plan on using contactless payment methods after the pandemic ends. This is also in line with a Mastercard study, where 74% of surveyed consumers said they plan on using contactless payment post-pandemic.

And QR codes, specifically, appear to be making their mark.

“This QR code movement has been accelerated by the lightweight nature of its implementation, built-in scanning ability in mobile devices, and simplicity,” said Kalliecharan. “This time around QR codes are here to stay.”

0 comments on “Contactless pay is here to stay: What about QR codes?”

Banking, Payments

How Venmo fosters financial responsibility through the Venmo Teen Account 

  • The Venmo Teen Account is wired into the existing Venmo account of parents to keep parents in charge.
  • The custodial account also offers personalized Mastercard debit cards for its younger customers to encourage smart spending decisions from an early age.
Sara Khairi | June 07, 2023

Challenges facing Paze: Jostling for position in a crowded digital wallet space

  • EWS launched its digital wallet service Paze, earlier this year. But Paze is coming into a space where incumbents have become deeply embedded.
  • What challenges await the new digital wallet service?
Rabab Ahsan | June 06, 2023

Citizens and Mastercard roll out first-of-its-kind Touch Card in the US for the visually impaired

  • To enable more inclusive payments for the sight impaired, Citizens has rolled out America's first touch card for its high net-worth clients.
  • Touch cards are an emerging card standard designed to provide a greater sense of security, inclusivity, confidence, and independence to visually challenged consumers.
Sara Khairi | June 06, 2023
Banking, Payments

Santander embraces the Earned Wage Access trend, taps DailyPay to strengthen client relationships

  • Santander Bank has tapped DailyPay to incorporate the Earned Wage Access offering into its treasury management in a move to benefit its commercial banking clients in the US.
  • The EWA offering can serve as an impactful tool for bank clients, bolstering the bond between the employee and the employer as well as establishing a sound footing for their businesses. In turn, it deepens the client-bank relationship and reinforces the growth that they can achieve together.
Sara Khairi | June 01, 2023
Lending, Payments

Can lenders improve the financial health of consumers through design?

  • Design can play a critical role in improving consumers' financial health when it comes to lending.
  • Research by the Financial Health Network shows that areas like defaults, making payments, and borrowing the right amount can be significantly improved through behavioral design principles, to ensure customers make decisions that improve their financial well-being.
Rabab Ahsan | May 26, 2023
More Articles