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System could save retailers billions lost through faulty inventory records
ScienceDaily Date:August 25, 2017
Source:Massachusetts Institute of Technology
Summary:Researchers have developed a system that enables small, safe, aerial drones to read RFID tags from tens of meters away while identifying the tags' locations. The system could be used in large warehouses to prevent inventory mismatches and locate individual items.
Radio frequency ID tags were supposed to revolutionize supply chain management. The dirt-cheap, battery-free tags, which receive power wirelessly from scanners and then broadcast identifying numbers, enable warehouse managers to log inventory much more efficiently than they could by reading box numbers and recording them manually.
But the scale of modern retail operations makes even radio frequency ID (RFID) scanning inefficient. Walmart, for instance, reported that in 2013 it lost $3 billion in revenue because of mismatches between its inventory records and its stock. Even with RFID technology, it can take a single large retail store three months to perform a complete inventory review, which means that mismatches often go undiscovered until exposed by a customer request.
MIT researchers have now developed a system that enables small, safe, aerial drones to read RFID tags from tens of meters away while identifying the tags' locations with an average error of about 19 centimeters. The researchers envision that the system could be used in large warehouses for both continuous monitoring, to prevent inventory mismatches, and location of individual items, so that employees can rapidly and reliably meet customer requests.
The central challenge in designing the system was that, with the current state of autonomous navigation, the only drones safe enough to fly within close range of humans are small, lightweight drones with plastic rotors, which wouldn't cause injuries in the event of a collision. But those drones are too small to carry RFID readers with a range of more than a few centimeters.
The researchers met this challenge by using the drones to relay signals emitted by a standard RFID reader. This not only solves the safety problem but also means that drones could be deployed in conjunction with existing RFID inventory systems, without the need for new tags, readers, or reader software.
"Between 2003 and 2011, the U.S. Army lost track of $5.8 billion of supplies among its warehouses," says Fadel Adib, the Sony Corporation Career Development Assistant Professor of Media Arts and Sciences, whose group at the MIT Media Lab developed the new system. "In 2016, the U.S. National Retail Federation reported that shrinkage -- loss of items in retail stores -- averaged around $45.2 billion annually. By enabling drones to find and localize items and equipment, this research will provide a fundamental technological advancement for solving these problems."
The MIT researchers describe their system, dubbed RFly, in a paper they presented this week at the annual conference of the Association for Computing Machinery's Special Interest Group on Data Communications. Adib is the senior author on the paper, and he's joined by Yunfei Ma, a postdoc in the Media Lab, and Nicholas Selby, an MIT graduate student in mechanical engineering.
Phase shift
Relaying RFID signals and using them to determine tags' locations poses some thorny signal-processing problems. One is that, because the RFID tag is powered wirelessly by the reader, the reader and the tag transmit simultaneously at the same frequency. A relay system adds another pair of simultaneous transmissions: two between the relay and the tag and two between the relay and the reader. That's four simultaneous transmissions at the same frequency, all interfering with each other.
This problem is compounded by the requirement that the system determine the location of the RFID tag. The location-detection -- or "localization" -- system uses a variation on a device called an antenna array. If several antennas are clustered together, a signal broadcast toward them at an angle will reach each antenna at a slightly different time. That means that the signals detected by the antennas will be slightly out of phase: The troughs and crests of their electromagnetic waves won't coincide perfectly. From those phase differences, software can deduce the angle of transmission and thus the location of the transmitter.
The drone is too small to carry an array of antennas, but it is continuously moving, so readings it takes at different times are also taken at different locations, simulating the multiple antenna elements of an array.
Ordinarily, to combat interference, the drone would digitally decode the transmission it receives from the tag and re-encode it for transmission to the reader. But in this case, the delays imposed by the decoding-encoding process would change the signals' relative phases, making it impossible to accurately gauge location.
All radio systems encode information by modulating a base transmission frequency, usually by shifting it slightly up and down. But because an RFID tag has no independent power source, its modulations are detectably smaller than those of the reader. So the MIT researchers devised an analog filter that would subtract the base transmission frequency from the signals that reach the reader and then separate the low-frequency and high-frequency components. The low-frequency component -- the signal from the tag -- is then added back onto the base frequency.
Frame of reference
At this point, however, another problem still remains. Because the drone is moving, the phase shift of the signals that reach the reader result from not only the drone's position relative to the RFID tag but also its position relative to the reader. On the basis of the received signal alone, the reader has no way to tell how much each of those two factors contributed to the total phase shift.
So the MIT researchers also equip each of their drones with its own RFID tag. A drone alternates between relaying the reader's signal to a tagged item and simply letting its own tag reflect the signal back, so that the reader can estimate the drone's contribution to the total phase shift and remove it.
In experiments in the Media Lab that involved tagged objects, many of which were intentionally hidden to approximate the condition of merchandise heaped in piles on warehouse shelves, the system was able to localize the tags with 19-centimeter accuracy while extending the range of the reader tenfold in all directions, or one hundredfold cumulatively. The researchers are currently conducting a second set of experiments in the warehouse of a major Massachusetts retailer.
Remember QR codes? Those blocky, black-and-white graphics that take you to a URL when scanned with your phone were everywhere from about 2011 to 2013. Brands splashed them across posters, put them in shop windows and integrated them into creative advertising.
But despite the ostensible usefulness of QR codes in linking the offline and online worlds, QR codes have since mostly died out, due to a combination of poor implementation, subpar technology, and a lack of native support for QR codes in smartphones.
In the meantime, QR codes have taken off in China in a way they never achieved in the west, where they’re used for everything from payments to exchanging personal details, proving that it’s possible to make a success of QR codes when they’re approached with a truly mobile-first mindset.
Since the demise of QR codes, we’ve managed to get by with things like shortened URLs, but nothing has quite lived up to the early promise of QR codes. However, a few resilient brands have proven that QR codes still have a role to play in mobile marketing – and with Google and Apple both having recently introduced native support for QR codes, signs are indicating that the time might be ripe for a QR code comeback.
Why did QR codes die out?
The principle behind QR codes is pretty solid: they’re effectively a gateway to the online world that you can open with your phone. A quick scan of the pattern and you’ll be taken straight to a webpage, with no fiddling around on a tiny phone keyboard trying to type in a URL.
Except that in practice, QR codes didn’t quite work like that. First of all, the early QR codes were extremely finicky about being scanned; you had to hold your phone perfectly still for quite some time in order for them to register, or the scan would fail. If you were moving, or the QR code was fuzzy or only visible for a short period of time, it just wouldn’t work.
Which made it a shame that a lot of brands and advertisers decided to place their QR codes in places that it was difficult to scan: alongside a moving walkway, for example, or on a distant billboard or train platform, or even underground, where there was no point trying to open a webpage even if the scan worked.
Image via WTFQRcodes ______________________________________
And that was assuming you got to the point of being able to scan a code: at the time of the QR code hype, no smartphones had native support for scanning QR codes, meaning that you needed to download a separate app just to be able to scan them – massively increasing the friction around something that was supposed to make the act of launching a mobile webpage quick and easy.
The lack of technological finesse behind QR codes, combined with the lack of native support, poor planning, and the fact that many QR codes also didn’t lead to a webpage that was properly optimized for mobile meant that the demise of QR codes was swift and inevitable.
Many industry commentators will insist that QR codes are dead for good, and that there could never be a convincing enough case to justify using QR codes over something like a short URL or Near-Field Communication. But we only have to look at China to see what can truly be achieved with QR codes given the right support.
Case study: QR codes in China
QR codes in China have effectively managed to succeed in every way that they fell down in the west. QR codes in China are convenient, quick and painless to use, lead to experiences and services that are designed specifically for mobile, and most importantly, they have native support via one of China’s most ubiquitous apps: WeChat.
WeChat is one of China’s most popular messaging apps, with more than 900 million monthly active users mostly concentrated inside the country. So when an app that’s installed on virtually every smartphone in China has in-built support for QR codes, you’ve effectively got native support for QR.
Add to that the fact that WeChat is much more than just a messaging app – it has in-built functionality for making payments, transferring money, hailing a cab, hiring a bike, and donating to charity to name just a few – and you start to see how WeChat became a game-changer for the uptake of QR in China. Scan a QR code with WeChat, and you can do almost anything.
Ecommerce, or more specifically payments, is one of the most natural uses for QR codes, and thanks to the integration of WeChat Pay (sometimes called WeChat Wallet), the payment functionality of WeChat, QR codes can be used in China to pay for almost anything. According to the Wall Street Journal, many Chinese users simply leave their wallets at home and use their mobile phones to make payments.
“More than 95% of China’s 731 million online population access the internet via their smartphones,” writes the Journal, “and half made offline, in-store mobile payments in 2016, according to a report released by the China Internet Network Information Center.”
Alipay Wallet, the mobile app from China’s most widely-used mobile payments provider, also supports QR codes, giving Chinese consumers another ubiquitous option for payments if for some reason they don’t want to use WeChat.
In a 2015 article for ClickZ on why QR codes have taken off in China, Sophie Loras detailed how WeChat’s messaging functionality has become a forum for brands to market to consumers.
“Brands [in China] are using QR codes to drive online to offline (O2O) sales, especially in retail. It’s not uncommon in China to see a poster at the entrance to a shop or near the cash register asking consumers to “add” them on WeChat.
“WeChat’s user appeal lies in its intimate and closed environment. For example, unless the user has agreed to follow a brand’s official subscriber account, the brand cannot send personalized and targeted content to them.
“Brands are also limited to sending just four direct messages a month to each follower. But it outlines why brands are so eager to increase their followers on WeChat through a QR code – better, and more direct, consumer engagement.”
Chinese brands have also used QR codes for everything from creating interactive marketing campaigns to helping to authenticate genuine products. In short, once you have the underlying support for QR codes, all sorts of things are possible.
But the QR code revolution in China came about through a specific combination of factors, most of which aren’t present in the west. So how could QR codes stage a comeback in other parts of the world?
Why the time could be right for a QR code comeback
One of the biggest things that separates China – and much of East Asia – from countries like the USA, the UK and Australia is a truly mobile-first mentality. Whereas western countries moved gradually from PCs to laptops and finally to smartphones and tablets, China went straight to mobile, and thus they approach the internet with a mobile-first – if not mobile-only – mindset. While we in the west have evolved much more slowly towards mobile, things have reached the point where brands need to crack a mobile-first approach to marketing or risk falling by the wayside.
QR codes could be the key to achieving this, and the environment for widespread QR code adoption is much more friendly now in 2017 than it was back in 2011. Let’s review the factors that led to the failure of QR codes four or five years ago, and examine how things are or could be different now.
Poor implementation and planning
A lot of the early problems with QR code marketing campaigns came from poorly-thought-out code placement, but this is one of the easiest mistakes to learn from.
If and when QR codes start to become more popular, brands need to learn from what didn’t work last time, and make sure the locations of their codes are conducive to quick and easy scanning. Of course, this would be aided considerably by:
Poor technical implementation
The early QR codes were extremely slow and finicky to scan, and required users to line up their smartphones exactly and hold them completely still in order for the scan to work. But technology has come a long way since then, and we could undoubtedly improve on our ability to scan QR codes in order to reduce a lot of the friction around using them.
In China, writes The Register, “in most cases a QR code will scan before you can blink, even when it’s poorly aligned, or moving, or on a fuzzy TV screen. And of course they’ve done the maths to make this work well – when you rely on QR codes this much, it makes sense to make them as painless as possible.”
It would take a bit of initial investment and commitment to developing the tech to make QR codes really great, but the case of China shows how worthwhile it can be.
Lack of mobile optimization
The mobile web has also come a long way since 2011, and brands are now much more mobile-focused in their mindset, and thus better placed to create truly mobile-optimized campaigns and experiences.
Lack of native support
This is the big one that will ultimately make or break a QR code revival. All of the other factors will come as long as there is an incentive to make QR codes work, but for this, you need some kind of native support for QR codes.
A couple of brands are already making a success of QR codes by integrating them with their existing mobile app. McDonald’s, for example, allows British consumers to order using its mobile app in select restaurants. After choosing their meal, customers ‘check in’ to the restaurant of their choice by scanning a QR code, which then confirms their order to the restaurant, who will start to prepare it.
US retail giant Walmart has also been a keen adopter of QR codes. It first introduced QR codes to its paper receipts which customers could scan using the mobile app, uploading them as a digital receipt from which they could then create a shopping list.
In 2016, it then launched Walmart Pay, a new feature of its app which allowed customers to use their smartphones to pay for in-store purchases by scanning a QR code at checkout. In a blog post entitled ‘ Open, Scan, Done: The Case for Walmart Pay’, Walmart wrote,
“We live in a digital world. We receive alerts about news breaking around the world in real time, rather than waiting for the Sunday morning newspaper. We can control temperature in our homes, lock doors and set alarms from our smartphones. So it’s time for the retail industry to step up – to allow customers to shop in new ways.”
Walmart certainly has the kind of clout that could get millions of shoppers used to using QR codes to pay for their purchases, but its app is still standalone, and doesn’t integrate with other apps or brands in a way that could allow QR codes to be used for payments outside of Walmart. So how are QR codes going to break out of these single-brand silos to become more widespread?
WhatsApp could be one way. With 1.2 billion monthly users across the globe, WhatsApp has a reach that is comparable to that of WeChat (if not as geographically concentrated), and it is working on implementing some of the features that make WeChat such an omnipresent part of daily life in China.
For example, it is reportedly due to roll out a payment functionality – and it already has QR code scanning built-in thanks to WhatsApp Web. If WhatsApp (or more accurately Facebook, its parent company) chooses to go down that route, it could become the west’s answer to WeChat, and set itself apart from messaging competitors like Signal and Telegram by becoming the one to drive mainstream usage of QR codes.
Two other big developments might tip the scale towards a true comeback of QR codes. Google Chrome has how introduced native support for QR codes into its iOS app, meaning that iPhone users who browse with Google Chrome now have the ability to scan QR codes built in and ready to go.
Apple has also decided to introduce a QR code reader to its camera app in iOS 11, giving iPhone and iPad users on iOS 11 the ability to scan QR codes using their phone’s camera.
There’s been no word from either of the tech giants over why they decided to introduce this functionality now, but maybe they know something we don’t. Either way, the potential is there for marketers to unlock, and if this native functionality extends to Android, there will be an even bigger cohort of ‘QR code-ready’ mobile users for brands to target using QR codes.
While a QR code comeback isn’t going to happen overnight, we no longer have most of the problems that caused QR codes to die out several years ago. Technology and infrastructure-wise, we’re in a much better position to make QR codes work properly as a link between the online and offline worlds, something that brands have been trying to crack for years and years.
You might ask why we can’t just use Near-Field Communication for mobile payments, or AR apps to create interactive mobile marketing experiences in the offline world – why bother with the outdated technology of QR codes when we have other options?
My question is, why not have all three? NFC and AR can exist alongside QR codes, and anything that gets consumers used to interfacing with the offline world using their smartphones benefits the uptake of all of these.
If we’re truly becoming a mobile society, why should we limit ourselves to just one or two methods of linking the online and offline worlds via our smartphones? If anything, it makes sense to have as much choice as possible.
Rebecca Sentance is the Deputy Editor of ClickZ and Search Engine Watch.
SI systems consist typically of a population of simple agents or boids interacting locally with one another and with their environment. The inspiration often comes from nature, especially biological systems. The agents follow very simple rules, and although there is no centralized control structure dictating how individual agents should behave, local, and to a certain degree random, interactions between such agents lead to the emergence of "intelligent" global behavior, unknown to the individual agents. Examples in natural systems of SI include ant colonies, bird flocking, animal herding, bacterial growth, fish schooling and microbial intelligence.
The application of swarm principles to robots is called swarm robotics, while 'swarm intelligence' refers to the more general set of algorithms. 'Swarm prediction' has been used in the context of forecasting problems.
A little more than a year ago, Amazon announced a new grocery store concept that promised customers a human-less shopping experience. Customers would simply walk in, grab the items they need, and leave without waiting in a line or going through a checkout—letting sensors, computer vision, and machine learning quietly do all the work to capture, calculate, and charge you for your purchases.
With much fanfare, Amazon opened a trial store in Seattle. Then, headlines went quiet as the company hit unexpected technical challenges, according to the Wall Street Journal (paywall). Last month, speculation of Amazon Go’s rollout reignited when the company began hiring store-related personnel.
But Amazon’s rival JD.com, the second biggest online retailer in China after Alibaba, has already beaten it to the punch. JD announced that, in partnership with Hong Kong real estate developer China Overseas Land & Investment Ltd, it plans to open hundreds of unmanned convenience stores with technology reportedly more advanced than Amazon’s. Its trial shops have already been tested by the 10,000 employees at its Beijing headquarters.
JD’s shops will use RFIDs and cameras with facial recognition and image recognition technology on the store ceilings to track each customer’s movement and product selection. As the store learns from a customer’s preferences over time, it will also begin to show personalized advertisements. The same tracking technology will also help store owners restock inventory more efficiently.
In addition to its fully integrated store concept, JD tested a second shop model that uses low-cost piecemeal technology solutions, such as smart shelving tools, that will allow existing stores to upgrade and increase the efficiency of their operations.
The company said that all of its technology will eventually be licensed to third-party retailers.
“These two smart-store solutions will completely change what it means to go to take a trip to the store,” said JD vice president Song Ma. “From helping small stores’ owners streamline their supply chains and increase stocking efficiency, to speeding up check out, this is a massive jump beyond anything in use today.”
Whereas Amazon’s acquisition of Whole Foods has given the American tech giant a brick-and-mortar presence to potentially roll out its Amazon Go vision, JD will leverage COLI’s real estate resources across China to rapidly expand. The China Daily reports JD and COLI’s partnership will extend into the development of other smart city solutions, including a last-mile delivery service using driverless vehicles that follow pre-programmed routes and have secure lockers onboard.
RFID and QR codes will have a role to play in the implementation of blockchains. An example:
How blockchain is strengthening tuna traceability to combat illegal fishing
Candice Visser and Quentin Hanich The Conversation
In a significant development for global fisheries, blockchain technology is now being used to improve tuna traceability to help stop illegal and unsustainable fishing practices in the Pacific Islands tuna industry.
The World Wildlife Fund (WWF) in Australia, Fiji and New Zealand, in partnership with US-based tech innovator ConsenSys, tech implementer TraSeable and tuna fishing and processing company Sea Quest Fiji Ltd, has just launched a pilot project in the Pacific Islands tuna industry that will use blockchain technology to track the journey of tuna from “bait to plate”.
The aim is to help stop illegal, unreported and unregulated fishing and human rights abuses in the tuna industry. These have included reports of corruption, illegal trafficking and human slavery on tuna fishing boats.
Blockchain technology is rapidly evolving beyond Bitcoin. Emerging applications are geared to improve business in many ways – including supply-chain transparency for all kinds of products.
A blockchain is a digital ledger that is distributed, decentralised, verifiable and irreversible. It can be used to record transactions of almost anything of value.
Essentially, it is a shared (not copied) database that everyone in the network can see and update. This system provides multiple benefits for supply chains, including high levels of transparency. This is because everyone in the network can see and verify the ledger, and no individual can alter or delete the history of transactions.
For consumers, this means you will be able to scan a code on an item you want to buy and find out exactly where it has been before landing in your hands. It will be easy to answer those tricky questions about whether or not an item – such as a fish – is sustainable, ethical or legal.
As seen here, once the tuna is caught, a reusable tag is attached, from which information is then automatically uploaded to blockchain. WWF ___________________________________
Using blockchain to trace tuna
The WWF pilot project will use a combination of radio-frequency identification (RFID) tags, quick response (QR) code tags and scanning devices to collect information about the journey of a tuna at various points along the supply chain. While this use of technology is not new for supply-chain tracking, the exciting part is that the collected information will then be recorded using blockchain technology.
Tracking will start as soon as the tuna is caught. Once a fish is landed, it will be attached with a reusable RFID tag on the vessel. Devices fitted on the vessel, at the dock and in the processing factory will then detect the tags and automatically upload information to the blockchain.
Once the fish has been processed, the reusable RFID tag will be switched for a cheaper QR code tag, which will be attached to the product packaging. The unique QR code will be linked to the blockchain record associated with the particular fish and its original RFID tag. The QR code tag will be used to trace the rest of the journey of the fish to the consumer.
At the moment, linking tags is not difficult because the project is focusing on whole round exports – that is, the whole fresh fish minus head, gills and guts. It gets a little more complicated when the fish is cut up into loins, steaks, cubes and cans, but the project team is now able to link the QR code tags on the packages of the processed fish with the record of the original fish on the blockchain.
While it may be possible to use RFID tags throughout the whole process, the expense of these tags could prohibit smaller operators in the fishing industry from participating in the scheme if it expands. There is also potential to use near field communicator (NFC) devices to track the fish all the way to the consumer in the future.
Marine Stewardship Council-certified yellowfin tuna processed at SeaQuest processing plant at Walu Bay, Suva, Fiji, December 2017. WWF ____________________________________
Bringing much-needed transparency to the industryWhile this use of the blockchain is the first of its kind for the Pacific Islands region, it is not a world first. A company called Provenence and the International Pole and Line Association (IPLA) has already completed a successful pilot project tracing products from Indonesian tuna fisheries to consumers in the UK.
Provenance is also working on using blockchain to track a range of other physical things – including cotton, fashion, coffee and organically farmed food products. However, the potential of blockchain goes further. For example, Kodak recently launched its own cryptocurrency to help photographers track and protect their digital intellectual property.
Blockchain technology is just starting to change the way business is done. If it delivers on its promise of supply-chain transparency, it will be a great tool to help ensure that industries – including the tuna industry – are doing the right thing.
This will give consumers more information on which to base their purchasing decisions. For the global tuna industry, which has historically struggled with illegal and environmentally dubious fishing practices, this could be a turning point as visionary fishing companies demonstrate true stewardship and begin to open up the industry to full transparency.
IBM has introduced a blockchain-ready "cryptographic anchor" that does not appear to incorporate RFID technology.
RFID technology has been around for decades and is established within the supply chain industry, with the market value of RFID technology alone predicted to rise to US$18.68 billion by 2026. IBM's technological development predicts a move away from RFID products, to a newer method of ensuring supply chain security, in which their products can "monitor, analyze, communicate, and even act on data" – all aided by the blockchain.
IBM --------------------------------------------------
IBM kicked off its Think 2018 conference today with a bombshell announcement: It has made the world’s smallest computer, and it’s designed from the ground up to work with the blockchain. The computer itself is smaller than a single grain of salt, coming in at 1 millimeter by 1 millimeter and reportedly has about the same computing power as a 1990s era CPU.
“The world’s smallest computer is an IBM-designed edge device architecture and computing platform that is smaller than a grain of salt will cost less than ten cents to manufacture, and can monitor, analyze, communicate, and even act on data,” IBM claims. “It packs several hundred thousand transistors into a footprint barely visible to the human eye and can help verify that a product has been handled properly throughout its long journey.”
Impressive as it is, for its size, it’s not the kind of chip you’re going to see in a mobile device any time soon, it’s made for something a little different. These microscopic CPUs are designed to be disposable. They’ll spend their lifetimes stuck to products in transit to ensure they arrive where they need to without being tampered with.
“Within the next five years, cryptographic anchors — such as ink dots or tiny computers smaller than a grain of salt — will be embedded in everyday objects and devices,” says IBM’s Arvind Krishna. “They’ll be used in tandem with blockchain’s distributed ledger technology to ensure an object’s authenticity from its point of origin to when it reaches the hands of the customer.”
IBM -------------------------------------------
Essentially, these CPUs will be embedded in tags or product packaging, and they’ll log every movement the product makes, from shipment to delivery. They could also be used to ensure the authenticity of luxury goods.
“These technologies pave the way for new solutions that tackle food safety, authenticity of manufactured components, genetically modified products, identification of counterfeit objects, and provenance of luxury goods,” Krishna continues.
So, it’s fair to say the breakthrough here isn’t just the size of these computers, it’s their potential use. Think of them like the bar codes on items in the grocery store. But instead of communicating price info, these CPUs could tell you everything about the product — where it was made, by whom, and where it’s been.
RFID, NFC and QR code Technologies | Stock Discussion ForumsShare
Former Tokyo-based engineer emerges as big winner from China’s love affair with the QR code
Beijing Inspiry Technology Co. is among companies cashing in on the shift to smartphone-based mobile payments in China
South China Morning Post Li Tao PUBLISHED : Tuesday, 14 August, 2018, 7:02am UPDATED : Tuesday, 14 August, 2018, 9:18am
Beijing Inspiry Technology's smart box provides customised services for merchandisers to support specific mobile payment service providers. Photo: Handout ------------------------------
Wang Yue is one of the big winners of China’s love affair with the QR code. His Beijing-based company makes 70 per cent of the point-of-sale scanners used in the country to process transactions using the jigsaw puzzle-like digital labels.
Now the 42-year-old plans to bring his white ‘smart box’ to overseas markets, including Japan and Singapore, in a bet that mobile payments and the two-dimensional bar code will take off, just as it did in China.
His company, Beijing Inspiry Technology Co. is working closely with several organisations in Japan, as well as with Alipay and other international mobile payment brands, to boost the use of QR code payment in Japan, the Philippines, Singapore, Indonesia and the wider Asia region.
Inspiry has shipped more than 1 million smart boxes since 2015, still a tiny fraction of the number of payment points in China.
For Wang, the expansion to Japan and other parts of Asia represents coming full circle of sorts in a career that included a stint as an engineer for a Tokyo-based company in 2001.
It was in Japan that he noticed hospitals using QR codes, which were invented by Toyota Motor’s automotive parts unit Denso Corp. to solve the limited amount of information that conventional zebra-striped bar codes can hold.
In 2002, he returned to China to set up Inspiry to develop 2D bar codes. He started making the box scanner as early as 2008, initially to validate QR code-based coupons and membership cards. In 2015, as Alipay and WeChat Pay became increasingly popular, the company used the smart box to facilitate mobile payments. Alipay is the payment arm of Alibaba Group, which owns the South China Morning Post .
Wang’s big break came in recent years as Chinese consumers skipped paper cheques and credit cards to embrace smartphone-based mobile payments using QR codes. Today, the 6,000 KFC outlets in China use his glass-topped point-of-sale scanner that can process both Alipay and WeChat Pay, the country’s dominant mobile payment apps.
The 6,000 KFC outlets in mainland China use Beijing Inspiry Technology's glass-topped point-of-sale scanner that can process both Alipay and WeChat Pay. Photo: Handout --------------------------------- The price, at 299 yuan, meant it is an relatively affordable option for small-time merchants like vegetable sellers and food-cart vendors, which benefit from the security and convenience of not having to handle as much as cash.
“QR code payments will become popular in developing countries, particularly where many consumers will skip credit cards but use smartphone to make payments directly,” Wang said in a recent interview in Beijing. “The smart box has fundamentally solved the pain points of current mobile payment, making it more convenient and efficient to process as mobile payment has become an indispensable part of life among Chinese.”
Wang said he believes QR code-based payments will become the mainstream form of mobile payment at least for the next 10 years due to its convenience and low cost.
That belief will be put to the test. In overseas markets such as Singapore and Hong Kong, besides cash, consumers still predominantly use credit or debit cards, or even mass transit cards, to pay for purchases. Advances in contactless and chip-based technology have also cut down processing time compared with the traditional swipe-and-sign procedure for card-based purchases.
Just how popular are mobile payments in China? The central bank put out a notice last month reminding businesses to accept cash as payment. Paying by smartphone, using either Alipay or WeChat Pay, has become so common in China that even beggars are holding out QR codes because many passers-by do not carry cash.
Mobile payment transactions surpassed 40 trillion yuan (US$5.8 trillion) in China in the first quarter of this year, according to data from Beijing-based Analysys, a market research company.
Inspiry received a further boost when regulators discouraged the use of static codes – such as those that are printed out by merchants on a piece of paper – after reports of widespread fraud involving fake QR codes to divert mobile payments. A 500-yuan limit was imposed on such transactions. The company’s scanner box instead reads the QR code generated on the payer’s smartphone and can also process electronic membership cards and coupons.
The rising popularity of mobile payments has created a wave of payment terminal makers including Fujian Landi Equipment, Newland Payment Technology and Bejing Lakala Payment. Shanghai Sunmi Technology, a POS terminal developer backed by Chinese smartphone maker Xiaomi, introduced scanners that can also process orders from food delivery apps. Starbucks uses Honeywell’s bar code readers in China.
“We’re still only in the spring of mobile payments,” Wang said. “Just 10 years ago, it took 17 seconds to call up a QR code. Almost nobody then could imagine the widespread use of QR code payment today.”
