EMVCo prepares for launching QR-based payment options

Monday 14 August 2017 | 15:52 CET | Background
EMVCo, the global technical body that manages the EMV Specifications, has publicly released two QR Code payment specifications. QR Codes are two-dimensional machine-readable barcodes, which are increasingly used to facilitate mobile payments at the point-of-sale. 

EMVCo commenced its QR Code payments activity in 2016 and focused on creating QR Code payment specifications that provide convenience, security and reliability in line with other EMV Specifications. 

The EMV QR Code Specification for Payment Systems supports two differing QR Code payment use cases that mirror each other. 

With Consumer-presented Code Payment, the customer in a store displays the QR Code on their mobile device and the merchant uses an optical scanner to read the code. 

With Merchant-presented, the merchant displays the QR Code and the customer uses their mobile device to scan the code. 

EMV QR can sit alongside existing solutions

The EMV QR Code Specification for Payment Systems is designed to coexist with existing proprietary QR Code solutions. Those who have already developed proprietary solutions have the option to migrate to the globally interoperable EMV framework to widen acceptance points. The specification enables merchants to accept several QR Code payment solutions from various providers in a standardized manner.

The EMV QR Code Specifications will be available to all industry participants, on a royalty-free basis and are designed to promote global interoperability and help prevent fraud. EMVCo does not mandate nor enforce EMV compliance or the implementation policies for issuers, merchants and acquirers.

However this co-existence may not be by default. Payment infrastructure can only be shared up to a point, in the same way that cyclists, cars and trucks can share the same roads but are very different. Some of the equipment at point of sale may be re-used, but every QR-code must be channeled into the right back office. 

QR by MasterCard or Visa 

 With EMVCo, this will be one of the familiar card networks. In many ways, EMVCo will be offered as an alternative technical solution for the traditional card based schemes. EMVCo has and will continue to leverage this existing infrastructure and experience to align the security for QR Code payments with its established specifications. 

It will also align with security requirements identified through EMVCo’s current activity regarding Software-Based Mobile Payments. For consumer-presented mode, the specification is compatible with EMV Payment Tokenisation.
Use cases can be found in several markets. Visa and MasterCard have developed their own solutions, mVisa and MasterPass QR respectively. These will be maintained. 

In emerging markets such as India and Kenya, QR has been implemented as a way to offer payment and money transfer between bank accounts, without the need for a complex solution involving card emulation. QR codes can be sent over mobile internet, but also over USSD.

MVisa allows consumers to pay for goods and services by scanning a QR code on a smart phone or entering a merchant number into their feature phones. Payment goes straight from the consumer’s Visa account into the merchant’s account and provides real-time notification to both parties. 

This means that the solution is compelling in emerging markets where smartphone penetration is typically far ahead of the banking and card acceptance infrastructure.

QR can be a shortcut to mobile payment

In mature markets, QR has several potential benefits, including reach. In many markets, contactless cards and terminals are readily available; NFC can be made to work in a very quick and straightforward manner, because the near field radio is always listening.  

For mobile however the development of NFC-based payment solutions has proven no easy journey in terms of interoperability, time-to-market and ultimately cost. 

While Apple offers a ready-to-go solution for the iPhone, it has locked down the user data and has so far launched Apple Pay only in a few markets.  Android Pay or HCE has lower barriers of entry, but on the other hand, compatibility, testing and life cycle management are more challenging. 

NFC may be quicker, but a QR-code could also hold more information. A merchant could not only set up payment, but also exchange other data, such as a coupon or a loyalty card number.  

Testing from 2018 

EMVCo is also developing a self-testing framework for the merchant-presented and consumer-presented specifications which allows POI implementers to evaluate whether their QR Codes are generated or interpreted in compliance to the EMV QR Code Specifications. This is expected to be available in early 2018. Testing for consumer device applications will be undertaken by the payment systems.

Testing expected to commence in 2018. Launching services may take longer, especially in markets where banks and providers want to have a broad support for this solution.     


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