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NFC vs QR Codes, Which will Win the Mobile Payment Battle?

2018-10-24 14:03 Wednesday


The mobile payment market in China has grown exponentially in recent years, changing the paradigm for merchants and consumers. Though China leads the field, mobile payments have gained gradual acceptance in other countries.

Generally speaking, there are two main mobile payment methods in use, NFC (Near Field Communication) and QR codes. They differ greatly in features, safety, and future development outlook.

NFC

NFC technology appeared in 2004, much earlier than QR codes. Thanks to integrated chips, NFC technology can transfer physical information between two electronic devices. Furthermore, NFC enables individuals to physically check in at an event or location, identity equipment information, as well as complete payments. Moreover, NFC  is much safer than QR codes due to its mature development and long track record.

However, NFC technology also has significant drawbacks. Most notably, users have to own NFC equipment if they want to conduct payments. Also, for the purposes of mutual identification, the two pieces of NFC equipment need to be compatible, otherwise the transaction will be unsuccessful.

QR code

The first QR code payment proposal in China was drafted in 2011. In the seven proceeding years, QR code payments have revolutionized the mobile payment market.

QR codes feature low manufacturing and circulation costs, while retaining  high flexibility, and are suitable for widespread application.  QR codes still work even when some inconsequential parts are missing. More importantly, users can complete payments with nothing other than a smartphone.

Unfortunately the overwhelming convenience of QR codes can also result in a multitude of scams, making them a riskier proposition for users.

QR codes continue to improve in the wake of technological breakthroughs. Direct QR codes have been largely replaced by indirect QR codes, meaning that retailers now have to scan temporary QR codes generated by users to complete payments,  a development that has reinforced user safety. In contrast, NFC has seen only marginal technological progressin recent years.

Nonetheless,  emerging biometric technologies may make QR codes and NFC largely irrelevant. Likewise,  other cutting-edge technologies including blockchain, virtual reality, and Internet of Things, are being applied to payments, which may further hasten the exit of NFC and QR codes. Until then however, QR codes and NFC are the two models that have proven to be reliably successful for conducting mobile payments, and will continue to play a leading role in its widespread adoption.

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