In the traditional Buddhist cosmos there are sub-human hells of suffering: fighting demons, hungry ghosts, terrifying animals and so on. In the human realm we create our own hells. QR code payment app checkout stress, is one of them.

We’ve all experienced checkout stress, that unfunny comedy routine when someone at the head of the line launches a QR code app in a store network challenged environment, digging around for a discount coupon that they have to login for, of course. Finally ready to pay, the Frankenstein QR code + NFC combo reader spits out a read error…the checkout staffer says, “You’re holding it wrong,” and so it goes.

As much as QR + NFC all in one readers have evolved, the integrated POS systems that drive the entire checkout experience for merchant and customer alike are less than ideal. Checkout stress never goes away. But why QR when we have all those NFC based payment solutions, didn’t NFC supposedly win the contactless payment wars?

It comes down to VAS, Value Added Services, the catch all phrase for post payment goodies: time limited store coupons, store reward points, cash-back rebates and so on. Easy VAS is one of the big reasons why QR code payment apps (PayPay, Rakuten Pay, dPay, etc.) took off in Japan despite all the faster card payment NFC infrastructure. When it comes to store checkout, people care less about speed, more about rewards and coupons. It’s cheaper and easier to do VAS customization when it doesn’t dependent on card company payment networks. Smaller merchants using prepackaged POS systems (AirPay, RakutenPay, Square, etc) don’t have an easy way to incorporate customized NFC VAS services.

NFC Failures
The industry is littered with failed attempts to extend NFC functionality beyond its core success with smart-cards and payments: NFC peer to peer never took off, NFC VAS never took off, Apple’s App Clips attempt to leverage NFC background tag reading into a easy ‘tap, order, pay’ experience has also been a spectacular failure.

NFC VAS has a very high bar to achieve what’s illustrated on the Apple VAS Developer page for a POS system like LAWSON self-checkout in the above video. There is POS system software integration, hardware certification, and Apple Pay contactless pass development. These are the choke points of NFC VAS: the high level of integration required to make it work. Only stores with deep IT pockets can afford this level of resources which is why LAWSON is the only Japanese store chain to support Apple VAS for dPoint and PONTA point cards when paying with Apple Pay.

Fortunately there is an NFC solution for easy entry level VAS: Pi-xcels NFC digital e-receipts. You might be asking yourself, e-receipts, are you serious? Don’t laugh, it’s hard to create a fast and easy user experience that works seamlessly across different devices. Pi-xcels Founder Daniel Lim and Co-founder Chua Zhen Rong demonstrated their NFC e-receipt solution to me recently. It was impressive. Fast performance and a simple ‘it just works’ user experience. The only thing they needed for the demo was 2 mobile devices, an iPhone and an Android OS based mobile Ingenico AXIUM DX8000 NFC reader.

One of the easiest ways to do VAS is paper receipts with QR coupon store specials. It’s low tech but reliable. Anyone can use them. This is why LAWSON uses them all the time despite having a fancy POS system with NFC VAS. The only problem with any paper coupon is losing them, in a pants pocket, the uncharted depths of a bag, the ‘I know it’s here somewhere’ checkout comedy routine. Digital e-receipts are always on your device.

The Pi-xcels e-receipt seamlessly zips to the users iPhone immediately after the Apple Pay ding with a background tag read notification (iPhone XS and later). Tap the notification and Safari immediately loads the e-receipt. It’s a quick, clever use of NFC background tag read that App Clips promised but never delivered, that safely puts receipts on the user’s device. How does Pi-xcels achieve this?

NFC background tag read done right
Pi-xcels does this by prepackaging NFC VAS integration. They license their technology to the NFC reader manufacturer so that the e-receipt function is part of the basic reader software menu. It’s the prepackaged integration that NFC VAS has lacked when competing with flexible QR code apps.

They achieve fast performance by cleverly leveraging offline embedded secure element transaction processing while the OS is free to go online to process the e-receipt, add points, generate barcode coupons, etc., all the post transaction extras to be incorporated in the NFC NDEF tag read/write.

To me the genius stroke is how they use NFC background tag reading. The power of background tag reading is that it’s automatic with one condition: the screen must on to be automatic. In the case of iPhone Apple Pay, the screen is on and unlocked for transaction authorization, so the background tag read is instantaneous and seamlessly takes the user to e-receipt download with a tap. If App Clips had delivered this ‘it just works’ focused, simple user experience, it could have been a hit instead of a dud.

Security is a given as there is a secure wall between what goes on with the NFC payment transaction process handled by the secure element, and the e-receipt NFC tag read/write process handled by the OS. They are separate processes. Lim says they plan to incorporate point reward post-transaction processing for showing points on receipts and/or launching the relevant app with the same seamless speed seen in the video. Pi-xcels technology works across all NFC flavors: A-B-F. There is a lot more that can add without losing the key elements of focused simplicity and speed.

Ingenico is the first licensee and Lim says they expect to announce other NFC reader manufacturer licensees soon, major players in the Japanese market. He said, “We think we can stitch up most of the market.” He may be right. The Pi-xcels strategy is keenly focused on the entire mobile payments experience. Imagine the potential for e-receipts when Tap to Pay on iPhone launches in Japan as expected in late 2023~early 2024. Tap to Pay on iPhone POS solution providers with Pi-xcels technology integrated in the mobile POS software would let smaller merchants easily add NFC VAS at checkout.

If Pi-xcels can execute their licensee agreements as planned, I think they stand a good chance of stitching up the Japanese market. There is no competition for the flexibility and ease of e-receipts that double as a QR code coupon VAS delivery vehicle. It’s an excellent fit with how Japanese customers use barcodes and QR for coupons and reward points at checkout. It finally brings the advantages of inexpensive QR VAS with simple prepackaged mobile based NFC VAS integration for small merchants without deep IT pockets. The Pi-xcels strategy of building a mobile based NFC digital receipt platform is simply, NFC VAS ‘for the rest of us’.