QR code payments are an instant and contactless payment method. Customers can pay for goods (Products) or services by scanning a QR code using their smartphone or a QR code Scanning app. A QR code, short for Quick Response code, is a type of two-dimensional barcode that can hold different forms of data such as website links, contact numbers, text, or even payment-related information. When scanned using a smartphone or QR reader, it instantly provides access to that data.
Types of QR code payments
QR code-based payments are generally classified into two main types:
Static QR Code:
A static QR code contains fixed information. When a customer scans it, they are directed to a payment page where they need to enter the amount manually. Static QR codes are usually printed and displayed at checkout counters. Static QR codes work best for small vendors or service providers where the pricing is fixed or doesn’t change often, such as tea stalls, photocopy shops, or local grocery stores.
Example scenario: A small café places a laminated static QR code on each table, allowing customers to pay by scanning it.
Dynamic QR Codes:
Dynamic QR codes are created instantly at the time of transaction and typically include key details like the bill amount, the merchant’s payment credentials, and in some cases, even personalized customer data for better tracking and reconciliation. Since they are dynamic, they offer more flexibility and can be tracked and customized.
Example scenario: An online retailer (merchant) generates and sends a unique dynamic QR code with an invoice email so customers can scan and pay instantly without entering any details.
How Does QR Code Payment Work?
The process of QR code payments involves several easy steps:
1. Merchant Generates a QR Code
Depending on the type of QR code used (static or dynamic), the merchant either displays a printed code or generates one digitally.
2. Customer Scans the Code
The customer opens any supported UPI or wallet app, such as Google Pay, PhonePe, Paytm, or WavexPay, and scans the merchant’s QR code using their phone’s camera or the in-app scanner feature.
3. Payment Details Appear
When scanning a dynamic QR code, all relevant details like the transaction amount and merchant name are automatically filled in, eliminating manual entry and reducing the chances of errors. For static ones, the customer may enter the amount.
4. Payment Authorization
The customer verifies and approves the payment by either entering their UPI PIN or using biometric authentication such as a fingerprint. This step ensures the transaction is secure and authorized only by the account holder.
5. Transaction Complete
Once the payment is successfully processed, both the customer and the merchant instantly receive a confirmation message or notification on their devices, ensuring the transaction is complete and recorded for future reference or tracking.
QR code payments can also be integrated with POS systems, mobile wallets, and bank apps for smoother operations.
Benefits of QR Code Payments
There are several key benefits of using QR code payments, making them highly suitable for both business owners and their customers, especially in today’s fast-moving digital environment.
1. Cost-Effective
There is very little investment needed to start using QR code payments, especially when compared to the high cost of traditional POS machines. In fact, static QR codes are often available for free and easy to print.
2. Convenience and Speed
Payments are processed within just a few seconds, saving time for both customers and merchants. Since there’s no need to touch cash or cards, the entire process stays quick, safe, and hygienic.
3. Secure Transactions
QR code payments use encryption technology to secure transactions, significantly lowering the chances of fraud. Each payment is verified by the user through reliable and trusted mobile apps, ensuring safety and transparency.
4. The Better Customer Experience
The entire process of using QR code payments is simple, fast, and user-friendly. Since many consumers are already comfortable with mobile payment apps, it makes the transaction smooth and minimizes confusion or friction during checkout.
5. Easy Integration
Businesses can seamlessly integrate QR codes into their existing billing systems, whether it’s retail software, online checkout portals, or digital invoicing tools, making the payment process faster, more convenient, and efficient for both customers and merchants.
6. Supports Remote Payments
With dynamic QR codes, businesses can receive payments from remote customers, ideal for e-commerce, delivery services, and freelancing.
Example of QR Code Payment
Imagine a customer shopping at a fashion store that accepts digital payments through QR codes. Instead of paying with cash or swiping a card, they simply scan the store’s code to make the payment.
Here’s how a transaction would unfold:
- At the billing counter, the cashier creates a dynamic QR code that includes the exact purchase amount, which is then displayed on a screen or printed on the invoice for the customer to scan.
- The customer opens their preferred UPI app and scans the code.
- The amount and merchant details are auto-filled.
- The customer authorizes the payment.
- Within seconds, both parties receive a confirmation message.
In another scenario, a street vendor might display a static QR code sticker. The customer scans the QR code using their mobile payment app, verifies the details, and either enters the amount (if using a static code) or simply authorizes the payment with a PIN or biometric if the amount is pre-filled.
How Businesses Can Use QR Codes
Businesses across industries are increasingly adopting QR code payments due to their versatility and ease of use.
1. Retail Stores and Supermarkets
Retailers and shopkeepers can make transactions quicker and safer by placing visible QR codes at the billing desk, allowing customers to complete payments without any physical contact or card handling.
2. Restaurants and Cafes
Place QR codes on dining tables, menu cards, or counter stands so that customers can conveniently scan them using their smartphones and make instant payments without waiting for the bill.
3. E-Commerce
Businesses can easily send dynamic QR codes through email or SMS along with customer invoices, allowing users to scan and complete payments instantly without entering any details manually.
4. Transportation Services
Taxi drivers and delivery partners can easily accept payments anytime, anywhere by using printed QR code stickers or digital QR codes displayed on their phones, making transactions fast, secure, while on the move.
5. Service-Based Businesses
Freelancers, home service providers, & repair technicians can easily accept digital payments by sharing their QR codes with clients, either through mobile apps, printed slips, or even WhatsApp messages.
6. Educational Institutions
Schools, colleges, and coaching institutes can display QR codes at fee counters or on notices, allowing students and parents to make quick, paperless payments through any UPI-enabled app.
7. Healthcare
Healthcare providers, including clinics and hospitals, can simplify the billing process by offering QR codes printed on prescriptions, invoices, or counters, allowing patients to make instant and hassle-free payments.
Frequently Asked Questions (FAQs)
1. Is QR code payment safe?
Yes, QR code payments are encrypted and processed through secure payment gateways, making them safe and reliable.
2. Do customers need internet access to use QR codes?
Yes, customers need an internet connection and a mobile payment app to scan and complete the transaction.
3. Can QR codes be used for recurring payments?
Yes, businesses can generate dynamic QR codes with preset amounts for subscription or recurring payments.
4. Are there any charges for QR code payments?
Charges vary based on the payment service provider. Some apps offer zero transaction fees for a limited period.
5. Can QR code payments be tracked?
Absolutely. Dynamic QR codes provide detailed transaction data and can be tracked via dashboards or payment gateways.
6. Do I need a business account to accept QR payments?
Yes, most QR code-based payment apps require businesses to register with a verified account.