Weekly Update

While NFC struggles, QR codes slog on

We’ve been reading obituaries for QR codes for a few years now, but the technology has quietly continued to pick up steam in recent weeks. It’s being used to validate mobile tickets for a new tram service in Scotland’s capital of Edinburgh, to power a mobile ordering and payment system being tested at a handful of McDonald’s restaurants in Georgia, and to identify users and accept mobile payments in a recently updated app from the developer Scan. Those recent examples expand on the traditional mobile marketing deployments on billboards, in print ads and in retail locations.

Admittedly, it’s still tough to gauge just how successful those QR-driven mobile marketing efforts are. Recent figures from Scanbuy – which has a dog in this fight – indicate consumer uptake is clearly on the rise, but data concerning repeat usage and conversion rates is difficult to come by. Regardless, the progress of QR codes as a mobile marketing tool has been slowed by ill-conceived campaigns that place them on the back of buses or areas where no mobile coverage exists. And there are plenty of successful campaigns that illustrate how deploying QR codes wisely can establish and strengthen relationships between businesses and consumers.

Codes are filling the void

But much of the recent activity is due to the lack of traction gained by NFC, which not long ago was widely considered a tremendously promising technology for mobile marketing and proximity payments. Australia’s Suncorp Bank, for instance, recently opted to use QR codes and SMS for a new feature in its mobile banking app. QuickShare, as the feature is called, enables Suncorp customers to be paid by others regardless of if they are fellow Suncorp customers. The bank chose the older technologies because they helped create a simpler app that could be used by a broader audience, Suncorp executive Simon Clarke told ZDNet:

The main reason we’ve used [QR codes] is purely because of the standardisation. With NFC, ourselves and like a lot of other banks have looked into it and it’s a very complex piece of technology, and ultimately still in its infancy, especially in terms of cross platform usage…. We were a bit hesitant to go too far down the NFC path because we wanted to have something that had a high reach and was simple to use.

Apple’s unwillingness to package NFC in its iPhone has been a huge problem for the technology, obviously. Meanwhile, NFC-powered mobile payments systems such as Google Wallet and Isis Wallet continue to founder, shackling consumer awareness and adoption of NFC features in mobile apps. And aside from one memorably awkward commercial from Samsung plugging the Galaxy S III, precious little marketing has been done to explain the benefits of NFC to users. NFC still holds plenty of promise – IHS this year predicted the penetration rate of enabled handsets will increase four-fold from 2013 to 2018 – but its lack of usage among consumers continues to provide opportunities for NFC.

Ten good years left?

The creator of the QR code said last month that his invention probably has another decade of life, and that makes sense (although it’s probably a little optimistic). NFC-enabled apps will begin to catch on, Apple’s iBeacon and other systems leveraging Bluetooth low energy increasingly be used for indoor mobile marketing, and quality image recognition software may eventually become ubiquitous.

But 10 years is a long time in the fast-moving world of mobile – the iPhone, after all, just turned seven years old. QR codes are often considered something of a joke among techies, and they may never live up to the hype that surrounded them several years ago. When they’re deployed wisely, though, they allow businesses to build easy-to-use apps that can reach large audiences with relatively low costs. Retailers, marketers and app developers should be mindful of that even as they explore newer, sexier technologies.