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Mobile bill payments took a step forward Thursday when automated clearing house network overseer NACHA reported that its Council for Electronic Billing and Payment (CEBP) had developed final guidelines for consumers to use Quick Response (QR) codes on bills to facilitate electronic payments.
The guidelines are voluntary for billers, banks that offer bill pay through their online-banking programs, and bill-payment processors. But with billers, banks, and vendors all providing input into a months-long development process, Rob Unger, NACHA’s senior director of eBilling and Payments, expects the guidelines eventually will get wide adoption even though only a handful of billers are using them today.
“It’s hard to make a prediction, but I think the timing is right,” Unger tells Digital Transactions News. “We’re very much at the early-adopter phase.” He adds that “there’s great interest on the financial-institution side.”
QR codes are a variant of so-called 2-D bar codes and are now common in printed advertisements and marketing materials. Some merchants, notably Starbucks Corp., use electronic bar codes displayed through their smart-phone apps for payments.
The CEBP, a 110-member advisory group with approximately equal representation from direct billers, financial institutions, and vendors, late last summer said it had begun work on using QR codes to not only convert check writers into electronic bill payers, but also to reduce errors in electronic bill payments. Most such errors, according to a NACHA-commissioned study, result from incorrect data entry by consumers.
Paying a bill through a QR code would be a simple process, according to NACHA. After receiving a paper bill with such a code, the consumer would scan it with his or her smart phone or tablet computer that has a QR-code reader app. The reader could be a general-use app or one supplied by the biller or financial institution, which likely would be working with a bill-pay processor. After opening the reader and scanning the QR code, the app would lead the consumer to the direct biller’s or bank’s bill-pay site and pull up the specific bill.
All the pertinent data already would be entered, thus greatly reducing the potential for errors, according to Unger. All the consumer would need to do would be to authenticate him or herself and approve payment. The codes also could be displayed on bills presented electronically.
“Hopefully, this is a bit of a wow factor for those folks that are still paying by check, to get those customers to pay electronically,” says Unger.
While Herndon, Va.-based NACHA of course specializes in ACH payments, the codes would enable the consumer to pay the bill through any payment channel the biller or bank already offers online, which besides ACH could include credit or debit card payments, or PayPal.
The new guidelines contains recommendations regarding QR code size, data to be included in the code, layout of the data represented, and the code readers, according to NACHA. The codes can accommodate up to 292 alphanumeric characters.
The 16 data fields addressed in the codes include mandatory items such as the consumer’s account number with the biller, bill date, amount due date, biller name, biller address line one, and biller city, state, and ZIP code. Optional fields include a direct biller’s Web address (URL), minimum amount due, address line two, biller phone number, biller identification number, and two biller-defined fields.
“The idea behind this specification is to provide an open specification that works both in the biller-direct and bank consolidator channels,” says Unger. “We want the open specification to be agnostic with regard to channel and QR-code reader.”
Next up is a test of the codes that Unger expects will begin some time later this year. NACHA is recruiting billers, financial institutions, and processors and bill-pay services to participate.
