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Why Replace QR Codes With Data Over Sound?

QR Codes’ High-Risk Shortcomings Open the Door to Alternatives

The Covid-19 pandemic has accelerated the shift to contactless transactions and authentication. Doing so not only applies to health concerns but also ease of use. With QR codes, for example, customers can simply scan their phones to pay or verify information, rather than fishing in their wallets for credit cards and deciphering chip readers.

But while many companies are moving to mobile ticketing and payments systems that use QR codes, this method may not be the most secure or efficient. Other options, such as data-over-sound from LISNR, can offer a simpler and more secure transaction than how QR codes are being used today.

In this article, we’ll explore the following:

  •   How are QR Codes being used?
  •   Why do QR codes pose security risks?
  •   What are the usability issues with QR codes
  •   Why use data over sound over QR codes?

 

How are QR Codes being used?

Following their release to the public in 1994, QR codes have been adopted into such uses as launching applications and web pages on mobile devices as well as mobile boarding passes for airlines.

More recently QR codes have made their way into the area of mobile payments. In China, WeChat Pay and Alipay have launched and are expanding QR code-based payments, wherein 2020 85% of payments were made by scanning a QR code . In India Unified Payments Interface (UPI) payments using QR codes generate over 250 million transactions per month.

There has also been an expanded usage into local transit. One example is the Delhi Metro Rail Corporation QR code ticketing that launched in 2018. Riders can buy tickets on their phones and then scan a QR code instead of a physical transit card or inserting a token to enter the gates to ride.

The adoption of QR codes in these markets seemingly has taken off, but companies utilizing this technology are now looking for alternatives due to risk and usability factors. They are finding that the cost of overcoming these issues outweighs the savings of using a widely available technology.

 

Why do QR Codes pose security risks?

While QR codes have their place serving several applications, their adoption into payments and mobile transit ticketing is proving to be a big security risk. These risks are based on the general simplicity and availability of the technology. More specifically QR codes can be created and read by anyone, and duplication is as simple as taking a picture. That simplicity in technology has contributed to $18.5 million in stolen funds from QR code scams internationally in 2020. 

 One of the top QR code scams involves phishing. With phishing, cyber-criminals will present a QR code in a way that makes consumers think that they are scanning a legit code. In actuality, the hacker’s QR code is a sort of “trojan horse” that drives a link to malware through websites or downloads. This type of scam was captured in a recent 2021 article by McAfee.

 As McAfee notes, restaurant owners, for example, might download an app that pretends to generate QR codes but instead steals that owner’s data. “Once a hacker gains access to the restaurant’s customer database, they can use this information to launch phishing scams under the guise of our favorite local eateries,” the article states.

 These QR code scams are on the rise worldwide. In the eastern states of India there were 200,000 QR code fraud cases in 2020. This escalation is driving many companies in the region to seek alternatives to QR code, such as data over sound.

 

What are the usability issues with QR Codes?

In addition to the security risks that QR codes can pose, they also aren’t as easy to use as you might think. In theory, they speed up transactions, but that’s not always the case.

Some of the usability issues with QR codes include:

  •     QR codes currently require close proximity: While QR codes may be contactless, they still require the scanner and the code to be close together. That means social distancing may not be possible when a customer shows their QR code on their phone to check out at a store, for instance. Even when social distancing measures end, it may not always be practical or efficient to require this close distance.
  •     QR codes can be sensitive to light: Factors such as light can make it difficult to read QR codes. That’s why cashiers and ticket agents often have to ask customers to turn up the brightness on their screens to use QR codes.
  •     QR codes can be sensitive to motion: QR codes can also be sensitive to motion, so consumers may struggle to hold their devices still enough for the scanner to read the code right away. Or, the scan might not work on the first try because the mobile device is held at an angle, so it flips the orientation of the QR code right when a scan is about to occur.

 

As a result, QR codes can cause problems such as slow boarding processes and congested lines when used for ticketing. Plus, some transportation agents physically take a consumer’s phone in order to scan the ticket properly, which some passengers are uncomfortable with. These types of issues have prompted some shuttle and bus companies in India and other parts of Asia to turn to other means of ticket collection.

Meanwhile, merchants also run into issues, such as long lines due to slow payment processing. To try to remedy this, some merchants turn to more expensive technology, such as advanced QR scanners. These may work better but offer little differential value toward the overall fintech solution. Plus, expensive QR code scanners can be relatively large and reduce a retailer’s counter space, thereby decreasing their opportunity to place high-value items near the register.

 

Data over sound answers the calling for a more secure, easy-to-use transaction technology

As the name implies, data-over-sound technology works by transmitting sound between devices, which can be either audible or inaudible depending on how it’s used. Data over sound offers several advantages over QR codes, such as:

  •   Greater security: The data sent between devices for data-over-sound transactions can be encrypted and can use proprietary signaling to reduce the risk of duplication. Companies also do not face the same phishing threats, though it’s important to still only work with reputable data-over-sound software companies.
  •   Longer ranges: Depending on the use case, data over sound can work at much greater ranges than QR codes. Some types of data-over-sound technology can be used up to a distance of one foot between devices, while others can be used up to 10 feet and even beyond. That can allow for social distancing while also improving customer experience in non-pandemic times by reducing uncomfortable crowding.
  •   More efficiency: In addition to working at longer ranges than QR codes, data over sound provides more efficiency by being able to handle multiple transactions at once. For example, data over sound could be used to verify the tickets for multiple bus riders at once, thereby speeding up boarding times.
  •   Software-based: Data-over-sound recognition can be added through software and then embedded into mobile apps, websites or other systems. That provides benefits such as how merchants don’t have to give up so much valuable counter space for a physical scanner.

 

Start Leveraging Data-Over-Sound Technology with LISNR

LISNR’s data-over-sound technology helps retail, mobility, and many other types of companies facilitate fast, secure, contactless transactions.

LISNR works with companies like Shuttl, India’s premier office shuttle service, to help keep drivers and riders safe while delivering a fast, reliable boarding process. Testing shows that using LISNR’s data-over-sound technology can reduce boarding times by as much as two seconds per person, which can add up fast.

Retailers also benefit from using LISNR to support contactless payments. In many cases, payment terminal hardware already can support data-over-sound software, making implementation easy and cost-effective.

To see how your company can benefit by switching from QR codes to data over sound, get in touch with our team.