As featured on National Public Radio

If you drive by billboards or flip through magazines from time to time, you may have noticed pixelated squares popping up all over the place. These aren’t scrambled checkerboards or alien landing pads, but QR codes, short for quick response codes.

The codes are scanned with a smartphone camera, kind of like one might scan a bar code, and marketing departments all over the country are coming up with clever ways to use them.

Back in 1994, when bar codes ruled the digital scanning universe, the automotive components company Denso Wave Inc. developed QR codes as a better way to track car parts for Toyota.

Now, they’re more than just axle trackers. At the salad restaurant Sweetgreen in Washington, D.C., there’s a huge square on the wall hanging over the napkin dispenser.

“It looks like some arcade game from the ’80s,” says customer James Mitchell as he’s waiting for his salad.

Unfamiliarity Among Customers

Mitchell has a smartphone but says he doesn’t use it to scan the pixelated QR codes because they frequently take him to advertisements. Fellow customer Rachel McLaughlin isn’t familiar with the technology.

“It kind of looks like a television that’s out of order,” she says.

What Sweetgreen wants McLaughlin to do is whip out her phone and take a picture of the broken-television, arcade-game thing.

“It’s … one of those scanner things, where you just scan it and it tells you whatever information is behind it,” explains Elizabeth Burkes, another customer at the restaurant.

A smartphone app will interpret the picture, and link the phone to a website with product information or coupons. Sweetgreen was an early adopter of QR codes.

“We would use them in stores, and you snap a picture of the code, and then the link directs you to some sort of website, [or] a landing page on your phone. It could be a ticket to something, it could be a coupon,” says McKee Floyd, director of brand development for Sweetgreen.

But Floyd is a QR skeptic. She says it takes too long to unlock your phone, fire up the app, take the picture and wait for the page to load.

“The issue I have with QR codes is that marketing is a little bit like telling a joke, and the longer the joke, the better the punch line has to be — and [using] QR code is a really long joke,” Floyd says.

Is It Catching On?

According to a recent study from digital analyst comScore, a measly 6 percent of mobile subscribers currently use the technology. That 6 percent tends to be male, white and wealthy.

“That’s partly why there hasn’t been a massive uptake, although that’s changing as the smartphone market starts to expand,” says Oliver Williams, founder of the online marketing agency Oliver Digital.

Williams says they’re used for digital treasure hunts and for grocery shopping; they’re on cupcakes, coasters and in catalogs. In Japan, where smartphones are more widely used, Williams says, there are QR codes on tombstones, so when you scan them you see a photo of the person who died.

But there’s now something on the horizon that both Williams and Floyd say could replace QR codes: near field communication, or NFC.

Unlike QR codes, this technology is being used to pay for things. So instead of using a credit card to pay for your salad, you’d just tap your phone to a plate by the register, and the transaction will file with your bank and the business.

“With near field communication, you’re dealing with transactions that people can profit from,” Williams says. “The banks have got an interest because every transaction that occurs, they take a percentage.”

Last week Google launched its first NFC app, called Google wallet. It seems that by the time people finally figure out what QR codes are good for, they might just be swiping past them at the checkout line.

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QR or quick response codes are a type of 2D barcode. The use of 2D barcodes is also known as mobile tagging because smartphones can be used to read the codes. QR codes were developed back in 1994. The technology has been embraced in Japan and Korea, but only relatively recently in the West. Having been around for such a long time, why isn’t everyone using QR codes?

One of the largest barriers preventing people from using QR codes is simply an awareness of the technology. According to recent ComScore figures, smartphones make up 32 per cent of the phones owned by adults in the U.K. This is significant because as more consumers use smartphones they are discovering QR codes. Google has recently seen an increase in searches about the technology. Although there has been very little research on the use of QR codes in the U.K., according to 3GVision, in Q4 of 2010, the U.K. was the seventh largest user of mobile barcodes in the world.

As consumers, we are constantly bombarded with so many messages that we are not interested in, or if we are, we rarely have the time to properly engage with them. As we become ever more reliant on electronic devices for our short-term memory, it is only natural that we would use QR codes to bookmark information for later consumption.

For brands, QR codes are a really cost effective way to provide more information and drive consumers online. QR codes are interactive by their very nature and allow engagement to be measured. Brands can gain insight from metrics such as unique user usage, when and where the code was seen and even the duration of the interaction.

QR codes can hold several hundred digits and function even if they are partially damaged. They are also omni-directional, which means they are readable from any direction, ensuring high speed scanning.

From a technical perspective QR codes have more advantages than other barcodes. The most widely used type of barcode is the Universal Product Code (UPC), the series of bars found on day-to-day products. UPCs have their limitations as they are only capable of storing up to 20 digits and can easily be corrupted. However, a large part of the successful adoption of UPCs is a result of corporate backing.

Many companies, including Metro, Tesco, Calvin Klein, eBay and P&G, are leveraging the advantages of QR codes for their brands. Laura Marriott, CEO of NeoMedia Technologies has identified that QR codes used in ‘publishing and retail has the most traction’ currently in the market.

2D barcodes have many disadvantages, which are currently hindering their adoption in the West. One of the largest issues is the standardisation of symbols and a move towards open standards. One of the reasons UPC has been so successful is simply because it is universal. With so many different code versions from ‘QR’ to Microsoft’s ‘Tag’, there is no standard reader. Therefore, a consumer has to download multiple readers in order to scan different codes.

Subsequently, the vast majority of mobile manufactures have resisted pre-installing QR code readers on their handsets. Consumers have to download the correct app to read the code. They then have to open the app each time to scan a code, which can take longer than typing in a URL.

Unless the consumer is aware of QR Codes, the code is enigmatic. There are ways around this, such as incorporating a logo within the design. It also requires a level of trust from the consumer, because scanning a code could quite easily activate malware. Obviously this is less of an issue when using codes from trusted sources.

QR codes or 2D barcodes in general are easily defrauded when used for payments or coupons. By simply taking a photo of the code, it can be reused. When a wallet or card goes missing, the user promptly becomes aware, but it is less obvious using a code. Andrew Churchill, Consultant for Security Technologies, Identity Management & Cybercrime, explains that ‘a way to prevent this would be to use a form of verification and dynamic codes that only function for a set amount of time.’

In terms of mobile payments, the industry is moving towards near field communication (NFC) rather than QR Codes. NFC is used for Oyster cards, enabling the user to put their card on a sensor to make an instant payment. With so many areas of people’s lives revolving around their phones, incorporating NFC within mobiles would further speed up transactions as users wouldn’t even have to open their wallets or have a code scanned, they would literally place their phone on a sensor.

The cost of hardware and the training to use it is also a factor preventing the use of QR codes. Using cards or NFC is a natural progression less alien and more trusted than scanning codes. With the banks bringing out PDQs with NFC readers, it is an easier option for retailers to adopt.

Many in the mobile industry believe that NFC will have more traction than QR codes in the coming years. Why? Simply because the banks want to move towards a cashless society, with mobile networks and handset manufacturers wanting to capitalise on this opportunity.

It is clear that there are two main areas that are preventing everyone from using QR codes. The issues lie with the consumer and the mobile industry. There are a considerable number of consumers who are unaware of the QR code technology, although this is gradually changing as brands start to adopt it further. However, there is a clear lack of coordinated investment into open standards and pre-installed readers on mobile handsets. This presents an unresolved chicken and egg like dilemma because currently, there aren’t enough consumers using the codes to warrant the investment, but without the coordinated investment it is preventing a mass adoption.