QR code and NFC come into direct conflict. Why is NFC, which has higher technical content, more passive?

　　From the late 1990s to the early 2000s, QR code and NFC technologies were born one after another. In the following years, the two technologies developed steadily without any disputes. It was not until around 2011 that, with the popularization of mobile Internet, QR code and  NFC  as emerging payment methods began to compete in the field of mobile payment. Let's follow the editor of Analog Electronics to learn about the relevant content.

　　Of the two technologies, NFC  is more complex and offers a more "technical" experience. However, in the wave of mobile payments, the relatively low-cost QR code has fully utilized its advantages, quickly seized the NFC payment market, and is likely to develop into the absolute main force of mobile payments.

　　The offline subsidy war is in full swing, and in 2017, QR codes have brought the flames of war to the field of public transportation.

　　Since August 20 this year, Beijing Metro has started to pilot the promotion of QR code boarding. Currently, the Airport Line already supports the "online ticket purchase, offline ticket collection" service, that is, passengers can buy tickets in advance on the app and then pick up tickets to enter the station and board the train just like buying movie tickets.

　　According to official introduction, starting from September 20, passengers can directly scan QR codes to enter and board the train at some stations, further eliminating the need to pick up tickets. It is expected that by the first quarter of 2018, all lines and stations in the Beijing Metro network will be able to use mobile phones to scan QR codes to enter and exit the station.

　　It is worth noting that just a few days ago, on August 14, the official microblogs of Beijing Subway and Beijing Municipal Transportation Card successively announced that "Beijing Metro supports mobile phone swiping for riding" and that mobile phones equipped with NFC modules (need to support the card service or use NFC-SIM cards) can achieve the same functions as bus cards. After years of development, the mobile phone card function has finally been officially "formalized".

　　In fact, before this news was announced, whether it was the various Pay applications promoted by mobile phone manufacturers or the NFC-SIM cards led by operators, the function of "swiping mobile phones to ride" had already been realized, and it was realized on the existing gates. Therefore, this official statement is more for the strategic purpose of promoting mobile phone all-in-one card, and Geek Park also interpreted it at the first time.

　　The Beijing subway has provided a battlefield for the two technologies, namely, the pilot QR code for riding and the promotion of mobile card. In fact, the competition between QR code and NFC in mobile payment is still going on, and the close combat in the field of public transportation is inevitable. The Beijing subway is only a partial microcosm of this war. Behind it, there is actually a confrontation between the two technologies in the field of mobile payment.

　　First round: The winner is not the "technical flow"

　　Apple Pay officially landed in China on February 18, 2016. On that day, many iPhone users went to Starbucks or McDonald's to try out the new "swiping mobile phone shopping" experience.

　　With this as a node, more and more people began to pay attention to NFC payment. Other mobile phone manufacturers followed suit and launched their own Pay applications, starting to get involved in the payment and settlement field. Although UnionPay has been promoting the same payment channel "Quick Pay" for many years, the trend led by Apple Pay quickly became a positive force, allowing NFC technology to finally compete with QR codes in the field of mobile payments.

　　In terms of payment technology, NFC is undoubtedly advanced. The experience of "touch and pay" is natural and efficient, and it can be perfectly integrated with smartphones. For a time, NFC payment has almost become a standard feature of mid-to-high-end smartphones, and the public's attention has also increased a lot.

　　However, despite the rapid development of mobile phone manufacturers, the problems that affect the popularization of NFC payment have not decreased at all. First of all, NFC payment relies on the implementation of mobile phone hardware (NFC radio frequency antenna, SE security module, etc.), and also requires the support of merchant-side equipment, which brings it a high deployment cost.

　　In addition, although current data shows that nearly 70% of POS acceptance terminals in the country have NFC payment capabilities, due to the existence of a large number of small and medium-sized merchants that lack POS terminals and training, consumers have repeatedly encountered difficulties when using NFC payment, resulting in a decline in usage rate.

　　On the other hand, QR code can run on almost all mobile phones, and the hardware cost and hidden cost of merchant access are lower. With lower entry and usage thresholds than NFC payment, coupled with the stimulation of red envelope subsidies, QR code payment quickly completed the education and penetration of the market.

　　As more and more street vendors put up QR codes with payment information printed on A4 paper, it also means that QR codes are widening the gap with NFC payments in terms of market share.

　　According to the "China Third-Party Payment Mobile Payment Market Quarterly Monitoring Report" released by iResearch in the first quarter of 2017, Alipay and WeChat Pay together accounted for more than 90% of the transaction share in the mobile payment market.

　　In the first round of offline shopping payment competition, although NFC occupied the high point of technology and was promoted with the help of "powerful teammates" such as Apple, QR codes quickly established their advantages with lower deployment costs and quickly penetrated into different application scenarios across different hardware and platforms.

　　Offline supermarket shopping is not all about mobile payments. When it comes to this round of public transportation payment competition, the resources available for allocation by both sides have changed again, and the whole battle has fallen into a stalemate again.

　　In the second round, QR codes are penetrating into NFC’s advantage areas

　　Different from the various obstacles encountered in offline shopping scenarios, the public transportation field can be said to be the real home field of NFC payment.

　　The essence of the mobile phone card is to simulate the physical bus card with the mobile phone. As long as the background access work is completed, the receiving end (gate machine, card reader) hardly needs any modification. While ensuring the original usage habits (you can swipe the phone directly without unlocking it), the mobile phone card also brings many conveniences.

　　For example, the air recharge function is very convenient, the virtual card solves the problem of anonymous card loss, and a mobile phone can also carry bus cards of multiple cities, which is also very attractive for business travelers. Currently, mobile phone manufacturers (various Pay applications based on eSE security modules) and operators (NFC-SIM cards launched by China Mobile and China Unicom) have provided relatively complete solutions to choose from, and also provided some preferential measures in payment (such as reducing card opening fees).

(Xiaomi Mi Pay's public transportation function)

　　According to official data released by Beijing Metro, within one month of the pilot, the number of new mobile card applications reached 200,000, with an average daily transaction volume of 200,000, a 200% increase from the previous month. At the same time, the current daily transaction volume of mobile card accounts for only about 2% of the total daily transaction volume of Beijing Metro, indicating that there is still considerable room for growth.

　　Public transportation is not an easy market for QR codes, as there was no technical accumulation or layout in this field before. However, QR codes still took the initiative to attack - relying on the huge potential energy generated in consumer habits in the past few years and the existing payment system, QR codes are penetrating into NFC's advantage areas.

　　When it comes to QR code ride-hailing, Alipay and WeChat remain active promoters.

　　Alipay currently supports bus cards (partial routes) in Wuhan, Hangzhou and Qingdao, and the applicable cities for "Alipay QR Code" include 11 cities including Jinan, Huzhou and Shaoxing; the WeChat mini program "Tencent QR Code" already supports three cities, Guangzhou, Zhumadian and Qingdao, and the mini program "Shenzhen Citizen Pass" also provides the function of QR code boarding.

(Alipay’s QR code ride function)

　　The situation in Beijing is rather special. Although the QR code functions of Alipay and WeChat have not been introduced, the Beijing Metro official has cooperated with the Yitongxing App. The specific development situation has been briefly introduced above.

　　The biggest advantage of using QR codes to ride the bus is that it can be linked to the user's commonly used payment account, eliminating the steps of opening a separate bus card and storing value (retention). The "ride first, then deduct money" logic is in line with existing usage habits and can avoid some problems caused by the anonymous bus card.

　　But the biggest problem with QR code rides is its low efficiency. Although some systems now provide shortcuts to quickly open the payment page (such as 3D Touch on iOS and fingerprint recognition on some Android phones), the steps for calling out QR codes are generally cumbersome and obviously cannot compare with the "silent working" NFC.

　　In addition, QR code boarding requires the modification of existing gates and card readers, and there are many factors that affect the success rate of recognition, such as the distance and angle of scanning, and the brightness of light.

　　If these problems are not solved well, it is easy to cause congestion at the gate during peak hours. This also explains why the current QR code riding pilot is mostly carried out on buses with lower passenger flow and easier transformation.

　　In the last round of competition, the popularity of NFC technology was severely limited by the overall deployment cost, and in the field of public transportation, QR codes are about to face the same problem. In terms of usage habits, NFC is in line with the usage habits of traditional public transportation cards, and QR codes are in line with the public's "cashless" consumption habits, but the former has more advantages in efficiency.

　　In terms of usage cost, NFC still cannot avoid the hardware cost of the mobile phone, while QR code can continue to maintain its "zero cost" advantage.

　　The future evolution of QR code travel will be: Subway will start with "QR code ticket collection", first solving the pain points of queuing and change when buying tickets, and then transition to QR code entry and exit. For public transportation, priority will be given to the transformation of routes with low passenger flow, while retaining the card reader and adding the function of scanning code, gradually cultivating user habits.

　　It should be noted that there is a booster and a hidden danger behind this. The booster is the marketing activities such as "Cashless Day", "Cashless Week" and even "Cashless City" currently promoted by WeChat and Alipay, which also have a positive role in promoting the popularization of QR code riding. The hidden danger is that QR code riding cannot bypass the existing bus groups, and the standards and specifications vary across the country, so there will be some resistance in the settlement method.

　　Close combat between two "half-time masters"

　　Although QR codes and NFC are currently competing head-on in mobile payments, it is interesting that both of them are "latecomers" in the payment field, and no one would have thought that these two technologies would intersect in the payment field at first.

　　The emergence of QR codes is because the information density of one-dimensional codes can no longer meet commercial needs, so storing information in both horizontal and vertical directions brings about the concept of "two-dimensional". NFC technology is derived from contactless radio frequency identification (RFID), adding richer interactive functions in addition to card reading and writing.

　　Essentially, the birth of QR code and NFC technology is due to the need for higher-dimensional information transmission. Electronic cash transactions are also a form of information transmission, a medium for connecting users and services, so the two have gradually become new means of payment in the evolution of technology.

　　NFC: In 2009, China Mobile conducted a pilot program for mobile payment services in 10 provinces in China. In 2011, the central bank launched the migration of IC card chips nationwide. In 2012, the 13.56MHz solution led by UnionPay was included in the national standard, and NFC payment after the unified standard began to enter the mainstream vision.

　　In the past 7 or 8 years, operations and UnionPay have always been the active driving force behind NFC payments, but the entire market was ignited by the emergence of various mobile phone pay services.

　　QR code: In 2011, Alipay launched the QR code payment service. In 2013, WeChat version 5.0 also added the QR code payment function. With the popularity of taxi apps, the early growth of QR code payment was also driven.

　　In August 2016, the Payment and Clearing Association issued the "Barcode Payment Business Specifications" (draft for comments) to payment institutions. This was the first time that the central bank officially recognized the status of QR code payment after it stopped QR code payment in 2014.

　　It can be seen that the competition between NFC and QR code in the payment field began around 2011, which was also the time when smartphones and mobile Internet entered the mass market. As mobile phones began to generate more consumer behavior, the centripetal force formed by the masses began to pull the two technologies onto the same track.

　　The discussion about the advantages and disadvantages of QR code payment and NFC payment has never stopped.

　　In addition to the technical differences, behind the two mobile payment methods is also a game between third-party payment licenses and the central bank and UnionPay, as well as the conflicts of interest between mobile phone manufacturers and payment institutions. Therefore, it is impossible to end the tense situation on this battlefield in a short period of time.

　　In the foreseeable future, QR codes and NFC will continue to develop in parallel in the field of mobile payments, constantly creating sparks and then returning to their own tracks, and eventually forming a complementary relationship in the market.

　　Although NFC has many technical advantages, QR code provides lower usage costs at the software level, breaking through the hardware barriers and gaining rapid popularity. Whether the same tactics of QR code can be replicated in the public transportation field and gradually occupy the market will be the most noteworthy aspect of the competition between the two payment methods.

　　Another angle to observe is that whether a technology can be popularized or not, the advancement of the technology itself is only one of the dimensions of judgment. The overall deployment cost and market acceptance may be more core influencing factors. Looking back at the process of QR code, a "low-tech" technology, gradually seizing the market, rethinking about "outdated technology" is also very valuable for us to further understand the advancement of technology.

    The above is the introduction about the two-dimensional code and NFC in analog electronics. Why is the more technical NFC more passive? If you want to know more related information, please pay more attention to eeworld. eeworld Electronic Engineering will provide you with more complete, detailed and updated information.