1. What are QR payments?
2. How do QR payments work?
3. Challenges & benefits
4. Contactless vs. QR payments

With over 30% of the mobile-using population predicted to be using QR codes by 2025–it’s safe to say they’re becoming more and more popular. These simple-to-create, convenient-to-use means of converting information provide businesses a way to take complicated processes–accessing a website, downloading a file, etc.–and make them easily executable. 

Today, businesses have taken the next step and are now using QR codes as a way for their customers to pay them easily and without any person-to-person contact. And though convenient when put into use, QR codes can be complicated and are best put to use when fully understood. In this short, informative guide we’ll walk you through the ins and outs of how QR codes work and why a small business might want to set them up.

What are QR payments?

A QR payment–or QR code payment–is, in the simplest terms, a contactless means of payment for people to make payments to businesses using their cellphone. The QR code–or quick response code–is an image, specifically a two-dimensional barcode that contains a large amount of encrpted information. When a QR code is scanned by a smartphone’s camera it allows a customer to instantaneously execute a specific action. In general, QR codes allow users to skip over many of the steps associated with things like accessing a website or anything requiring typing anything manually into an app. 

 

There are two types of QR codes–static and dynamic. A static QR code is unable to be edited and can be difficult to share, whereas a dynamic QR code can be easily edited and easily shared. For most businesses, dynamic QR codes are commonly used.

 

A QR code payment is where a customer scans a QR code that takes them to a payment portal where they can then enter their payment information and finish the transaction. Businesses can put QR codes on paper or on a screen, they can be used for touch-free QR code payments. Meaning, businesses can provide their customers with contact-free payment methods anytime they want.

How do QR payments work?

To use QR code-based payments, a customer must first have a smartphone with a camera or, in a rare few cases, a barcode scanner with the ability to read QR codes. 

 

Here’s how QR code payments work:

 

Step 1: Using a smartphone camera, a customer scans a previously created QR code. The QR code can be scanned from any surface or from any screen. 

 

Step 2: The customer is brought to the payment portal of the business they’re purchasing goods or services from.

 

Step 3: The customer enters their payment information into the portal.

 

Step 4: The information is transferred to the customer’s card issuer.

 

Step 5: The card issuer, depending on the funds within a customer’s account, approves or denies the transaction.

Step 6: The payment results–approval or denial–are then transmitted to both the business (from whomever they use as a payment network) and the customer (via their card issuer). 

Challenges & Benefits of QR Code Payments

Like all payment methods, QR code payments come with both pros and cons. 

The Benefits of QR Code Payments

• A convenient means of payment.

 

With touch-free QR code payments, not only can a business create a means of payment nearly anywhere, customers are able to pay for their purchases almost anywhere. 

• It’s cheap.

 

Where traditional point-of-sale systems can be expensive and inconvenient to set up for businesses of all sizes, touch-free QR code payments are an inexpensive method of payment. Incorporated into an app or printed and attached to a surface–QR code-based payments take little effort and even fewer funds to start using.

• Instantaneous payment.

 

Perhaps the greatest benefit of using a QR code-based payment is that the transaction is instantaneous. Where other payment methods may involve complicated, time-consuming processes, paying and getting paid by QR code is as simple as scanning the code. 

• Easily integrated.

 

Because of the ease–and continued popularity–of QR codes, more and more companies are working to provide simple integration for businesses of all sizes. Today, QR payments can be easily added to websites or apps, and many have even been updated to include the ability to process cryptocurrency. 

• Security first.

 

QR codes are created solely to transfer information from one point to the next. Because of the simplicity of their purpose, there is very little room for a breach in security to occur. More so, any data sent via QR codes are encrypted, making the information nearly impossible to access.

The Challenges of QR Code Payments

• It’s new(ish) technology.

 

QR codes are a relatively new payment method and though they continue to be accepted by more and more customers, the lack of familiarity with the technology can make them unappealing to some customers.

• They require smartphones.

 

QR payment codes have to be scanned via a smartphone’s camera. Smartphones are expensive pieces of technology and many customers may not be able to afford them. These customers will not be able to use QR payment codes.

• Aesthetically unappealing.

Businesses with specific design aesthetics may find the bulky, black-and-white look of the QR code to clash with their desired look.

 

Contactless vs. QR Code Payments

Though QR payments are considered to be “contactless”, there are other forms of touchless payment that use different technology to transfer payments. 

 

NFC payments–or near field communication payments–a user doesn’t access a payment portal through scanning a barcode with their camera, instead they wave or tap their phone on a physical reader, and via ultra secure, near field wi-fi, their information is transferred and the payment is made. 

 

QR code payments, as described above, are accessed through the scanning of a two-dimensional barcode. 

 

Both means of touchless payment are considered to be mobile payments and both require a smartphone to be used. 

How to set up QR payments for your business – 4 easy steps

Though setting up QR code payments for your business is fairly straightforward, there are some steps to take:

 

Step 1: Find a program or company that generates QR codes for payment processing. These companies will take all of the required information for accepting payment through the scanning of QR codes. After doing so, they’ll provide an easy way to generate QR codes so customers can start scanning them as a means of payment. Some examples are:

 

• PayPal
• Plastiq
• Square
• Clover
• Toast

 

Step 2: Choose the content of your QR code. Using your preferred QR code generator, decide what you want to be linked to your QR code. 

 

Step 3: Apply any customization to the look of your QR code. A lot of QR code generators allow you to add some personal style to your two-dimensional bar code.

 

Step 4: Print or enable your QR code.

 

Though QR codes may seem daunting from the outside, once a business has learned how to set them up and use them they’re an easy, fast, convenient means of getting paid.

 

For those businesses seeking a fast, convenient way to add QR codes to their existing, or upcoming payments, Plastiq provides the ability to seamlessly add the payment method to invoices or physical spaces. Find out more about how Plastiq is making contactless payments better than ever before.