Rising popularity of QR code based payments in South-East Asia

The Quick Response Code first emerged in the automobile industry, and was invented by the Japanese company Denso Wave in 1994. The initial purpose behind QR codes was to track vehicles during the manufacturing cycle. However, its ease of use and fast readability soon led to widespread interest outside of the automobile industry. As a result, since its conception, QR codes have found a myriad of other uses, ranging from mobile operating systems to video games.

While QR codes reached mainstream consciousness through Japanese companies, they only truly achieved ubiquitous status through Chinese payment behemoths, Alipay and WeChat Pay. The convenience and privacy of QR codes makes it particularly well suited to the payments industry by allowing consumers to simply scan QR codes to make any type of payment. Unlike Apple Pay or Android Pay, QR code payment systems do not require an internet connection to work. This is one of the driving reasons behind its rising popularity in ASEAN nations as they move towards a cashless society.

Riding on the coattails of the Chinese experience, many ASEAN governments have recognised the advantages of adopting a QR code based payment system and are making significant inroads in terms of implementation in their respective countries. Singapore is arguably the most advanced nation when it comes to implementing QR codes. In August 2017, the national payments council established an industry taskforce to develop a common SG QR code that can be used as a convenient e-payment method for cash-based merchants. Notwithstanding that, local banks DBS and OCBC have also launched their own QR code payment modes for their customers. Other important stakeholders like NETSPay (and its NETS QR), as well as GrabPay have also entered the payments industry, each with their own customer base thus lowering the barriers of entry into the world of e-payment.

In other ASEAN nations, steps have also been taken to adopt QR code based payment modes. For example, the Bank of Thailand has approved plans by five commercial banks to introduce QR code services. This was recently put on trial at Bangkok’s famous Chatuchak market, where small vendors as well as service providers (e.g. motorcycle taxis) accepted payment from their customers using their mobile phones to transfer money via QR codes. Elsewhere in Malaysia, the Association of Banks in Malaysia, together with the National Cards Group, comprising of 25 Malaysian banks and non-bank credit-card issuers such as Mastercard, are in talks with the central bank to enact a new policy framework governing e-payments. In Indonesia, which has the largest market and population in South-East Asia, the drive to enable cashless transactions is coming from startups. One such startup is Pundi Pundi, which offers a micro-credit system allowing customers to make payment at convenience stores, noodle sellers and hawker centres.

While steps have obviously been taken to transform ASEAN countries into cashless societies, the adoption rate is still far lower than that of China. Indeed, as ASEAN nations continue to chart their own paths, the lessons learnt from China and Japan experience with QR code payments will no doubt be valuable.

About FOMO Pay

FOMO Pay provides one-stop QRCode Payment Solution which enables merchants to accept a full suite of new payment methods including WeChat Pay, NETSPay, mVISA, Grab Pay, Baidu Wallet, Best Pay, etc. Launched in 2016 with more than 1000 merchants acquired within a year, FOMO Pay is trusted by major companies including SPH, Marina Bay Sands, StarHub, JUMBO, Club 21, CHANEL, etc. With FOMO Pay, merchants can unlock true business potential by giving customers the payment options they prefer and adopt cashless payment easily. FOMO Pay is also sitting in MAS SGQR Taskforce to promote QR code payment and make Singapore a cashless society.