QR code Payments Explained

We are all too familiar with the cryptic barcode patterns that we use every day to send and receive payments. QR codes, short for quick response codes, have revolutionised digital payments with quick and easy payment transfers.QR codes have completely bypassed the manual effort required in payments and simplified the process for businesses and customers.

QR codes are used to encode not just payment information but all types of information. Originally invented in the 1990s by Denso Wave, a Toyota subsidiary, for use in the automobile manufacturing process. Since then, QR codes have captured all sorts of information, from restaurant menus to event tickets. With the global QR code market size expected to grow at 16.9% CAGR between 2023 and 2030, we take a deeper look at these square shapes arranged in a unique matrix.

What is a QR code payment?

QR codes are a derivative of barcodes that represent information that can be read through software. In the payment landscape, QR codes represent the recipient's required transactional information. The buyer scans the QR codes using scanning software, typically from a smartphone. The customer doesn’t need to enter the transactional data manually.

The transactional data condensed in a QR code would include the account details of the recipient, transaction amount and any other payment-related information.

Payment uses of QR

QR code is used to make mobile payments in a whole range of commercial situations. Here are a few common scenarios where we see the use of QR codes.

• Commutes – Travellers use the QR code of the transport service provider to pay for the ride. This can be while hailing a taxi, on a bus ride or taking an auto.
• Retail shopping – More and more retail stores in India now display a QR code prominently at their counters. Often accompanied by a soundbox announcing the payment receipt. With a growing preference for QR code payments among customers, retailers are quickly including QR codes as a mode of payment.
• Eateries – Restaurants have QR codes displayed on menus and invoices so that customers can opt for the quick payment option. Even roadside eateries have QR codes on display, making sure that customers don’t need to dig for loose change in their pockets for their cup of tea.
• Online businesses – While shopping on e-commerce platforms a QR code can be provided on the checkout page. By offering this option, online businesses are making the payment experience simpler and effortless.
• Tickets – In an online ticket booking service website, a QR code can be added on the checkout page for easy payment. The ticket itself can be another QR code, which is scanned at the gates during the boarding process. This not only makes payment easier but also replaces the use of paper tickets.
• Peer-to-peer Payments – QR code is also used for paying another individual. It is generated in the bank, UPI, or wallet app that the individual uses. Paying petty business payments has become a lot easier with QR codes.

Types of QR codes

At a technical level, there are several types of QR codes. For instance, a micro QR code encodes only 21 alphanumeric characters. Then, there are IQR codes that can be made in 61 formats. SQRCs are used to obtain more private information.

Broadly, there are two types of QR codes – static and dynamic.

• Static QR codes – The information in these QR codes cannot be changed once it is generated. This can be used for static information that does not change. Nevertheless, changes in static QR code information would require the generation of a new QR code.
• Dynamic QR codes – As the name suggests, information encoded in a dynamic QR code can be altered after it is generated. A dynamic QR code is generally a link to an online location. This location stores the data, and you can change the information at this destination location.

A major advantage of dynamic QR code is that it tracks the scanning, capturing the time of scan, location and device used. This helps businesses to gather useful information for data analysis. However, unlike a static QR code, a dynamic QR code can be used only with an active internet connection.     

Overwhelming Response to Quick Response

The seamless compatibility of QR codes with smartphones and mobile applications has made it an overwhelming success in most markets. India and the rest of Asia are using QR codes in huge numbers, while its reach is also significant in the US and European markets.

Try the Worldline payment solutions such as VABOX to provide the best scan-and-pay experience to your customers and watch your business grow.  

References

• Quick Response Code- Definition and How QR Codes Work
• How does the Universal QR code work?
• Scan & Pay