QR Code Payment Methods Explained: How They Work and Why They Matter

In this digital world, QR (Quick Response) payment methods have become quite popular. From a tea stall to a merchant with businesses worth crores, everyone is using QR code payment methods. Now, you don’t need to carry cash, cards, or any other asset as QR codes have made it very easy to pay through your smartphone, and that too within seconds. 

Read this article to know more about QR codes, how they work, and how they help businesses grow.  Also, explore its future and the difference between the QR code payment method and traditional payment methods.

Key Takeaways 

• The QR code payment method is the best way to pay in a contactless way, just by scanning the QR code with your smartphone. 
• The QR code payment is gaining ground because it is a safe, quick, and convenient mode of payment. 
• The inventory process can be made stree-free, and all received and made payments can be checked at any time in the payment history.
• It has its own built-in user authorization by using the PIN or by using the biometrics of user.

What Are QR Code Payment Methods?

QR code payment is a contactless payment method that allows customers to pay for goods and services by scanning the QR code with their smartphone. A QR is a two-dimensional barcode that can store user information such as contact details. 

When this barcode is scanned, it directs the customer to the merchant’s payment page. This is how one can pay just by scanning the barcode with their smartphone. The QR code payment method has gained a lot of popularity due to its speed and convenience. 

Types of QR codes

QR codes are of two types: 

1. Static QR Codes

Static QR code holds the fixed amount for a particular product, and can be used as many times as required. For example, a biscuit packet in a retail store will show the same amount every time its barcode is scanned. 

2. Dynamic QR Codes

A dynamic QR code doesn’t hold a fixed amount; the amount can be added as per the need. They are used in bill payments and other online transactions where the amount can be anything. 

Step-by-Step: How a QR Payment Happens

Let’s understand step by step how a QR payment happens:

• The Merchant has a QR code – The merchant generates a unique QR code for the payment. In two types of QR codes, the merchant has one – either static or dynamic. In a dynamic QR payment amount can be changed for each transaction, and the static QR code has a fixed amount for a particular product.
  
• Scanning the QR – The customer can scan the QR with their smartphone or any other device.
  
• Payment Details – After scanning, the customer gets the payment details of the merchant, such as contact information and name. The customer can verify the details with the merchant to avoid any possible issues.
  
• Authorization of Payment – The customer authorizes the payment by entering their PIN or by using their biometrics in the payment app.
  
• Payment confirmation – The transaction is processed immediately, and the entered amount gets transferred from the customer’s bank account or wallet to the merchant’s account. And both receive payment confirmation notification and payment receipt of the transaction.
  

This complete process of transferring an amount is done very quickly, within a few seconds, and is a better alternative to cash and cards. 

Why QR Code Payment Methods Are Gaining Ground

The QR code payment is gaining ground because they are very simple, convenient, and less time taking. This stress-free method of payment has its in-built authorization process through the PIN or biometrics. 

All you need to do is to just download the app. Also, it doesn’t require standalone card machines for various cards. These benefits and conveniences make this payment method a popular choice. 

DO YOU KNOW? 
QR (quick response) code was invented in 1994 Masahiro Hara of the Japanese company, Denso Wave, for labelling automobile parts. 

Where QR Code Payments Are Used

QR code payments are globally used across:

• Retail stores
• Restaurants
• Online shopping
• Bill Payments
• Peer-to-peer Transfers
• Transportation(in buying tickets)
• Donation
   

Pros for Businesses

Businesses can promote the use of QR codes to enhance customer engagement and simplify payment processes. 

• Contactless payments can be initiated, which will result in a safe, quick, and easy payment experience for the customers. 
• Direct links for the product information and prices can be initiated with the help of QR codes. 
• QR codes can be used by customers to offer discounts and allow them to give feedback. 
• The inventory process can be very stress-free with the help of QR payments. What all payments have been received and made can be checked at any time in the payment history.
  

QR Payments vs Traditional Methods

Here is a quick comparison of the essential features of OR payments and traditional methods. 

	QR Payment Method	Traditional Methods
Speed	Very quick	Time taking
Equipment Required	QR and a smartphone	Various card machines
Safety	Very safe and secure	PIN can be seen by others

QR Code Payment Setup

Generating a QR code is a simple process, but it may have some changes as on the platform or app. 

• Choose a Platform – Use a payment service provider(PSP) such as Paytm that provides such payment services. 
• Link Bank account – Link your working bank account that will receive payments. 
• Access QR code Feature – Log in and then look for QR code generation, it is generally found in tools. 
• Enter Details –  Fill the required details such as merchant ID and more. 
• Generate QR – Once done, click on the generate QR and your unique QR code will be generated. 
• Ready to Use –  The QR code is now ready to use. Try to test it once before using it for customers. 

Future of QR Code Payment Methods

The future of QR payment methods is very bright. This is a very quick, simple, and convenient way of payment. It saves a lot of time and is an efficient method in all other aspects. This is why we have seen a huge growth in the usage of payments through QR codes. 

According to Juniper Research, the global QR market is expected to exceed $3 trillion by 2025. And the number of people using it is expected to surpass 2.2 billion by 2025. This will be a huge growth in the number of people using QR payments. 

Final Thoughts

QR code payment methods are being globally used due to their simplicity, speed, and seamless payment. The QR market is expected to increase, not-so surprisingly, and it has already made a place for itself in the market is expected to be even more prevalent in the future.  

Instead of worrying about change and card machines, users prefer to scan the QR, to make a contactless payment.  

FAQ’s

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