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Posts Tagged ‘Perx’

QR Codes: Scanning for Loyalty and Payment

December 10, 2012 in Uncategorized | Comments (0)

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A few weeks ago, I posted about the recent Square round of funding and how there’s a battle going on over control of the point-of-sale (POS)—and it’s not only about payment. I believe it’s about loyalty, and leveraging the power of mobile to create a direct relationship with customers.

There are a number of solutions available that incorporate quick-response (QR) codes into purchase transactions. They all 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).

The biggest bonus for retailers is that the QR code 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 tailor their marketing based on that. 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 iPhone application for the last few months, which follows this exact process.

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). 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’re continuing to see many banks start to incorporate QR codes into their mobile banking application for bill payment and also P2P payment. Start-up 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—and now Bank of America is testing the technology.

I’m not convinced QR code payments are the next killer app, but they are one more way to enable mobile payments without NFC. They’ll certainly play a role going forward in mobile CRM and payments. After all, Starbucks with its 2D barcode technology has already generated over $40 million USD in payment transactions as reported at the end of the first quarter this year.