QR code payments are quickly becoming an easy and reliable method for customers to pay via their smartphones. The global QR code payment market was valued at around USD 14.7 billion in 2024 and is projected to reach about USD 38.2 billion by 2030, showing how quickly businesses and customers are adopting this payment method.
In the following article, we will discuss thoroughly what QR code payments are, and their practical applications, among other things, like how companies can combine these forms of payment to enhance their customer’s payment experience across all platforms.
What is a QR code?
“Quick Response” is the abbreviation for “QR.” Similar to a barcode you’ll find on products in stores, a QR code is a square patterned image that holds encoded data. However, it has the capacity to store considerably more data.
These days, they are used for a variety of purposes, such as contactless payments, in-store transactions, and peer-to-peer payments to friends.
Usually, most people open their smartphone camera or POS scanner app to scan the QR code and make the payment.
Post-scan, you often manually enter the amount for dynamic (editable) QR codes, or use pre-set details for static ones, then pay via card, e-wallet like Apple Pay or Google Pay, or other methods.
What are the Different Types of QR Codes?
Static and dynamic QR codes are two different types of QR codes that look identical to the naked eye.
Once created, static codes cannot be changed; however, dynamic QR codes can be distributed and modified more easily.
Both are widely utilized in everything from data collection and marketing to payments and money transfers.
How Do QR Codes Operate?
A QR code scanner, typically using the camera on a smartphone or tablet, can read the encoded data in the distinctive pattern of black and white squares found in QR codes. Below is a more detailed explanation:
Encoding
The procedure starts when the data is transformed into a QR code. Payment details, URLs, text, and other data may be included in this information. A specific algorithm is used to process the data and produce a pattern of black and white squares. Every distinct pattern has a corresponding character or data sequence.
Structure
Each of the various sections that make up a QR code has a distinct purpose. These consist of:
- Positioning Markers: The scanner can recognize the QR code and its orientation thanks to three sizable squares at the corners
- Timing Patterns: Rows and columns of alternating black and white squares indicate the positions of individual cells.
- Data & Error Correction Key: Regions containing the encoded data, as well as redundancy bits, which are additional pieces of information used to fix missing or faulty codes.
- Scanning Process: A smartphone or tablet with a camera and a QR code reader app installed is used to scan the code. After taking a picture of the code using the camera, the program deciphers the pattern of black and white squares and transforms it back into the original data.
Extracting Data
After decoding the data in a QR code, the scanner carries out the intended action, such as opening a webpage, displaying text, or initiating a payment transaction.
Usually, QR codes for payments include the details of the merchant or customer (such as account info) and occasionally a fixed amount. After scanning with a bank or wallet app, the customer reviews the details and confirms the payment.
Practical Uses of QR Codes for Businesses
QR codes can be used by businesses in a number of ways to boost consumer interaction, streamline transactions, and ease internal procedures. Here are a few instances:
- Contactless payments: QR codes make it easy for customers to pay quickly, securely, and without physical contact, thus enhancing the overall customer experience. For instance, a coffee shop could put up a QR code at the counter, allowing customers to scan and pay immediately, or an online store could display a QR code at the final step of the purchase so customers can finish the transaction without having to type in their card details.
- Promotions and discounts: Companies can generate them to accompany their promotional sales and discounts. For example, a clothing shop can put up a QR code in its window through which customers can access a time-limited offer, motivating them to make a purchase on the spot.
- Product Details: QR codes can give customers access to extensive product information that goes beyond the description on the package. For instance, a furniture store may attach one to price tags, which customers can scan to get 3D previews, check reviews, view assembly instructions, and see other color and style options.
- Customer Surveys & Feedback: QR codes simplify the process of gathering feedback from customers. For example, diners at a restaurant can use QR codes printed on receipts to leave a review in no time. This is a great way for the business to find out what needs fixing.
- Event Registration: QR codes help businesses streamline event registration and ticketing. For instance, an art gallery can incorporate a QR code on posters, enabling the audience to scan it and sign up or get a digital ticket straight away.
- Inventory Tracking: Companies incorporate QR codes into their inventory management to make it more efficient. Take the scenario of a manufacturer that tags its components with QR codes, and employees scan them while producing or shipping goods to get live tracking and updates.
Steps to Generate QR Codes for Payments
Although creating QR codes for payments is a simple procedure, the precise procedures may differ depending on the business or payment platform you choose. The fundamental procedures for creating a payment QR code are listed below:
1. Select a Payment Provider
Select a payment service provider (PSP) that accepts payments using QR codes. Your geography and general business requirements may also influence this decision. A bank, a digital wallet service or a specialized payment platform could be your payment service provider.
2. Set Up a Merchant Account
The selected service provider requires that you have a merchant account. The payments will be made to this account, which will be connected to the QR code. You can use your existing account if you have one; if not, you will need to establish one.
3. Use the QR Code Generator
Firstly, to generate a QR code through this feature, you should log into your service provider account on the platform, where you can then locate the QR code generation tool. The tool can generally be found under the platform’s tools or payment section.
4. Add Payment Details
You provide your payment details through the platform. This includes the merchant ID, the exact account to be credited with payments, and, if the QR code is for a specific product or service, a predetermined transaction amount.
5. Create the QR Code
Create the QR code by clicking the “generate” button after entering the required information. The platform will generate a distinct QR code associated with the payment details you provided.
6. Test It
Before you implement the code, scan it to ensure it initiates the correct payment process and sends funds to the correct account.
7. Deploy It
After testing, you can use the code in any way that fits your payment plan, such as on your website, at your point of sale, or on invoices or receipts.
Whenever you use QR codes to make payments, ensure that you display them securely so that no one can alter or tamper with them. In addition, always make use of trusted payment services.
FAQs on QR Codes
The following are some frequently asked questions related to QR code payments:
Where can QR code payments be used?
QR code payments work at in-store checkouts, on invoices or receipts, e-commerce sites, events, and marketing materials. Customers scan them with their mobile banking or digital wallet app for quick payment transactions.
Can QR code payments integrate with accounting and inventory systems?
Yes, multiple payment platforms integrate QR code payments with accounting and inventory systems. It makes a record of sales and adjusts stock automatically after every payment transaction.
How secure are QR code payments?
QR code payments are secure with trusted payment service providers, as they use encryption and require customer approval via PIN or biometrics in Apple Pay or Google Pay.
What are the cost implications of QR code payments?
Costs can be made up of per-transaction fees, potential monthly platform charges, and minimal printing expenses. In most cases, they are even lower than full card terminals for contactless payments.
How do refunds and chargebacks work with QR code payments?
Refunds go back to the customer’s original payment method via your payment platform dashboard. Chargebacks follow standard processes with proof from the payment service provider.
Cheqly: Secure Payments via Digital Wallets
Small businesses can benefit from a Cheqly virtual debit card in paying for their business spending, which can be done directly or through digital wallets such as Apple Pay, Google Pay, or Samsung Pay. Linking the card to these wallets permits you to make safe, contactless payments by phone, while the source of funds is still your Cheqly card. It can also be utilized for online and in-app shopping, vendor payments, or handling recurring bills, and at the same time, all expenditures are monitored in one place to make it easy for you to stay well-organized and free from worries.
Create your Cheqly business account now and start making secure, contactless payments.