QR codes: The key to loyalty and payments?
There has been discussion around Square?s round of funding and how there is a battle going on over control of the point-of-sale (POS)?and it is not only about payment. I believe it is about loyalty, and leveraging the power of mobile to create a direct relationship with customers. Retailers are now looking to own that relationship with the customer.
There are a number of solutions available that incorporate quick-response (QR) codes into purchase transactions.
QR codes can be used to store all sorts of data from numbers, text and even URLs.
In this case, they work like a virtual punch card where customers spend a certain amount of money and get some freebie or discount as a reward. They measure loyalty better than Facebook or foursquare ?check ins? because customers actually have to buy something to get access to the QR code.
Some solutions print the code at the bottom of each sales receipt (RewardLoop, Punchd) or allow customers to scan a code at the register (Perx, Belly).
Nuggets of information
One of the latest companies to jump on the QR code bandwagon is McDonald?s.
The fast food giant announced a few weeks ago that it will be launching a new global packaging design that uses QR codes on its carry-out packaging. The service will allow customers to view the nutritional information of their purchased food items.
This is a highly CRM-focused move by McDonald?s, which is not only trying to maintain relationships with their nutrition-conscious customers by being transparent about the calorie information, but also allowing the nutritional information to be available in real-time.
The biggest bonus for McDonald?s and other merchants is that QR codes can contain information about the purchase: what was sold, date, time, location and payment method.
Using this data, companies can get to know their customers buying habits and better tailor their marketing messages.
McDonald?s will leverage its app to get a sense of whether customers would prefer a Big Mac or an Angus Burger or a McCafe Mocha versus a fruit smoothie or discover whether new nutritious item on the menu will be a hit or not.
The setup is lightweight, integrating with existing POS systems via an add-on device or software plug-in.
The quick scan also makes it easy for customers to enroll, and having your mobile replace the stack of paper cards in your wallet ? or forgotten in your kitchen drawer ? is a bonus, too.
You simply scan a code again each time you make a purchase, and the loyalty information is stored in the cloud.
I myself have used a Subway, Cold Rock and Crust Pizza iPhone application in Singapore for the last few months, which follows this exact process. My kids are also using it frequently.
Paying via QR code is gaining some traction as well, as we have seen with PayPal conducting some interesting pilots this year in Singapore on the walls in the MTR (the Singapore subway).
Indeed, it allows you to buy products directly from advertisements by scanning a QR code and entering your payment information. The QR code presumably captures the place and time you scanned, providing valuable information to retailers, as well as a direct connection to your mobile device.
At the same time, we are continuing to see many banks start to incorporate QR codes into their mobile banking applications for bill payment and also P2P payment.
Startup Paydiant, a white-label mobile payments API, recently received $12 million in funding. Pioneering restaurants, hotels and bars can use it to print QR codes on receipts, allowing customers to pay and leave when they want. Now, Bank of America is testing the technology.
I AM NOT convinced QR code payments are the next killer app, but they are one more way to enable mobile payments without NFC. They will certainly play a role going forward in mobile CRM and payments and whether you are a bank, retailer, consumer brand or transport company, you are likely to embrace this.
After all, Starbucks with its 2D barcode technology has already generated more than $40 million in payment transactions as reported at the end of the first quarter this year, and a few weeks ago Starbucks reported that 20 percent of sales are now being conducted by mobile payment.
Matthew Talbot is senior vice president of mcommerce for SAP, Singapore. Reach him at .