04/2019 | Reading time: 7 minutes
The different ways of using QR codes are well-known in our country as well, but their significance has never been greater than in Asia, especially in China, where the use of the code is very diverse and, in some cases, quite astounding. But what is the significance of small squares? How to pay with QR code instead of cash, and why it has significantly increased the number of denunciations in China?
Over the past two decades, it has become well-known in the West as well that, if you travel to China, you should forget about websites and applications which are popular in Hungary, since the People's Republic of China (PRC) introduced the Chinese Golden Shield project (jindun gongcheng, 金盾工程), which actually made it impossible for Western Internet companies and websites to operate within the country. The programme functions as a state content management system, which is in practice, censoring content found on the Internet. The project was set up by the Ministry of Public Security of the PRC, the first plans were officially published in 1998. Due to the use of the firewall in China, all of Western applications that we use today have a Chinese alternative, so Chinese people use Baidu instead of Google, Youku instead of YouTube, Weibo instead of Twitter and Taobao instead of eBay. These – actually monopolistic – Chinese-developed applications have hundreds of millions of active users, and today they are far ahead of their western competitors in terms of development and diversity. Among the Chinese applications, WeChat (Weixin, 微 信), undoubtedly, has the most active users, and it is the most popular. The application, known by many people as Chinese Facebook or WhatsApp, was first released in 2011 and was developed by the large tech company, called Tencent Holdings Limited. This is a Chinese multi-purpose messaging, mobile payment and widespread social media application. In addition to the basic features, users can use the app to play, read news, pay bills, book appointments for various services, order food or taxi – and even donate for different organizations. The number of application downloaders is increasing year by year, as it was around 50 million users by the end of 2011, and by 2018 this number already exceeded 1083 million. WeChat has become the world's fifth most popular social media platform. The spread of the QR code in China is also largely due to the use of WeChat, as the application generates a unique QR code that serves as an ID code for everyone. Since WeChat can only be registered with a telephone number, the QR code is also assigned to a telephone number but it changes automatically in every minute, thus increasing the protection of personal data. By using the code, linking is much faster because, if two WeChat users get to know each other, they will not have to search for each other by name or ID number, but can also simply scan one another's unique QR code. The QR code reader is built into the application, so there is no need to download another application for this purpose. In addition to social media, the QR code can be used to identify people in many other ways, as it is used as an "access card" for many institutions and events, which instantly displays data and permissions of the user. In recent years, the Chinese government has launched several pilot programmes to enable citizens to use their own WeChat profile as an officially registered personal identity card, which is fully equivalent of the traditional version. The first pilot programme was launched at the end of 2017 in Guangzhou’s Nansha District, South China's Guangdong province, and, according to Xinhua, over 30,000 people applied for ID cards in the 24 hours following the launch of the project. The QR code is a two-dimensional barcode, actually a dot code, developed by the Japanese DENSO WAVE company, and debuted in 1994. The QR code is an open source, available for everyone. The relevant patents are owned by the inventor company, but the QR code can be used free of charge in accordance with the standard.
In addition to social media, in China one of the most important roles of the black and white checkered pixel pattern is mobile payment, as today we can pay almost anything via mobile from bus tickets to vegetables. It is well known that coins and banknotes used in cash circulation have a large number of bacteria, so the aspect of hygiene is also important for the country with a population of over 1.4 billion when it comes to the use of this modern technology. Some people talk about a cashless economy, as fewer and fewer Chinese people are using the physical form of payment; insomuch that sellers are not willing to accept the coins and bank notes from buyers in many places, so the People's Bank of China specifically warned each store last year that cash would remain an official payment method in the country, which must be accepted if someone wants to pay with it. Hungary also sees the potential in the new technology, as Chinese tourists spend much more if they use their digital wallets, as it is much faster and more convenient for them than cash payments. From this year on, in the Hungarian UniCredit card-accepting locations, Chinese tourists can also use Alipay, which is one of the most popular mobile payment solutions in China.
By using QR codes, we can pay for almost anything, and can even simply transfer money to our friends. Payment applications should be linked to our personal data in advance, but it is important to emphasize that these applications will not equal bank cards, as we first need to transfer money from our own card to the app. There are two ways to pay, but the QR code is essential for both. Customers show their own QR code and the seller scans it, or the consumers scan QR code of the product or service. In addition to practicality, there is danger in the fast and easy payment via mobile phone. In many cases, devices are manipulated by hackers to steal data, but often there were cases as well when fraudsters placed a QR code in front of the original one, leading to their own bank account, as the difference is not noticeable at the first glance. Service providers are constantly striving to make mobile payments as secure as possible. For example, at the end of February, Alipay announced that it would update its application with a new anti-fraud function, called Security Guard, by teaming up with 26 public security departments nationwide.
In China, we can pay via our phone almost everywhere using the QR code.
Nowadays, China has the world's largest and fastest growing mobile payment market. This is actually dominated by two huge service providers who have already been mentioned. The first one is Alipay (by its new name: Ant Financial Services Group, Chinese name: Zhifubao, 支付) established by Alibaba Group, the other one is the Tencent-operated WeChat Pay (Weixin zhifu, 微 信 支付) and TenPay (Caifutong, 财 付通). According to 2017 data, in the field of mobile payments, Alipay held a market share of 53.76%, while Tencent’s WeChat Pay and TenPay laid claim to the second largest market share of 38.95%. In 2018, the value of payments on the WeChat platform reached 333.9 billion yuans. The competition of these two giant companies is often referred to as "horse racing" in the press, because they share the surname, Ma (Ma Huateng is the CEO of Tencent, Ma Yun is the CEO of the Alibaba Group), which means horse in Chinese. The trophy they are racing for is nothing less than the No. 1 position in a digital economy that’s growing faster and evolving more dynamically than that of any other nation.
The Beijing Inspiry Technology Co. Ltd, established in 2002, is the QR code payment technology and tools provider for some of China’s biggest Internet companies, including WeChat, Alipay, UnionPay, Meituan-Dianping. The company's president is Wang Yue, dubbed by local media as ’the father of QR code;’ the exact translation of the Chinese name: two-dimensional bar code (erweima, 二维 码). Between 2005 and 2006, Wang and his team developed the Han Xin Code (Han xin ma, 汉信码), the first national QR-code standard in China. In 2014, amid the upsurge of mobile payments in China, the company created its first self-service QR code reader, the so-called Smart Box, also commonly referred to as the ’little white box’ (xiao bai he, 小白盒). The device rose to popularity largely because it is a cheaper alternative to the manual version.
If you hear the phrase, ’Made in China,’ you immediately think of cheap versions of all products, so, in fact, about the copy of these famous brands' products. This is not only the result of the maliciousness of Western people and the jealousy of some countries due to the huge Chinese exports, in fact, Chinese people are the most skeptical about the quality and originality of the goods sold in their country. When the question arises, why China is at the forefront of using QR codes, this skepticism is an essential point, as the country has long been trying to eliminate unfair or anti-competitive market behavior, and they place increasing emphasis on protecting lives and health and safety of the consumers. These monochrome codes help greatly with this problem, because for now, they also serve as a certificate for each product, so the customer can check them before buying. In addition, one of the features of WeChat can help you to find out if a product is available online for a lower price. It is of greatest significance in the purchase of various medical, food and cosmetic products. If the QR code on the product does not lead to the official website or does not contain the relevant information – in particular the Marketing Authorisation – the authenticity of the product is immediately questioned. Because of such cases, there are a lot of denunciations in China. In the pharmaceutical and food industry, the use of the DataMatrix two-dimensional code is more common, as it can be scanned in very small sizes, unlike the QR code.
In China, QR codes are frequently used for marketing purposes as well. Advertisements and posters show these codes, instead of websites, because they quickly lead to the information people are looking for. It is not uncommon for this code to appear on the clothing of those who work as advertisers at each event, so that more information about the product or service can be given.
In addition to the uses described so far, these codes also have some quite astounding uses as well. For example, it is more and more popular to use mobile payments at Chinese weddings. The couple just have to place their own QR code in a well-visible place, which leads to their bank account, and the guests do not have to worry about envelopes. In addition, homeless people can also collect money using QR codes. Furthermore, we can donate to churches easily with this method.
In many cases, if the collars of pets contain QR codes instead of microchips, it can help to identify them.
In abroad, Chinese-developed apps and mobile payment providers have not been able to achieve great success so far, even though there were plenty of attempts to do so with very high budget marketing campaigns in Latin America. For example, Lionel Messi and Neymar, and in India the most famous Bollywood stars were promoting WeChat. It is complicated to tell why mobile payment and, in general the use of QR code, is successful in some countries and somewhere else why they are not. In China, the use of bank cards were never so popular, so with passing this step after the cash payment, mobile payments spread straight away. Perhaps this may be one of the reasons for the huge success of this solution, as, from the user’s viewpoint, there has been a more significant change than to switch from bank card to mobile payment. The other reason is the mistrust of Chinese services and technology by Western people. Overall, however, digitalization has led to a massive transformation of Chinese economic and social habits in the last two decades, and the application range of QR codes there just keeps getting wider and wider.
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