Mr. Setzer, how does QR code shopping work?
Matthias Setzer: It is essentially a very simple principle. The quick response (QR) code technology is already supported by practically all Smartphones today and can thus be read by very many devices. A reader function is already integrated in our PayPal app. Each customer can scan the code with it, which already contains all relevant data pertaining to the purchase.
The customer subsequently only needs to select the size and color of the product, acknowledge the terms and conditions and identity himself/herself with his/her PayPal PIN. The product is then automatically sent to the shipping address that’s on file. Incidentally, the customer is not dependent on the app, but is also able to read the QR codes by PayPal with a normal reader and pay.
Can you explain what advantages QR shopping offers to retailers and customers?
Setzer: QR shopping doesn’t just work at the shop window or at the POS terminal. It is the only form factor known to us today that is truly applicable across all channels. QR shopping works the same way as advertising does with a printed catalog or an ad in the newspaper, a poster, a Smart TV or an interactive kiosk right in the store. Needless to say, this is a big advantage for retailers and customers, who are able to systematically get used to shopping with this solution.
Secondly, the QR code is already a well-established technology. Every Smartphone can read the codes and every customer has seen these codes at least once. Even though the fact that you can also shop and pay with QR codes is not something everybody knows yet, the technology itself is already well received all around today. We have launched the system on the market two years ago and have now discovered that the first competitors are developing similar solutions.
Of course, for retailers it is also key that he/she can expand his/her store space simply and quickly by using the QR codes and without having to heavily invest into new and expensive technology. After all, every QR code in essence means another sales opportunity. Another good example is the shop window, which from a retailer’s point of view presents a very interesting sales area of course. However, not every store is open 24/7. During this time, the window delivers buying incentives, but until now, the customer had no way of immediately responding to this need. With QR codes, the shop window also turns into a productive sales floor after opening hours.
Are there other innovative shopping concepts that PayPal is currently working on?
Setzer: Of course, it also makes sense to implement this and other solutions at other locations. After all, we also offer various other technologies, which also include our location-based service PayPal Check-In for example. Since November, our pilot project has been running in Berlin around Rosenthaler Platz. Here is another example: in Paris we implemented a solution for McDonald’s where customers can order on the go via the McDonald’s app. When the customer then enters the restaurant, he/she only needs to pay via Smartphone by scanning the code and is then able to pick up the order immediately.
This is of course an entirely different option than QR shopping, but it is also completely supported by PayPal. At this point, McDonald’s has rolled this solution out all over France, which we are very happy pleased about.
Ultimately, we are trying to globally present different technologies that offer customers and retailers an added benefit. Of course, we respect the big differences in people’s mentality, which certainly is always an aspect when it comes to payment. Americans for instance don’t quite know what to do with QR shopping, because they are so used to fast payment via credit card. In Germany on the other hand, it is still important to offer direct debit and money transfer as payment options, since they are still very popular over here.
Another mobile payment solution by PayPal is payment per "Check-In". You are currently running a pilot in Berlin. Can you briefly explain the main principle and the advantages of this other new solution?
Setzer: We have created a completely new payment option for the Smartphone with Check-In. Retailers – or restaurateurs in the case of this Berlin pilot project – and customers equally benefit from a solution, which makes mobile payment easier than ever.
The customer pulls up retailers near him/her via the PayPal app, checks into the retail store, the Café or restaurant with another swipe of the finger and his/her name and personal photo appear in the respective POS system. When the customer has found his desired products or drank his coffee and tells the retailer that he wants to make a cashless payment, the retailer triggers the payment process by a simple click on the customer’s photo in the POS system. As always, the customer receives payment information and a receipt per push notification and e-mail, so that he can keep track of all transactions.
The PayPal customer’s identification happens securely and reliably via image matching; in doing so, retailers are also able to build more personal relationships with customers. What’s more, they never have to turn customers that carry no cash or not enough cash away. With Check-In, consumers experience a brand-new shopping flexibility and can leave their wallets at home.
One problem with mobile payment services is the lack of consumer acceptance. How can solutions such as those by PayPal contribute to Smartphone payments becoming accepted in the market?
Setzer: According to a PayPal survey from May this past year, 9 out of 10 Germans can already imagine making payments with their Smartphones today. What they are looking for are practical solutions for their everyday problems when they pay for their purchases. With solutions like Check-In that are not just easy to use, but that offer customers a true, easy to understand added value in everyday life, we get more and more customers interested in mobile payment.