B2B Payments

AR Management Gets The QR Code Taken Seriously

Remember the QR code? You know, that weird-looking, black-and-white, pixelated image you can scan with your phone? When it first emerged in the U.S. market only a few years ago, it was largely seen as a novelty among consumers — a high-tech, flashy way for companies to get customers to visit websites.

Since, the financial services industry has looked to ways QR codes can bring new life — and new functionality — to the market. QR Mobile Pay is one of these players and, as a B2B payments player, is also a company taking a rare step in a new direction to ease corporate payments.

QR Mobile Pay has just launched QR Invoice, a way for businesses to create a QR code that, when scanned, generates a secure electronic invoice that can then be paid on the same mobile device a buyer uses to access the bill. PYMNTS had the chance to discuss the technology with Founder and CEO Kenneth Gay, as well as President Christy Noel, who each explained all about why the QR code, once a trendy method of advertising, is now headed towards providing new levels of security and convenience in B2B transactions.


PYMNTS: Can you give us an overview of what QR Mobile Pay actually does? What is it about the QR code that can bring a new element of security and usability into B2B mobile payments?

KG: I have a background in payments technologies like prepaid debit cards and other products, and QR codes are an extension of that. I saw QR codes as a means of meeting some of the attributes of security and ease of use, and I wanted to focus on it being a B2B application. That’s how we saw the vision for QR Invoice.

PYMNTS: QR codes have boundless potential for their application. Why did you choose them for invoicing?

KG: That’s a two-fold answer. Up until recently, people used the open source code to create QR code applications for websites and recipes. But the technology goes far beyond that simple use, and I saw a void in the business community as far as electronic ways of doing business in real time and with solutions that were secure and could be integrated into a variety of environments. In creating QR Invoice, one of the primary goals was to help business owners issuing an invoice collect their money electronically, especially for those companies delivering a product or a service where their delivery infrastructure consists of multiple vehicles and daily deliveries. They can cut down on the amount of reconciliation when it comes to drivers bringing back checks and cash and cut down on trips to the banks. And for the business making the payment, they have a means by which payment can be rendered, and a manager can be absent and still allow for the facilitation of payment. That was really key to what we were trying to put together.

PYMNTS: Can you talk a bit about the onboarding process for your business clients?

CN: We work together with our clients so their information can be synchronized with QuickBooks and shared — that’s a real plus for a lot of businesses already using QuickBooks. Companies can offer discounts by percent or by dollar amount, or add tax, and when they’re done, they can print or email out the QR code. A driver can have it on their tablet and can be scanned in any scenario. It makes it easy and convenient and mobile. The invoice is then presented to the buyer, who scans it using a QR reader app on their mobile device. They then receive the actual invoice on their mobile device.

The QR code is a one-time use code with a security PIN number used by the payer. Once it’s scanned, customers can select the button to pay now; they enter their PIN number for another level of security, and it asks them to choose their payment method, whether it be credit card, debit card or ACH bank transfer. They pay it, confirm it and not only is the invoice paid, it’s reconciled by our client in their accounting system. It shows up as having been paid. There is no collecting cash, no taking information back to a bookkeeper or accountant.

[bctt tweet="There is no collecting cash, no taking information back to a bookkeeper or accountant."]

There is no fraud, no theft of cash, no one scheming off the top. And there is no exchange of credit card information. In fact, our clients can’t even see the credit card number — it’s secured in the back end of the platform. There’s a great opportunity to a business that doesn’t want to leave a credit card with an assistant manager or whoever may be on duty at the time of payment. You can also assign PINs to different people within your organization, allowing a manager to go back and see who authorized a payment based on PIN number.

PYMNTS: It seems that you’ve put multiple security levels into this solution.

CN: Yes, that was important to us, because in the financial services space, we knew that was important to our customers and clients. If they were to scan a QR code again, it would say the code has already been paid. You couldn’t do anything with it if you wanted to.

PYMNTS: With what types of businesses are you hoping to gain traction?

CN: Because of Kenneth’s background [in the restaurant industry], we designed QR Invoice thinking about delivery companies — bread companies that need to deliver to a restaurant, uniforms being delivered to a hotel, etc. But in talking to people, we are discovering that there are all sorts of different ways it will work for businesses.

KG: One thing Christy touched upon is that I have a background in the food service space. It was through the combination of that and my payments background that I came into consulting. The last major restaurant group I worked with, the first thing they wanted to do was set up a budget. I assumed in doing so I would be able to enter into systems in which I could pay all vendors electronically, and not a single one was in a position to accept an electronic payment. And when I say not a single one, I could understand why the produce guy showing up in his van couldn’t accept an ePayment (even though I thought he should be able to). But even the bread vendor, a large, multimillion dollar company servicing all of greater Chicago, I was shocked to imagine they couldn’t either.

The other thing I’ve experienced is that if I was out running errands and a vendor showed up and I couldn’t leave a check, I hated giving my floor manager or a bartender permission to go into the register and pull out cash to pay them.

That’s why this is such a significant solution, in my opinion. The food services industry as a whole, because of all of the various people involved — the exterminator, the guy who leaves the uniforms and linens, the lettuce guy — there are a lot of guys. That’s really where we think there is strong potential in industries where there are deliveries being made in the field. There is a lot of potential in construction and automotive. A business doing a service for another company that involves weekly deliveries, that still wants the ability to reconcile activity. A lot of times, that level of business owner doesn’t want to take the time to set up an accounting system. Our system allows them to track all invoices, to know what’s past due, what’s paid and so on.

One other thing is the analytics. If I’m a business owner and I’ve got 10 or 15 trucks on the street, our analytics system shows in real time what codes have been scanned. I can see where a driver has been and what time he got there. It’s a great tool not only for that purpose but also to know how everything is progressing.

PYMNTS: Will the features you just mentioned help suppliers get paid faster?

KG: Yes, and I’ll give you one anecdote about that: There is a large produce purveyor that had committed to using our system. They were a $5 million company, and they averaged, every month, about $100,000 in either late invoices or invoices where the check bounced. One of the things this company was excited about with QR Invoice was that it would prevent it from ever having to take a bad check again. The company would rather not receive payment than take a bad check and go through the hassle of it bouncing.

The first in, first out payment process of the food services industry means that these companies may make a delivery, but they get paid today for a delivery they made last week. Our system can help manage all of that, and a lot of our clients ask whether it will help cash flow and give a more real-time, accurate feel for where they are in the accounts receivables space. And I think the answer to both of those is "Yes."

PYMNTS: What have companies’ reactions been once you present them with a QR code as a solution to some of their AR problems?

KG: When QR codes first came out, they were really just used for websites and recipes. We’re looking at it as a real, significant tool, a technological tool. The business owners who have seen demos of our solution are intrigued with it. They see how easy it is. I think that the "wow" factor is there, and once they get their head around how it will simplify things in their office environment, I think that will help us gain some traction.

[bctt tweet="When QR codes first came out, they were really just used for websites and recipes."]

PYMNTS: So, the QR code isn’t just a cool feature. It’s actually useful.

KG: Cool and functional!

CN: And secure!

KG: We don’t talk about this a lot, but we’re one of only a couple of companies in all of North America that has licensed a patent portfolio with Denso Wave, the inventor of the QR code. One of the patents in that portfolio is an encrypted QR code. It’s the only encrypted code in the industry. There are a lot of things we’ll be able to do with that technology in a payment space with future products that we think are really exciting.



About: Accelerating The Real-Time Payments Demand Curve:What Banks Need To Know About What Consumers Want And Need, PYMNTS  examines consumers’ understanding of real-time payments and the methods they use for different types of payments. The report explores consumers’ interest in real-time payments and their willingness to switch to financial institutions that offer such capabilities.