6 minute read 23 Apr. 2021
EY - QR code receipt

QR code payments could fuel business recovery

By EY Canada

Multidisciplinary professional services organization

6 minute read 23 Apr. 2021

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Authored by Diana Halder, EY Canada Payments and Commercial Banking Leader

If you could springboard off QR payments now to generate economic recovery, why would you wait?

Almost 36% of Canadians report avoiding shopping at places that do not accept contactless payments, while 50% of Canadians limit their purchases to avoid exceeding the contactless limit.1 For the 20% of Canadian merchants unable to accept electronic payments, however, physical distancing and a continued preference for contactless transactions represent a true uphill battle.

The good news: quick response (QR) code payments represent an entirely new world of possibility for those merchants and other players across the retail, consumer products and financial services space. Maximizing its impact will take concerted effort and collaboration from stakeholders across the payments ecosystem. The other good news: EY is already working with key players across the industry to help address these challenges.

What’s the issue?

Over the last year, demand for contactless payments soared a remarkable 79% as consumers2 around the world embraced new levels of sanitary and safety measures. That shift is likely here to stay. Merchants everywhere have raced to adapt, and it’s not only those who don’t offer electronic payments that have struggled.

On shop floors across Canada and beyond, challenges abound. Some terminals require a card to be entered or buttons to be punched when a limit exceeds a certain amount. Others rely on wired technology and can’t be pulled far enough from a cash register to accommodate physical distancing guidelines. Multiplied across the million or so businesses that make up the Canadian landscape, those bumps in the road can add up to a sizeable challenge.

Unlike tap-and-pay models, QR code payments allow shoppers to pay by simply snapping a photo of a merchant-displayed code or presenting their own code using their phone. For example, for merchant-presented, that can happen from 10 feet away, just by pointing a phone at a poster, iPad or any other format. Since there is already a link behind the scenes with whatever institution the customer works with, QR payments can work on any phone or operating system. Depending on the way the payment is processed, there could be efficiencies for both the merchant and the payments players.

QR payments also enable real-time, account-based payments, which we know are due to be released in the not-too-distant future. The customer pushes the payment via their bank right there at the point of sale, and the merchant receives the funds instantly.

Figure 1 – Illustrative example of QR code payment flow for the merchant-presented mode

The technology also unleashes a new level of frictionless payments not available to Canadians today, such as integrated tipping at restaurants, next-generation loyalty, and account-less e-commerce where customer payments include their shipping address.

What steps have we taken to make QR payments a reality?

At EY, we convened a consortium of seven industry leaders to help QR payments find their footing here in Canada. Together with international card networks, domestic payment rails, merchant acquirers, payment processors and banks in this multi-part series, we surveyed Canadian businesses and assessed their overwhelming interest in QR payments. We dug deep into use cases, international interoperability, security and a host of other key areas.

Using global leading practices, we worked together over nine weeks to build a Canadian market consensus position aligned with global QR payments standards from EMVCo. That work could now form the foundations of a standard that will harmonize these kinds of payments across market participants from coast to coast.

Those conversations allowed us to move the needle. But we can’t stop there. Our next steps are to complete a proof of concept with the goal of moving ever closer to making this payment mechanism a regular part of Canadians’ everyday lives.

Doing so could prove to be a real game-changer for restaurants, independent retailers and microbusinesses reframing their operations to kick-start their recovery. Still, it will take all of us, working together, to harness the full power and lasting benefits of QR payments.

What does this mean for Canadian payments players?

Merchant acquirers can start processing QR payments. That could take any number of shapes, from enabling the merchant to print a sticker for display at the cash to a symbol on a printed receipt or terminal. As merchants begin to cultivate QR code compatibility, they can begin to ride the wave of possibility while reaping the added economical, convenience and safety benefits of QR payments.

Issuers and e-wallets can begin integrating QR scanning capabilities into their mobile apps. The easier it is for existing customers to scan a QR code, the greater value you bring with truly customer-centric interactions. This capability can fuel your open banking efforts with a rich pipeline of fresh data and real-time insight. It also connects you to merchants who weren’t using any kind of electronic payment services before. By enabling your shared customers to pay through QR codes, you can deepen relationships with previously untapped businesses. That may very well generate new ways of cross-selling and up-selling accounts, lines of credit, lending products and other revenue-generating opportunities.

All payments players can start exploring QR payments through a new lens. Teeing up real-time transfers means building the right framework for success. That’s how you increase the adoption of domestic payment solutions systems from coast to coast. Being part of that dialogue and embracing the upside now puts network players ahead of the curve in the eyes of businesses as leaders in merchant payments.

Regulators can lead the way in supporting uptake with the right policies and guidelines. Getting involved now empowers regulators to set the stage for how this works, and lead the rollout in a way that’s most beneficial to the broader economy. Doing so will drive a spirit of transparency and offer a clear line of sight into who’s using this payment method, when and why. That’s valuable insight that can — and should — continue to influence policy decisions for years to come.

Building a better working world one payment at a time

Transformative change requires transformational leadership. Widespread adoption of QR payments could be a key tool in the economic recovery now beginning to take shape on the frontlines of Canadian businesses. Each of us must do our part to cultivate the conversation and explore what that could mean not just for us, but for a world that works inherently better in the face of whatever comes after what’s next.

What worked yesterday might not work tomorrow. That doesn’t mean payments have to take on an “all or nothing” feel. When we work together across the system to build out new paths forward, we strengthen existing ones and discover new potential. If you could springboard off QR payments now to generate that kind of momentum, why would you wait?

  • Article references

    1Payments Canada, https://www.payments.ca/about-us/news/canadian-spending-and-purchase-habits-have-not-yet-returned-pre-pandemic-preferences.
    2 Mastercard, https://www.mastercard.com/news/press/press-releases/2020/april/mastercard-study-shows-consumers-globally-make-the-move-to-contactless-payments-for-everyday-purchases-seeking-touch-free-payment-experiences/.


Widespread adoption of QR payments could be a key tool in the economic recovery now beginning to take shape on the frontlines of Canadian businesses. By working together with stakeholders across the payments ecosystem, we can capture the full power and lasting benefits that QR payments have to offer.

About this article

By EY Canada

Multidisciplinary professional services organization