Following on from my COVID QR post the other week, I got this in my inbox yesterday from Andreessen Horowitz:
|“Since QR codes were first invented more than 25 years ago, the technology’s strongest application has been improving the payment experience. QR codes provide a safe, reliable, and fast way to pay. QR code payments are particularly commonplace in China; in 2017, an estimated two-thirds of all mobile Alipay payments — $1.7 trillion worth — were made through QR codes. Thus far, however, QR code payment has not taken off in a significant way in the U.S.|
According to a recent survey of 4,000 American and Canadian households by Mercator Advisory Group, QR code payments were used by 13 percent of respondents before the pandemic. During the first wave of lockdowns and social-distancing measures in March, many predicted that 2020 would be the year that such payments would finally see broad U.S. adoption. It made sense: a no-touch QR code is safer than contact payment methods like cash or cards. But though QR payment use has grown by 11 percent over the course of the year, according to Mercator, 48 percent of consumers have still never attempted it. So why hasn’t QR code payment caught on?
One obvious reason is infrastructure — for many years, few merchants offered the ability to pay through QR codes. That is starting to change: in May, PayPal announced that QR code payments would be available through its app in 28 markets, making it much easier for 25 million PayPal merchants to accept QR payments without additional hardware costs. (PayPal also waived fees until October 2020.) In September, UberEats introduced contactless ordering and QR code payments to eliminate the need for paper bills and signatures. CVS announced that it would roll out PayPal QR code payments in over 8,000 stores in the fourth quarter of 2020. But while more merchants are adapting their infrastructure to enable QR payments, it’s still far from widespread.
In addition, Americans have long become accustomed to carrying and paying with credit cards. In China, by comparison, credit card adoption has historically been low — approximately 30 percent in 2008 — which led many to skip physical cards altogether in favor of digital payment options like QR codes.
As the pandemic lingers, consumer financial behaviors are likely to continue to shift. It’s possible COVID will spur wider adoption of QR code payments stateside — we just haven’t seen it yet.
|— Matthieu Hafemeister, a16z fintech deal analyst|