QR codes leading the way for future payments
Banks leap into the future with QR code sales and app-based loan approvals as they withdraw from bricks and mortar storefronts
IT’s lunchTIME at the Siam Commercial Bank headquarters canteen and a lot of hungry people lined up in a long queue are peering down at their smartphone screens. At a first glance, they appear to be chatting or socialising via social networks, but in fact they are opening a mobile application as they prepare to pay for their food once they reach the front of the line.
The scenario plays out daily at this canteen. Thana Thienachariya senior executive vice president and chief marketing officer at Siam Commercial Bank Public Co Ltd (SCB), recalled the company’s first trial after launching its QR code, “Mae Manee”, at its canteen in October 2017. Only eight per cent of total transactions used the QR code option.
SCB decided to force a conversion by allowing only payment by QR code at the canteen. As the result, the total spending at the canteen immediately crashed 30 per cent. The restaurants were, of course, not happy. A different approach was clearly required. “So, we turned to using a ‘carrot and stick’ strategy to convince employees to use the QR code as their main type of payment at the canteen by offering promotions and creating brand value for the QR code under the ‘Mae Manee’ restaurant label,” recalled Thana.
“The total sales volume turned back to normal.” And the company now uses the canteen as a laboratory to test QR code marketing ideas, Thana added. Around 80 per cent of total transactions – average of around Bt150,000 to Bt160,000 per day – were paid through the QR code in January. At the SCB canteen, named “Ruen Mae Manee” (Mae Manee’s house), there are 22 restaurants providing food and beverages for about 3,000 people each working day, 70 per cent of whom are SCB employees. Success at its canteen inspired SCB to deploy the entire Ruen Mae Manee (Mae Manee’s house) concept, including restaurant decoration and the QR code payment solution, at other food courts. SCB takes a strategic approach to deploying their QR code payment system.
They focus on four groups of venues: university cafeterias including Chiang Mai University, Khon Kaen University, and Kasetsart University; shopping centres including Platinum Fashion Mall and The Mall’s Gourmet Markets; markets including Chatuchak Weekend Market, NiNJa Bazarr night market in Chon Buri; and Shell oil stations. Planning is underway to expand to 20 restaurant chains including Bar B Q Plaza (now under negotiation), and hospitals. “We focus on community malls nationwide, universities, and food street merchants that contribute both numbers of transactions and public awareness,” said Thana.
SCB is aiming for 1 million shops accepting QR code by the end of 2018, an ambitious increase from the current 300,000 shops. The planned leap requires SCB to expand its retail customers while also having financial data about them. The bank could then initiate and develop new innovative products to specifically target segmented customer groups. The bank could instantly approve customer loans thanks to the power of big data analytics. “From the launch until now, around four months, transaction are around Bt1 billion and around 65 per cent of payers are SCB’s customers [using SCB Easy app],” said Thana.
“We can make loans to these people because we can follow their transactions. That [instant access to customer details] helps us to offer new way of lending to small retail banking customers. The QR code payment system helps us to know our customers.” Next up is to expand adoption of the SCB Easy app, increasing uptake from the current 6 million or so users to 10 million by the end of 2018.
SCB’s total retail customer count is now around 14 million. “We do not compete with banks but we are now competing with giant platforms including Facebook, Line, Joox and so on. We need to have at least 10 million customers we daily interact with on the digital platform.” The company aims to be a medium-sized platform that adds new businesses to those already on-board. Smaller platforms with fewer than 10 million customers would be unable to survive in the future, said Thana. In the future, banks will be accessible far beyond their bricks and mortar buildings, with as many services as possible pushed onto digital platforms and accessible by smartphones.
Merchants will benefit from QR code as it helps them reduce the cost and time needed for cash management and reduce the risk from carrying cash. They would also have increased opportunities for easier access to financial services, especially getting bank loans. Meanwhile, the bank will customise interest rates for different customers according to their financial information.
“Banks will have better credit scoring that allows them to provide loans to large numbers of people without collateral, but uses financial information, and their ability to incur debt, through big data analysis,” said Thana.Nantharat Thuamthiasong, a beverage shop seller at the “Mae Manee” restaurant, said that QR code payment helps him to more easily and quickly provide beverage service to customers, especially in the lunchtime rush hour. “We do not need to scan cash cards or return the change, but just scoop ice and bring water, – and that helps us to offer services to more customers at certain periods of time,” said Nantharat.
Jirat Sirirattanatakool, owner of Cha Wang, a famous Southern food shop located at Mae Manee restaurant, said that QR code is a very convenient way to receive payment. Cha Wang receives over Bt30,000 per day, mostly paid via QR code. Another giant bank, Kasikornbank (KBank), is also focusing on cashless payments through expansion of its mobile app and QR code payment system.
Patchara Samalapa, senior executive vice president, of Kasikornbank, said that with their K Plus QR code and mobile app, the bank is aiming to build big data analysis to help them understand customers’ needs and lifestyles. Kbank is planning to bring innovation and technologies to offer machine lending and machine commerce in the future. To achieve this goal, it is repositioning its mobile app, K Plus, which now has 7.5 million users, to be a “Lifestyle Platform” offering the full gamut of lifestyle solutions for all customers, while satisfying retail clients’ requirements and creating new opportunities for small businesses.
K Plus now has 3 billion transactions a year, Bt6.3 trillion in transaction value and 7.5 million users, 80 per cent of them regular users. KBank aims to increase the number of K Plus users to 10.8 million within 2018. It now has about 800,000 merchants using QR code via their K Plus Shop, with 1.4 million transaction items and totalling Bt1.1 billion.
It aims to increase to one million merchants by the end of 2018. The bank’s strategy is to focus on selective marketing to reach corporate customers such as cafeterias in courts and Siam Cement Group (or SCG) cafeterias. It has also worked with PTT to offer QR code payment services for all retail transactions at PTT gas stations, including at Cafe Amazon, Texas Chicken, Daddy Dough, Huasenghong Dimsum, Fit Auto, and Jiffy. Additionally, KBank will in March introduce an e-marketplace through a mobile app called Shopping on K Plus.
It will be the first e-marketplace in Thailand where customers could select a diverse range of goods on a mobile banking app (K Plus), including agricultural produce from the Pruanfun project and farmer groups across the country, products from small retailers and SMEs, and other merchandise from KBank’s business partners. KBank is planning to feature more than 30 million products via K Plus, with a total Bt600 million turnover made via this e-marketplace within one year of its introduction. Moreover, KBank is planning to use big data to analyse business issues and streamline the back-office processes in order to upgrade its service potential.
Patchara said that important tasks include data analyses, efficiency enhancement of risk management, and improvement of personal and business credit extension, in order to satisfy the desires of each customer segment. It has also launched the K-Personal Loan service via K Plus – a personal loan service via a mobile banking app. KBank uses a system that calculates interest rates by taking into consideration the risk factors of each individual customer to customise and offer loan products via the K Plus application. It has now started testing the system with a group of pre-qualified customers with appropriate creditworthiness.
The customers can enter the amounts that they want to borrow, and the system will show their credit limits. After a customer click in agreement, the loan funds would be wired to their accounts immediately. KBank has also recently developed a Social Payment function to enable sellers to receive payments instantly from their customers via social media platforms such as Facebook, Messenger, Instagram, Line and WhatsApp. The merchants simply send their QR code bills, so that customers can pay for goods and services via K Plus or other mobile banking application of any commercial bank.