Australians can now pay by QR code at Chemist Warehouse. The code will allow shoppers to input their bank details and pay directly, avoiding fees charged by Visa and Mastercard.
This rollout comes alongside the federal treasurer yesterday announcing a government ban on debit card fees.
RMIT finance and banking expert Dr My Nguyen says Chemist Warehouse’s introduction of QR code payments is a strategic move to avoid the high costs associated with card surcharges, which amount to millions annually.
The QR method, known as ‘Pay by Bank’, allows customers to make direct payments from their bank accounts by scanning a QR code, bypassing intermediaries like Visa and Mastercard.
‘The benefits of QR code payments are significant,’ said Dr Nguyen. ‘For retailers like Chemist Warehouse, they can substantially reduce transaction fees, which can be as high as 1.5 per cent for card payments. These savings can potentially be passed onto consumers in the form of lower prices.
‘QR codes can streamline the payment process, allowing for quick and easy transactions without the need for physical cards or additional hardware. The encryption of payment information within QR codes also enhances security, reducing the risk of fraud compared to card payments.’
Challenges
Dr My Nguyen says there are also some risks and challenges associated with QR code payments. Despite security measures, there is a risk of scanning fraudulent QR codes, leading to unauthorised transactions. Consumers may also be hesitant to adopt new payment methods, especially if they are accustomed to using cards.
‘Furthermore, QR code payments rely on smartphone technology and internet connectivity, which could pose challenges in areas with poor network coverage,’ he said.
‘Chemist Warehouse aims to reduce its annual $15 million expenditure on card surcharges by adopting QR code payments, thereby lowering operational costs and potentially passing on savings to consumers. This move aligns with global trends where QR code payments are becoming increasingly popular, such as Southeast Asia and India.
‘In Australia, several major retailers have already adopted QR code payment systems,’ said Dr Nguyen. ‘Muji, Vodafone, MJ Bale and L’Occitane have integrated QR code payments through ePay. Additionally, Commonwealth Bank, National Australia Bank, Coles and Woolworths have partnered with Eftpos to support the rollout of a new eQR payment system.
‘As more businesses recognise these benefits, we can expect wider adoption of QR code payments in the retail sector,’ he said.
Dr My Nguyen is a Senior Lecturer in Finance who specialises in market competition, empirical corporate finance, banking, sustainable finance and digital financial services.
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