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Apple Inc., whose Apple Pay is the leading mobile-payment service based on near field communication technology, reportedly is testing Quick Response codes as an alternative technology with Apple Pay.
That development was first reported Tuesday by the 9 to 5 Mac blog, which said a second beta version of the upcoming iOS 14 mobile operating system has some “small changes,” including a hidden feature in Apple’s Wallet app to allow QR code payments on the iPhone with Apple Pay.
“References found in the iOS 14 code reveal that Apple is working on a new method for letting users make payments with Apple Pay by scanning a QR code or traditional barcode with the iPhone camera,” the post says. “We’ve managed to access this feature hidden in iOS 14 beta 2, and although it still doesn’t work, we can clearly see an image showing how it will work. Users will point the iPhone camera at a QR code or traditional barcode to pay bills and other things with a card registered with Apple Pay.”
9 to 5 Mac also said the opposite also could work, “with users holding the iPhone in front of a scanner with a QR code generated by the Wallet app.”
A spokesperson for Cupertino, Calif.-based Apple had not responded to a Digital Transactions News request for comment by late Wednesday morning.
If Apple actually enables QR codes and traditional bar codes with Apple Pay, it would mark yet another broadening of mobile payments beyond NFC in general-purpose mobile payments. Besides Apple Pay, a variant of NFC is the technological foundation of Google Pay, and Samsung Pay uses it too in addition to a technology that works with point-of-sale terminals enabled only for magnetic-stripe payments. Many payments executives consider NFC to be to be the superior technology for security and other features. Mobile payments using QR codes or barcodes in the U.S. have been mostly the domain of merchants such as Starbucks, Dunkin’, and Walmart. But just last month merchant acquirer Shift4 Payments Inc. launched QR Pay, a mobile-payment service employing QR codes.
“Apple’s interest in the QR arena is natural; in fact, iOS 14 is a bit of a catch-up in QR-coded payments,” Brian Riley, director of the Credit Advisory Service at Marlborough, Mass.-based Mercator Advisory Group Inc., tells Digital Transactions News by email. “Many central banks endorse the use of QR codes for financial inclusion, but for Apple specifically, this adds functionality to Apple’s already robust payment process.”
Riley notes that QR codes are popular abroad, especially in China, India, and in the Latin America and Caribbean region. “A merchant advantage of QR codes is that transactions can originate from a $40 Android device using a free app. In developing countries, where data lines are expensive or not available, NFC can flounder. With the QR code and a low-cost Android, the merchant is in business in short order, with little expense.”
QR codes could test Apple’s commitment to its proprietary approach to payments, however. “I believe this is a strategic move on Apple’s part to gain Apple Pay traction in countries outside the U.S. where QR codes are a mature payment type,” says Patricia Hewitt, head of Savannah, Ga.-based PG Research & Advisory Services LLC, by email. “What isn’t clear is if it will impact the requirement to provision payment accounts on [the iPhone’s] Secure Element, which has been a barrier to entry in some markets. This begs the question if the company plans to incorporate something like an Apple-branded prepaid card that users can load for payments.”
