EPC Codes: Paying via QR
I recently learned about a new method of transferring money through SEPA: EPC Codes.
I encountered them when I got a bill with a QR code on it that I could scan with my banking app. When I did it, it autopopulated all of the necessary fields (recipient, IBAN, amount, etc). I wondered how it all works and it turns out being much simpler than I thought.
I initially thought it must be some kind of URL that causes an API request to be made to populate the necessary data. But when I scanned the code with a regular QR scanner I noticed that it’s a simple text format:
BCD 002 1 SCT Alice DE89370400440532013000 EUR5
The lines mean the following and are quite self-explanatory:
- Service Tag (always
BCD) - Version (001 or 002)
- Character encoding (1=UTF-8)
- “Identification” (always
SCT) - BIC of the recipient (optional in version 2 if inside the EEA)
- Name of recipient
- IBAN of recipient
- Payment amount (optional)
- Purpose (optional)
- Reference (optional)
- Reason for transfer (optional)
- additional (optional) (note to the user of max. 70 characters)
All optional fields can be either left empty or completely omitted if they are not followed by other non-empty fields.
All in all, it’s a pretty simple and robust system. It’s mostly handy for organisations sending out bills. QR codes can be autogenerated and scanning one is simpler and less error-prone than entering the information manually. It can also be used by organisations soliciting donations.
It (currently) isn’t ideal for quickly sending money between friends, because there’s no “user-friendly” way of generating these codes. Theoretically mobile banking apps could generate them pretty easily, since they already have all of the information. The user would just have to optionally enter an amount. Combined with SEPA instant transfer (which all Eurozone payment providers now have to support), it would be a pretty simple, decentralised, and privacy-preserving way of sending money between friends. I’m not aware of any banking application that uses this scheme, but it would be quite easy to implement and a nice alternative to centralised payment providers (e.g. Paypal).