Digital Payments

Pandemic Has Consumers Embracing QR Codes And Contactless Payments

While the global pandemic has taken a toll on almost every business, consumer demand for all things touchless is surging — and has even been a driver of growth for QR codes.

Although the 20-year-old technology has long enjoyed strong adoption in Asia (especially China), 2020 could go down as the year that U.S. merchants and shoppers fully embrace those ubiquitous square squiggly merchant codes.

For instance, Square just launched its QR-code driven Square For Restaurants platform, which allows customers to browse menus, place orders and pay for meals with simple scans from their phones.

And CVS in August became the first major retailer to introduce PayPal QR code technology, which it plans to roll out in its 8,200 U.S. stand-alone stores. The retailer said the move will allow customers to complete in-person transactions using PayPal or Venmo account balances or linked bank accounts or payment cards without the need to touch a keypad or present a payment card.

Such moves seem likely to win over consumers in the COVID-19 era.

PYMNTS and PayPal’s recent How We Shop Report found that more than one-third of consumers who prefer paying with QR codes say they won’t complete a purchase if that option isn’t available to them. The report found that consumers who prefer shopping with QR codes are among the most loyal users of all.

Such brand loyalty and user growth aren’t going unnoticed by merchants, with more and more expanding their QR offerings. It’s a business-boosting change that looks likely to remain even after the pandemic subsides.

It’s Not Just Customers That Want Them

PYMNTS and American Express recently found in a joint Small And Medium-Sized Business Reopening Report that brick-and-mortar retailers are working hard to create contactless environments that are safe for both consumers and employees.

The report found that workers and customers have both become wary of exchanging cash and using physical cards to make purchases. Shoppers also want to get in and out of stores as quickly as possible to reduce the time they spend in close proximity to others, making speedy purchasing methods essential.

But just like shoppers, many store employees also worry about the risks of handling cash and credit cards. The combination has prompted some businesses to outright ditch physical payment instruments and require customers to pay via a credit card on file and to tip via peer-to-peer (P2P) payment apps. Still others have more proactively worked to satisfy consumers and employees by adding touchless payment options that include QR codes.

If You Try It, You’ll Like It

Prior to the pandemic, few consumers had experimented with contactless payments at all. But since the great spring shutdown, many people have begun making forays into using the QR codes.

For instance, the PYMNTS/AmEx study noted that 30 percent of Americans made their first mobile wallet and contactless purchases during the pandemic’s early stages. And that rose to more than 50 percent of U.S. consumers who were using touchless payments by July. About one-third of shoppers now say that contactless payment options are their go-to method for making purchases.

Some consumers have even begun to consider the lack of touchless purchasing options to be a deal breaker, while others will think twice before shopping with merchants that do not provide contactless payments, the report found.

Nurturing the QR Code

The payment processors are also playing a role in boosting usage of this contactless trend. For example, PayPal waived transaction fees for QR code sales in May when it introduced QR codes to 28 markets worldwide.

“We know that in the current environment, buying and selling goods in a health-conscious, safe and secure way is front of mind for many people around the world,” John Kunze, senior vice president of branded experiences at PayPal, said at the time.

Adding to contactless payments’ increased uptake is the reality that the longer the pandemic lingers on, the more people get comfortable with new routines. For those who might think it’s too late in the COVID-19 cycle to suddenly start making changes, research would suggest otherwise.

In mid-March, the average consumer believed the pandemic would only last about five months. However, nearly seven months later, the typical consumer believes it will be another 11 months before the pandemic ends, which would put us well into 2021 and bring the pandemic era to nearly 18 months. Experts say that by then, it’s less likely that consumers will revert back to their pre-pandemic lifestyles.

Therefore, merchants looking to succeed in the coming environment need to provide things like contactless payments. Adopting touchless payment options and creatively enhancing QR codes’ functionality looks like a win-win for customers, employees and merchants alike.



New forms of alternative credit and point-of-sale (POS) lending options like ‘buy now, pay later’ (BNPL) leverage the growing influence of payments choice on customer loyalty. Nearly 60 percent of consumers say such digital options now influence where and how they shop—especially touchless payments and robust, well-crafted ecommerce checkouts—so, merchants have a clear mandate: understand what has changed and adjust accordingly. Join PYMNTS CEO Karen Webster together with PayPal’s Greg Lisiewski, BigCommerce’s Mark Rosales, and Adore Me’s Camille Kress as they spotlight key findings from the new PYMNTS-PayPal study, “How We Shop” and map out faster, better pathways to a stronger recovery.