QR Codes: Hype or Hip for Mobile Payments?

With the resurgence of the once dead QR code, we thought it would be good to take a closer look at their effectiveness. In particular, around their usage as a mobile payment solution. There’s no doubt certain benefits exist, but when it comes to their use for mobile payments, the risks seem to outweigh the benefits.

One of the biggest benefits of QR codes is they are relatively easy to create and deploy. This allows consumers to conveniently transact in a ‘card not present’ (CNP) scenario, with only a mobile phone in hand. Additionally, a customer’s payment data stays in the merchant’s system, and is not shared with the broader retail network, thus posing less of a security breach risk.  

QR codes, however, are still vulnerable to other security threats, namely “at tagging” attacks, which are a type of cyberattack that uses QR codes to access sensitive information. Further, QR codes might have a malicious URL embedded that takes the user to a malware site, thus compromising personal information, or routing the consumer to an unsavory experience. Last but certainly not least, the ability to ‘clone’ or replicate QR codes easily means that the user’s identity can be compromised and counterfeited — and used to an offender’s advantage.

Fraud is another area of concern, as an attacker can penetrate a provider/retailer using QR codes, and replace them with ‘weaponized’ codes that could potentially be used for electronic payments. This latest scenario would result in the offender receiving the payment, instead of the intended retailer. In fact, while QR code use in China has dramatically increased, the Central Bank of China recent capped mobile payments at $80 in response to fraud concerns.

The final area of concern with regards to QR codes is usability.  According to market research firm IDC broken screens are the number 1 cause of harm to handheld devices like smartphones and tablets. In fact, more than 95 million smartphones are damaged each year from drops. Cracked screens render QR codes unusable, and effectively block merchants and customers from potential sales, marketing opportunities, or even getting into concerts or transportation — costing real money and time.  

This all means the industry must look for a better, safer alternative tech for mobile payments. LISNR can be that solution, transforming mobile payments by delivering fast, seamless, reliable, secure and cost effective data-over-audio solutions. LISNR technology can:

• Support payloads with encrypted data
• Use standard speakers and microphones, eliminating hardware requirements
• Be embedded into your app quickly with our SDK
• Send data at speeds of up to 1,000 bits per second, all using only sound
• Work across a wide variety of smartphone and tablet models .

For these reasons and more, companies in the financial services space, such as Synchrony Financial and Amdocs, have partnered with LISNR to explore how the use of #dataoversound can bring innovation to their products & services.

To learn more about how LISNR can help you too fast-track to the future of mobile payments today, get in touch:

Contact us: http://lisnr.com/contact/