QR Code Payment: Everything You Need to Know

QR code payment — the payment type that’s often considered the biggest flop in recent payment history. It was released to wide fanfare and quickly shunned as excessive and pointless by consumers and merchants alike, but that may have been for the wrong reasons. And as you’ll see shortly, QR codes are having a bit of a well-deserved revolution, and merchants should know why.

But before we get into the future of QR codes and how that applies to your business moving forward, let’s cover the basics.

What is a QR code?

QR stands for quick response, and it’s a form of contactless payment where a user scans a "quick response" code from an app on their phone, functioning a lot like a barcode.

QR payments bypass a lot of the traditional clunkiness of payment systems. All a customer has to do is scan their QR code, confirm the amount requested, and then submit the payment. It’s really that simple for a consumer, and you can use QR codes in both a marketing capacity and for strict payments.

Why did QR codes flop out the gate?

For a few months, it seemed like everyone was using QR codes and that it was going to become a substantial player in the contactless space. But why was there a big splash but such a small stick? If the technology is sound, why did so many people stop caring about QR codes?

Well, it was a case of driver over car. In other words, the tech was sound (and still is super useful), but the businesses utilizing QR codes went about it all wrong.

Instead of using QR codes as a convenient payment or marketing option that made customers’ lives easier, they cheapened the utility of QR codes by sending users to awful landing pages and terribly cumbersome websites. It quickly felt scammy and salesy, and customers stopped caring.

Instead of being convenient, QR codes were annoying. The content sucked, so people moved on.

But now that’s starting to change.

The future of QR codes

QR codes are already having an international impact. While the U.S. still has a decent presence of QR codes and is realizing their continued utility, QR codes have blown up in other countries — particularly in China and Singapore’s tech and public transportation industry.

Over the last 15 years, mobile payments in China have grown into a $16 trillion market dominated by China’s two biggest tech giants — Tencent and Alibaba. Mobile payments totaled $9 trillion in 2016, according to iResearch Consulting Group. Meanwhile, the US saw $112 billion in mobile payments Paying by phone became popular in China in part because credit cards never gained the popularity they see elsewhere in the world, and because the infrastructure for mobile payments was already in place.

Singapore’s metro subway uses QR codes, so passengers simply scan a QR code as they enter in and out of the subway system. This model is catching on and will almost certainly be replicated in other transportation systems moving forward.

Now let’s talk a bit more practically about QR codes.

QR code payment: how it works in practice

Bigger stores are developing apps that collect user payment information and use that stored information to quickly transact via QR codes. So once a user adds their payment preference information in one time, then anytime they interact with a QR code through that app it charges through that payment type.

So when it comes to accepting transactions with QR codes, you have two main options (you can definitely use both of these simultaneously, though).

  1. Customer-facing QR codes. This is when the merchant presents a QR code to the consumer to scan and deduct from either their chosen eWallet or official store app.
  2. Merchant-facing QR codes. This is when a customer collects the items in their phone or app and then generates a QR code for the merchant to scan to get the total transaction amount.

Your choice will be dictated by the type of business you run, but it’s safe to say that customer-facing QR codes are a bit easier to set up.

Using QR codes to grow your business

QR codes go way beyond accepting transactions via an app. While that’s obviously an important use, here are some other great ways for you to use QR codes in your business.

1. Use QR codes as CTAs

Since QR codes can be customized to any link, you can use them on physical pieces of paper or on any digital page to send them to wherever you want. The possibilities are endless — imagine a coffee shop using QR codes to deliver information on a private espresso-making class or a fitness studio offering a discount for leaving a review.

2. Offer discounts

Push users to an email landing page with a discount behind it for an easy lead generation tool. These are great for using in tandem with reviews too! E.g. 10% discount for leaving a Google Review and using the QR code to lead them straight to a review page.

3. Gather more Facebook likes and reviews

As we just mentioned, you can use QR codes to input the review link of your choice or send them to your Facebook page to like your business!

4. Customize the shopping experience

These types of uses obviously require a little more in the name of digital infrastructure like an app, for example, but it could be worth it. Stores like Macy’s use QR codes to empower customers in their stores, allowing them to see discount offers on certain items and skip checkout lines. And some other stores also print QR codes on receipts that users can use to accrue a savings balance.

What is QR code payment security like?

Since QR codes don’t actually have to transfer any payment information, they are actually quite safe. There’s no typing or delivering of sixteen-digit credit card numbers in and out of customer vaults. Assuming the customer has entered that information into an app of sorts, they’re good to go.


That should be everything you need to know about QR codes. They won’t ever be your main transaction source unless you work in an industry like transit, but there are evidently a lot of reasons to incorporate QR codes into your payment ecosystem.

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