QR code-based instant payments are not just easy to set up. They also provide game-changing advantages to businesses and their customers.  

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In 2021, Saudi Arabia and Bahrain launched their instant payments (real-time payments) platforms. UAE and Kuwait have followed suit and other countries in the region are expected to adopt them in the years to come. 

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Europe is not left behind. There, we have the Single Euro Payments Area (SEPA) credit transfer scheme created by the European Central Bank (ECB) and the European Commission, which allows instant cross-border credit transfers in the Euro area. 

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The widespread adoption of instant payment solutions (the US launched its own platform, FedNow, in July, 2023) has been driven by the desire for convenient and fast payment systems that minimise transaction costs. 

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Unlike bank transfers, transactions on instant payment platforms can be completed within seconds because intermediary financial institutions like clearing houses are not involved. With these platforms, businesses can be more liquid as they quickly get access to their funds even while reducing transaction costs and improving payment transparency. 

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QR codes payments are a form of instant payments. With them, businesses not on a national real-time payment scheme or whose customers have not adopted such schemes can still enjoy the benefits of instant payments. 

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But QR codes, in addition to being a form of instant payments service, also provide other advantages as they are also a form of contactless payments and can be used for online payments as well as in-store purchases. 

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In what follows, we will consider eight advantages that businesses in Kuwait can enjoy by adopting QR code-based instant payments. 

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[Do you want to enjoy the benefits of instant and contactless payments in Kuwait? Download the Kem app to start accepting and sending payments via QR codes.]

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1. Faster transactions

According to Stripe, a typical instant payment transaction can be completed within 5 and 30 seconds and a few minutes at most (in the case of system availability). This is unlike bank transfers that can take 1 or 2 business days in certain jurisdictions. 

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As a form of instant payments, QR code payments can be completed within seconds or at most a few minutes. In addition, QR code payments are devoid of the failings of debit or credit card transactions – failed transactions, money reversals, double debits/credits for a single transaction, etc. 

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“With a QR code payment app, you can say goodbye to the long waiting period of traditional payment methods,” according to the Indian Economic Times. “You can now easily pay for your purchases in a few seconds with a simple smartphone camera or a QR code scanner app.”

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“With a QR code payment app, you can say goodbye to the long waiting period of traditional payment methods.” – Indian Economic Times

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As a result, your business can quickly gain access to the revenue it has earned without being at the mercy of banking intermediaries that may unnecessarily delay traditional bank transfers or card payments.

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2. Improved liquidity

By getting access to your revenue as quickly as possible, you can improve your liquidity and cash flow. In other  words, you can receive your money quickly and then go on and pay your bills. 

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“Immediate payments with instantaneous clearing and settlement reduces the amount of money locked in processing, improving cash and liquidity management for businesses and giving consumers a much clearer picture of their finances,” according to MasterCard, global payment service providers.

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“Immediate payments give consumers a much clearer picture of their finances.” – MasterCard

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This is especially important if you are a small business who cannot access financial services that bigger counterparts use to manage liquidity challenges. 

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On the other side, instant payments also help you pay your partners quickly, thus leading to greater trust and improved business relationships. 

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3. Secure transactions

With QR codes, there is no need for you to store customers’ payment information. Also, unlike other forms of instant payments, there is no need for exchange of bank account numbers. 

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This makes it more difficult for cyber hacks to happen on the QR code payment system. 

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“QR Codes offer a secure and centralized way to take payments.” – Checkout.com 

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“As all payment information is encrypted, and there’s no need to store personal information from your customers in order to complete the transaction, QR codes offer a secure and centralized way to take payments,” said Checkout.com, a digital payments company. 

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4. Contactless transactions

In addition to being an instant payment method, QR codes are also a contactless payment method. 

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During COVID-19, when contact with other people was discouraged for safety reasons, contactless payment services came to the limelight, as The Fintech Times reported. 

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A 2021 survey by McKinsey and Co, a global consulting firm, showed that QR codes will be the second most dominant payment service in the entire Middle East from 2021 to 2026. It’s no surprise that the one they expected to be most dominant is also another form of contactless payment – contactless cards. 

Contactless payment methods like QR codes are not only safer, they are more convenient and faster, thus reducing customer wait time in stores. Furthermore, “Contactless payments are also highly accessible, and can help lower the barrier to entry for new small businesses,“ according to GoCardless, a digital payments company.  

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Source: DPO Group

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5. Convenience and ease

When it comes to payments, customers want the process to be as frictionless as possible. This is why the evolution of payment systems is a testimony to the value of convenience. 

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The survey by MasterCard quoted above has shown that convenience and accuracy are two of the top reasons why customers want instant payments. Interestingly, some respondents consider instant payments (because of its convenience and accuracy) to be more important than “access to the internet, next-day delivery and even everyday utilities.”

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Instant payments are also convenient for businesses accepting them. “Because it only takes a few seconds to transfer money, transactions no longer need to be manually checked or monitored,” said Stripe.

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Similarly, “companies are also less likely to deal with a payment reversal due to insufficient funds,” according to the Federal Reserve. This is “because faster payments typically involve a “credit push” (that is, they require the payer to have sufficient funds in their account before the payer can make the payment), and they are final (that is, the payee is assured of receiving the funds).” 

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QR codes even provide another level of convenience especially for in-store purchases, as we have discussed above. 

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6. Larger customer base

Anyone involved in business knows that success depends on how fast you can provide customers with what they need. 

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Data provided by Bitly, a link management platform, shows that QR codes are becoming more popular in the MENA region. Between H1, 2022 and H1, 2023, usage increased by 66%, more than any other region in the world. 

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Also, though India, Brazil, and China lead the way in terms of transaction volume, the Middle East is the fastest growing real-time payments market globally, according to ACI Worldwide. 

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If customers are demanding it, then it behoves you to provide it. Providers of QR codes payment can keep their current customer base and even expand it (as customers seeking more convenient payment methods can switch to a company from its competitors).

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In addition, the use of QR codes can help you improve customer retention and satisfaction. How so? QR codes are trackable which makes it easier for you to collect important data about customer purchase activities. 

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By analysing these data, you can better understand your customers and use the insights to improve marketing, sales, and customer engagement, among others.

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7. Cheaper payment infrastructure

“With QR codes, merchants can easily accept payments without the need for a physical card reader or register,” said Paypal. “They can simply create their own code using a QR code generator, potentially saving valuable time and money.”

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In essence, “minimal infrastructure and equipment are typically needed to set up QR code payment acceptance,” according to Patrick Mutabazi, a technology consultant with iZip Advisory Consulting. “By not purchasing or maintaining conventional point-of-sale terminals, retailers can save money.”

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“Minimal infrastructure and equipment are typically needed to set up QR code payment acceptance. By not purchasing or maintaining conventional point-of-sale terminals, retailers can save money.”

8. Lower transaction costs

Since “every transaction that fails to post or requires manual intervention to resolve can cost a company between $50 and $60,” according to MasterCard, instant payments can help significantly reduce transaction costs. 

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Stripe also agrees that instant payments can “reduce the effort required to process payment transactions while still keeping transaction costs low.”

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How to enjoy the benefits of QR code-based instant payments in Kuwait

As we said in the introduction, QR codes payment have made it easier for all types of businesses to enjoy the benefits of instant payments (even while providing other benefits). 

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In Kuwait, Kem is leading the charge to offer QR code-based instant payments to businesses. 

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With the Kem app, you can send a money request to your customers in the form of QR codes. Customers can then scan these codes and transfer the requested sum to your account/wallet. 

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If your business is a brick-and-mortar store (restaurants, grocery stores, hair salons, etc.), you can also print your QR codes and customers can make in-store payments by scanning the QR codes on their Kem app. 

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With Kem, both e-commerce and offline businesses can enjoy fast and secure transactions that will lower transaction cost and provide convenience and ease to them and their esteemed customers. 

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[Do you want a single solution that will help you enjoy the benefits of instant and contactless payments? Download the Kem app and start receiving instant and contactless payments from your customers through QR codes.]

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Takeaways

• Instant payments can be completed within seconds, allowing businesses to quickly access money sent by their customers.
• Instant credit transfer is convenient, cost-effective, and safe for both payer and payee. 
• QR codes payment is both a form of instant payment and contactless payment, providing businesses with the benefits of both worlds. 
• It is cheaper to set up a QR codes payment system than a typical POS terminal even as it offers more advantages than the later.