PayPal likely launched its QR feature now because the pandemic has made contactless options appealing to consumers and merchants
Business Insider Intelligence PayPal likely launched the QR feature now because of the coronavirus pandemic, which has made contactless options like QR codes particularly appealing to consumers and merchants.
Consumers are interested in using mobile apps to make payments and avoid contracting the virus, so they may be ready to adopt PayPal's new offering. Two-thirds of global consumers surveyed by prefer to use mobile devices to avoid interacting with humans and touchscreens at shops and other locations during the pandemic, so PayPal's QR code payments could attract consumers. And with 62% of respondents expecting to prefer using mobile devices for the same reason after the pandemic, PayPal's feature could attract consumers and volume for the foreseeable future. The feature will be competing with other contactless payment methods like contactless cards and NFC-enabled devices, but PayPal does have the opportunity to recruit its Because of this interest, merchants need to be able to accept contactless payments from mobile apps, and they may turn to PayPal's solution given its simplicity. Sellers just need a standard mobile device to generate QR codes to accept in-person payments via PayPal, potentially making the option more attractive than acquiring new point-of-sale technology to accept NFC payments. PayPal called out farmer's markets and people selling secondhand goods as merchants that might be particularly interested in using its QR code payments, suggesting it may be targeting small sellers with little-to-no payment acceptance technologies for the time being. But if the QR codes prove popular among consumers, larger merchants could elect to start accepting QR code payments via PayPal as well, especially since PayPal already has Rolling out QR code payments will enable PayPal to tap into brick-and-mortar payments, which still bring in the bulk of US retail sales. In Q1 2020, when the pandemic started to take hold in the US and push consumers to shop online, e-commerce sales still only made up 11.5% of US retail sales, per in future quarters as the pandemic continues, but in-store sales remain a lucrative opportunity and QR codes give PayPal an avenue to compete for them. And if PayPal can popularize its QR codes during the pandemic — especially as some merchants are — when there's a greater interest in avoiding contact with people and shared surfaces, it could rack up in-store sales when the pandemic subsides and retail's focus shifts back toward brick-and-mortar.Business Insider Intelligence analyzes the payments and commerce industry and provides in-depth analyst reports, proprietary forecasts, customizable charts, and more. >>, Business Insider Intelligence's expert email newsletter keeping you up-to-date on the people, technologies, trends, and companies shaping the future of consumerism, delivered to your inbox 6x a week. >>
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