Unification of QR codes in Singapore26th September 2018
Singapore has announced the unification of QR codes in the region, creating a single Singapore Quick Response Code (SGQR) supported by 27 local payment schemes. Merchants will now only need to display a single SGQR label – which displays the payment schemes they accept – meaning faster checkouts and the potential for increased efficiency and revenue at peak times.
The project was led by the SGQR taskforce (Appendix A) as part of the Singapore government’s push to modernise the e-payments landscape in the region and provides a much-needed solution to the fragmentation of QR code payments. The “infrastructure-light technology” simplifies the payment process for both consumer and merchant, as consumers: ‘pick’ their preferred scheme from those available, ‘scan’ the SGQR code, and ‘pay’ the amount required.
The SGQR specifications are based on the “QR Code Specification for Payment System – Merchant-Presented Mode” issued by EMVCo in July 2017 , and the taskforce have customised some standards to better suit the Singapore market. The press release details these to be:
- Default positions for Singapore-relevant fields
- Guidance on EMV-specific fields
- Changes to the ordering of merchant account information
- Improved standards of code efficiency in merchant account information from payment schemes.
What does this mean for merchants?
Merchants may benefit from being able to accept payment via more payments schemes, as the marginal cost of acceptance is now likely to be slightly lower. Only needing to display one QR code means less disruption at the POS and thus an easier implementation of new payment methods. In addition, payments schemes will be able to access more merchants through SGQR, potentially increasing competition in areas previously dominated by a few schemes. In this way, merchants could see cost reductions within e-payments acceptance, however it is difficult to predict the extent to which these reductions may occur at this stage.
Additionally, new payment schemes can be added into the SGQR, subject to consultation with the leads of the SGQR Taskforce. Competition, therefore, is unlikely to be restricted by this movement.
The biggest issue facing merchants in light of this development is the fact that e-payments come with fees potentially in excess of the cost of cash: a shift towards more e-payments resulting from this unified QR code could increase merchants’ overall costs. Merchants must be vigilant in assessing agreements with their acquirers to ensure costs of payments acceptance do not become excessive.
The clear overall message, however, is that Singapore is racing towards establishing an innovative, competitive e-payments industry as well as a highly modernised payments ecosystem.