Technology of the Week – Theme: Information Goods – Mobile Payment

9

October

2016

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In this Tech of the Week we have taken a closer look into mobile payment technologies and seen how this information good (mobile device) has innovated the way we pay. First of all we have shown the evolution of payment since the beginning of human existence. And conclude that today’s payment methods exist of either cash, credit or debit card or newly enabled the mobile device.

Paying with your mobile device is highly interesting since our society nowadays is carrying such a device around all day long, therefore it is actually quite straightforward to think of using it as a payment method as well. Recent technology innovations have made it possible to add this feature to your mobile device. With QR-codes and Near Field Communication (NFC) chips your mobile device is ready to exchange information and especially ready to exchange payment informations. In the movie we explain how these two technologies could work in your daily life. The QR-code is a readily available technology as this technology has already been used for more in-depth brand exposure (Soon, 2008). Consumers are directed to webpages, applications or other information-savvy materials. But what if you are in a restaurant, you ask for the bill, you scan the QR-code that is printed on the bill and voila the bill has been paid! No cash, no cards, no wallet needed. Just a mobile device with a camera (and an internet connection) and the transaction is fulfilled.

The NFC chip is probably also familiar, although you might never have heard of the name of the chip. Think of your debit or credit card, nowadays you can just put the card against the pin device and the transaction is completed. These chips are now built into many smartphones available on the market (Harrop, Das and Holland, 2014) making it possible to let your phone do what your credit or debit card can do. To have a transaction fulfilled with the NFC chip, both devices need to be equipped with NFC software and held within a maximum of 10 cm from each other.

In the video we have taken a closer look into both technologies and compared their strengths and weaknesses. We have identified four main areas; user interaction, costs, technology widespread and security.

User Interaction

As explained above, with the QR-code you have to scan the code, with NFC you have to “tap” your device near the NFC receptor. Both technologies work very differently and as from the user interaction it is clearly the NFC tech which is the easiest to use. We therefore attributed the first point to NFC.

Costs

Regarding the costs, the QR-code is clearly the winner. Generating a code requires few resources (a code can even be generated for free through the internet) and can be placed everywhere. As for NFC, a special chip needs to be developed and implemented in two different devices which includes high costs.

Technology widespread

The NFC technology is becoming more and more popular and Samsung or Apple starting to implement the chip in their phones. However, mainly due to the low costs, QR-codes are available everywhere and the technology already exists within all mobile devices with a camera.

Security

This time NFC is the clear winner, to fulfill a transaction the chip has to be brought into the connection range (10cm). While a QR-code as soon as it is generated can be scanned by anyone and thus exposing the customer’s payment details.

From the comparison, a clear winner cannot be found. However, we know now where the strengths and weaknesses of both technologies lie.

One certain conclusion that can be drawn is that cash and payment cards will disappear as these new technologies are taking over their share in the market.  

References

Euromonitor International Blog. 2016. NFC – what is it and how can it help retailers? – Euromonitor International Blog. [ONLINE] Available at: http://blog.euromonitor.com/2011/04/nfc-what-is-it-and-how-can-it-help-retailers.html. [Accessed 09 October 2016].

Harrop P, Das R, Holland G 2014, IDTechEx. 2016. Near Field Communication (NFC) 2014-2024: IDTechEx. [ONLINE] Available at: http://www.idtechex.com/research/reports/near-field-communication-nfc-2014-2024-000363.asp?viewopt=contents. [Accessed 16 September 2016].

Soon T J 2008, “QR code.” Synthesis Journal 2008 (2008): 59-78.

 

Estateqrceodes, 2016 ‘Advantages and disadvantages of QR code’. [ONLINE] Available at: http://www.estateqrcodes.com/advantages-disadvantages.html[Accessed 16 September 2016].

 

Abdul, R 2015, ‘QR code advantages and disadvantages’. [ONLINE] Available at: http://www.robabdul.com/marketing/qr-code-advantages-and-disadvantages/ [Accessed 16 September 2016].

 

Ideal, 2015, ‘QR code’ [ONLINE] Available at: https://www.ideal.nl/ontvangen/aan-de-slag/qr-code/[Accessed 16 September 2016].

 

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Technology of the Week – QR & NFC

6

October

2016

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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.

 

Watch our video here!

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Are QR-codes the bridge between offline and online marketing?

27

September

2016

5/5 (3)

While preparing our tech of the week project, I have been wondering whether this QR-code technology is actually still useful for marketing purposes. I have myself scanned a QR-code maybe once to retrieve information about a brand but definitely not more. And I certainly do not have a special app on my smartphone to scan such codes. However, when searching the world wide web, people still seem to find the QR-code a useful tool to serve as a bridge between offline and online marketing. Unsuccessful QR-codes are blamed on wrong location, invaluable information or ineffective links (DeMers, 2014). It is most certainly true that a QR-code is not effective when shown in the wrong location (e.g. online or on moving objects). And the same goes for scanning a code that does not provide any valuable information or worse leads you to a non-existing page. But what if the codes are published on the right location and offer valuable content, are they then a highly effective marketing tool at a relatively low cost? There are two main reasons to explain why QR-codes are not thriving. First of all, the way QR-codes need to be scanned has not been widely adopted by consumers. Many mobile users actually still do not know how this technology works and how they could more or less benefit from it (Morris, 2015). To be able to scan a QR-code the consumer needs to be aware of the technology and to install an adequate application with the ability to read the codes, and then he or she needs to feel appealed to actually pull out their phone, scan the code and discover the information behind it. It is quite a complex and time-consuming process.

The second argument, which might be as well the cause of the first is that mobile operating systems have not widely incorporated QR-code scanning technologies in their devices (Williams, 2011). Yes, with Apple’s passbook it is possible to scan the QR-codes of your boarding passes or customer cards. But these operating systems do not facilitate any marketing QR-code scanning to their end-users.

Although creating a QR-code is very cost effective and can be done by anyone, the effectiveness for marketing purposes will lie in a more widely incorporation of the technology within our mobile devices, or the creation of a complete new innovation to tie offline and online together.

 

References

Davis P 2011, How to reach your mobile customer using QR codes [ONLINE] Available at: http://www.socialmediatoday.com/content/how-reach-your-mobile-customer-using-qr-codes [Accessed 26 September 2016]

 

DeMers J 2014, How to use QR codes in your marketing campaign [ONLINE] Available at:

https://www.searchenginejournal.com/use-qr-codes-marketing-campaign/103049/ [Accessed 26 September 2016]

 

Goodin A 2016, Are QR codes making a comeback in 2016? [ONLINE] Available at: http://www.creativeguerrillamarketing.com/mobile-marketing-2/are-qr-codes-making-a-comeback-in-2016/ [Accessed 27 September 2016]

 

Griffith E 2016, Messaging apps are making QR codes a thing again [ONLINE] Available at: http://fortune.com/2016/05/19/kik-snapchat-qr-code/ [Accessed 27 September 2016]

 

Kolowich L 2014, Are QR codes dead? [ONLINE] Available at:

http://blog.hubspot.com/marketing/qr-codes-dead#sm.0001j9t3ifwxfecv108enwkqgqhyd [Accessed 26 September 2016]

 

Meunier B 2013, QR codes work (when done well) [ONLINE] Available at: http://marketingland.com/qr-codes-work-when-done-well-56243 [Accessed 27 September 2016]

 

Morris B 2015, Are QR codes thriving or dying? [ONLINE] Available at: http://www.business2community.com/marketing/qr-codes-thriving-dying-01228016#WLpq0YB2y17vjEWS.97 [Accessed 27 September 2016].

 

Williams O 2011, Why isn’t everyone using QR codes? [ONLINE] Available at:

http://www.imediaconnection.com/articles/ported-articles/red-dot-articles/2011/mar/why-isnt-everyone-using-qr-codes/ [Accessed 27 September 2016]

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