QR codes can streamline the payment process by eliminating the most cumbersome steps, such as entering your account, swiping your card and sign, and getting change. Using a QR code to process payment makes many users feel more comfortable. Recently, the Payment & Clearing Association of China has issued Bar Code Payment Norms (exposure draft), which specifies standards for safe bar code payment service.
In March 2014, the People’s Bank of China, the country’s central bank, banned QR code payment service due to the absence of common standards in terms of technology, verification, and certification. However, third-party payment service providers and some traditional finance institutions didn’t stop attempts to explore QR code payment. Alipay and Wechat, both third-party payment platforms, launched the safer “be scanned” mode that enables cashiers to scan a QR code provided by the customers. The regulators have accepted this mode since it emerged.
The exposure draft is the first official support of QR code payment, which means that China’s traditional financial institutions will officially endorse QR code payment. Industrial and Commercial Bank of China launched its own QR code payment product as soon as the policy was released, making it the first domestic commercial bank to offer such a product. China UnionPay announced that it had begun to build its own QR code payment system according to the Norms. From now on, traditional banks and state-backed payment platforms will adapt to the trends of “Internet Plus” and become major forces in QR code payment.
QR code payment is the most convenient and popular mode of payment so far. Once safety risks are eliminated, QR code payments look very promising.
According to the Overview of Payment Systems in First Quarter of 2016 released by the People’s Bank of China, banking and financial institutions handled e-payments of 793.97 trillion yuan in the first quarter of this year, of which 5.615 billion transactions were made through mobile payments for a total sum of 52.13 trillion yuan, still miniscule compared to the total. Mobile payments will definitely gain greater momentum once constraints on QR code payments are relieved through sound regulation and risk control measures.