Currently there are two forms of disruptive technologies that are very significant in the payment industry. The top two forms, QR codes and NFC, aim to replace cold hard cash.
QR
QR, short for Quick Response (codes) can be scanned by the camera of any mobile device in order to unlock the user’s payment information and complete a transaction, It could be used with any smart phone with a camera.
This technology can be used in many situations. It started as a simple way to identify products by their bar code. But soon after, people realized that one-dimensional bar codes do not hold enough information, so they developed a two-dimensional code, the QR code. When scanning a QR code you are basically clicking on a url, it brings you straight to the place you need to be.
NFC
NFC, short for Near Field Communication, enables radio connection from one device to another. This technology is similar to Bluetooth, only the range is much shorter. The requirements for a successful transaction are a NFC chip on each side. NFC is able to link two devices that both possess the NFC chip. NFC has evolved from its predecessor Radio Frequency Identification, the most important difference is that NFC is used at a shorter distance which makes it more secure.
Customers are able to pay for their purchases by simply waving their NFC enabled bank passes near a sensor pad. Because entering PIN codes would not be necessary, it adds convenience to the way transactions are conducted.
Only recently has the technology been applied to smartphones. This progressed further by allowing smartphones to serve as an e-wallet with the same ease that a payment card would provide. Consumers can simply wave their phone near payment sensors instead of their cards.
Comparing the two
Both technologies function in quite similar ways. We see NFC being used for payments in physical shops, but on the other hand, superstores like Wal-Mart are using QR codes instead. Both technologies are designed and used for contactless communication between devices. However, QR is every static, it can be used to generate a code which can be used repeatedly. It is very cheap to generate and its functional time is almost endless. But placing a QR code everywhere for everything is not a good solution. We like our world less cluttered. Hidden technology like NFC can help us with that. The same functionality can be reached, moreover it is invisible and faster than scanning a QR code. Besides, it is also re-programmable after implementation, which makes NFC very flexible.
Prediction
The big difference is mainly that QR codes are a one-way solution. NFC chips can potentially be used multiple ways AND be used for data collection. Resulting in even more Big Data becoming available to companies. Besides, NFC adds so much convenience to payment situations, without having to open an app. If there is a chip implemented in your device or card, then you are able to benefit from this technology.
While QR codes will not leave us anytime soon, we do believe people will feel the difference of more and more NFC chips entering our lives and adding convenience to it. With the Internet of Things on the horizon, easy invisible solutions to connect devices with each other will only grow in popularity.
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