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QR code payments have taken a big step towards becoming not only a mainstream payment option but also one that can accelerate the adoption of real-time payments. Early last month, the technology was used to facilitate a transaction over the FedNow network using the X9 standard.
The demonstration transferred funds in one second from a credit union to a Top 4 bank in the United States. During the test, a bill was presented to a payer with a merchant-generated QR code. Upon scanning the code, the payer authorized the transaction via the mobile app offered by the payer’s credit union.
Assisting in the transaction was technology from Matera, a fintech specializing in instant payments and QR code technology. Also involved were Tyfone Inc., a digital-banking and -payments platform provider, and real-time payments provider Payfinia Inc., a Tyfone company. The test comes as the volume of real-time payments has been climbing fast since FedNow’s debut in July 2023 (chart).
“This development unlocks the last mile of real-time payments,” Matera chief executive and co-founder Carlos Netto says by email. “It opens the door to a broad range of use cases, bill payments, in-store payments and ecommerce, all initiated by QR code and settled in real time.”
On a broader scale, the transaction shows that “financial institutions can offer a modern payment option where they control the experience, reduce costs, and deliver funds instantly,” Netto adds. “Ultimately, this payment QR Code can accelerate the adoption of instant payments.”
QR codes for payments are already mainstream in such countries as Brazil, China, and India. Now, “in the U.S., we’re seeing accelerating interest, especially for bill payments, restaurant tabs, and one-time purchases,” says Netto.
Key to making the transaction possible was the X9 payment QR code standard. Developed by the Accredited Standards Committee X9, the X9 standard introduces a common language for encoding payment data in “a secure, structured, and extensible way,” according to Matera.
As a result, a single QR code can work across multiple networks, such as FedNow as well as the automated clearing house and The Clearing House’s RTP (Real Time Payments) network. It can also work with different banks. The standard supports multiple use cases, such as consumer-to-business, business-to-business, and peer-to-peer payments.
“That flexibility is key, because it allows billers, merchants, and financial institutions to adopt one consistent QR format while routing the payment over the [network] rail that best fits the transaction,” Netto says.
Prior to development of the X9 standard, QR code implementations were fragmented, proprietary, or limited to closed-loop systems. “The X9 payment QR code standard is the missing piece that brings interoperability and scalability to instant payments in the U.S.,” Netto adds.
Enabling consumers to scan a QR code and pay using their existing banking apps provides frictionless entry into instant payments, as there is no need for consumers to download a new app or sign up for a wallet, observers say.
“We delivered a production-ready, QR-code-based instant-payment experience [that is] more than four times faster, simple for users, seamless for institutions, and built to work with any digital-banking platform or digital wallet,” Payfinia general manager Keith Riddle says by email.
Long-term, the X9 standard is expected to enable innovation while maintaining consistency, trust, and interoperability by allowing banks, credit unions, and fintechs to offer real-time pay-by-bank services using existing network rails, observers say.
“We’re entering a new era where instant payments aren’t just fast, they’re intuitive, embedded, and scalable within digital banking,” Tyfone chief executive Siva Narendra says by email.
