QR Codes and Open APIs: Partners Powering Payments Transformation

QR codes and Open application program interfaces (APIs) are two powerful forces behind the convergence of payment types that’s currently underway. They’ve already enabled wider participation and acceptance, led to a

merging of infrastructure and fueled the development of new use cases.

Read on to see the radical shifts APIs and QR codes have brought to payments, and why all payment providers must understand how to use them to drive new forms of competitive advantage.

Key Benefits QR Codes APIs

How They’re Driving ConvergenceQR Codes APIs

LimitationsQR Codes APIs

How They’re Being UsedQR Codes APIs

QR Codes QR code payments are performed by scanning a QR code from a mobile app. Funds are either “pushed” from the consumer to the merchant or “pulled” by the merchant from the consumer. Many QR code-initiated payments still rely on card channels, but direct-from-account payments are becoming more common.

APIs Payment providers use APIs to share data, information and services directly with others in the financial ecosystem, including other payment providers, financial institutions and third-party developers. This connectivity enables the creation of new applications and services.

• Conduct a payment transaction without a physical payment terminal

• Support expanding mobile payment usage, including P2P and micropayments

• Payment instrument agnostic for increased ubiquity

• Can eliminate card payment networks to reduce cost of processing a payment

• Providers determine how to execute, clear and settle the payment without disrupting customer experience

• Initiate payment for card and non-card transactions

• Enable acceptance across variety of payment rails

• Push payments into the bank’s back- office environment

• Standardize payment information for acceptance and processing

• May not ease processing for providers with outdated platforms

• Level of data (merchant details, value of the transaction, attributes of the card/account) that travel with payment varies

• May not disrupt or change payment behavior in markets with well-established card use

• Regions that strive to reduce cash and/or have less card infrastructure have embraced QR code payments.

° 15 million+ small and micro merchants in China use Alipay QR code payments.

° 9 million+ member merchants use India’s Paytm, a QR code-based platform.

° 27 payment schemes have adopted Singapore Quick Response Code (SGQR) since it launched in September. China, Hong Kong, Indonesia, South Korea and Taiwan have similar initiatives.

° Mastercard’s QR payment technology is fueling adoption across Africa, with support from local banks for merchant use.

• Early adopter restaurants, hotels and bars print QR codes on receipts, allowing customers to pay and leave when they want.

• Enable constant innovation for competitive advantage and addition of new business value

• Can act as an intermediate layer in between apps (including those that read/create the QR code and the bank’s system)

• Create value-added services that differentiate and increase customer value

• Can eliminate card payment networks to reduce processing costs

• Simplify collaboration between both non-financial providers and those in the financial services ecosystem for mutual benefit

• Eliminate need to go through card networks with direct connectivity to others in payments ecosystem

• Facilitate mid-office or channel integration for issuers

• Create a rich information layer

• May not be easily accessible on legacy or outdated platforms that lack an API connectivity layer

• Currently no globally accepted standard

• Converge domestic and cross-border payments acceptance across payment networks

• Enable near real-time and instant payments in corporate treasury

• Power new innovations like in-car eWallets

• Airlines and supermarkets in Europe are developing open API payments initiated direct from account.

• Facilitates compliance with Open Banking regulations eg. PSD2

Better Together: QR Codes and APIs

Often misperceived as competing or independent, APIs and QR codes are in fact synergistic technologies in the payments ecosystem.

Providers whose platforms aren’t built for APIs and QR codes will find it difficult to align processes with future changes in payments, and risk being unable to keep up with the continued convergence

these technologies will drive.

LET’S DISCUSS HOW FIS CAN PRIME YOUR PAYMENTS PLATFORM TO MAKE PAYMENTS CONVERGENCE AN OPPORTUNITY THAT IMPROVES AND

FUTURE-PROOFS YOUR BUSINESS.

CALL: +44.(0).1923.471.850

EMAIL: getinfo@fisglobal.com

VISIT: FISGlobal.com/PaymentsOne