QR Codes To Boost Cross-Border Commerce As The World Reopens For Business

For a lot of firms, the pandemic was an excuse to hit the pause button on building out their cross-border payment ambitions. It didn’t stop them entirely, Limonetik CEO Christophe Bourbier told Karen Webster, but it did deprioritize them in light of the fact that the travel segment had stalled out, and a lot of firms could not see the point in making Alipay an option for Chinese tourists and businesspeople when neither group was traveling at all, for example.

But with the world reopening and people on the move again, that hesitancy has been replaced by newfound urgency.

“Now what we hear is, ‘Oh, let’s make this happen very quickly,’” Bourbier said. “‘I know we stopped for a year, but now we have to make this happen for tomorrow.’ So, there is a lot of energy around cross-border payments.”

That energy is somewhat driven by the fact that people are moving around the world again, but not entirely so. The shift, instead, was largely driven at first by the pandemic and the changing shape of consumers’ habits worldwide around digitization. Cross-border payments are part of it, but it’s a larger-picture story about the new tools and preferences consumers and businesses worldwide have developed around shopping and paying, he said.

That means the cross-border payments market is coming back, but different than it was before as it evolves into its role in a world that has become more digitized and is likely to remain that way for the foreseeable future.

The Changing Consumer and the QR Code

In many ways, we are seeing consumers start to move around the physical world again, in big ways like travel alongside smaller steps like returning to shops. But what is observable, Bourbier noted, is how many are holding on to the “digital friends” they have come to rely on over the past year — “their iPhone and the contactless payment methods they have discovered during the pandemic.”

All over Europe and Africa, nations have their individual payments schemes designed to make it easier for consumers to transact online. What the pandemic created was consumer demand for those digital payment methods to extend themselves into stores and the real world of physical transactions, he said. As a result, QR codes have exploded as a simple way to move those transactions offline from online.

He said merchants have realized that they have to shift to QR codes because that’s what people want them to do. Consumers all have mobile phones, and all want easier and better ways to pay.

Moreover, he explained, contactless technology enabled by the QR code is the first step to the bigger accomplishment in the physical retail space: getting rid of the checkout line. Once consumers can easily use the phone in their hand to scan a code and go, the concept of lining up in a central area and waiting to check out seems more and more “outdated” and “ridiculous.”

“When you are online, you never wait to pay,” he said. “If you think about it, waiting to pay is absolute nonsense. And so, what we will see in shops is that the experience offline is going to become more like the online checkout experience — less and less present, and more and more seamless.”

The Exploding B2B Opportunity

Although business-to-consumer (B2C) payments have advanced in both the cross-border and domestic realms, the bigger if less talked about story is the under-the-hood changes happening in the business-to-business (B2B) space when it comes to the digitization of payments. It’s already a $33 trillion market, Bourbier said, and it’s growing faster than its B2C counterpart.

What’s happening there, he said, “is like getting a chance to experience the excitement in the B2C markets 20 years ago when shops started experimenting with going online and this weird new idea of ‘eCommerce.’ It’s exciting to relive a redux of that experience and see the market starting to develop complex products that actually would have been unimaginable five years ago.”

B2B payments are coming out of the Dark Age of SWIFT transactions that take days to arrive and settle through black boxes that make it impossible to know when exactly they are going to arrive, he said. Cards-based payments offer an alternative, but one that is often expensive considering the massive transactions that often pass between firms.

“What we see at the same time as those B2B payments are all shifting online is there are also a lot of B2B types of payments that are being invented and that are being launched on the market that can answer the need to be able to do large-value transactions across borders,” Bourbier said.

There’s a lot of room for innovation here, he noted, and an ever-growing stock of demand — and the innovations are only starting to roll out.