What is it and how does it work?

QR codes have many uses, but how are they utilised for payments? Are they still relevant?

Let’s begin with the origin of QR (Quick Response) codes. The name is the trademark of a type of matrix barcode created in 1994 for the Japanese automotive industry. It has since been used in many contexts, for instance marketing and information sharing, but it is also a popular way for people to make mobile payments, especially since the Covid-19 pandemic started.
Although similar to the linear barcodes we see on products in shops, the QR code has four important advantages:

  • It stores a large volume of data.
  • It can be scanned from a screen, not just paper.
  • It can be read even if part of the code is damaged.
  • It’s safer because information can be encrypted.

Characteristics of QR codes

There are many variations of one-dimensional and two-dimensional barcodes, a lot of which look very similar. The QR code is just one of the two-dimensional designs that happens to be the most frequently used code to scan with smartphones. QR code example QR code that links to Wikipedia. The QR code stands out with its three small squares placed in the lower and upper left corners and upper right corner. The overall code has a square shape composed of a matrix of small squares. The number of small squares per side can vary, e.g. 33 x 33 or 177 x 177. The fewer the squares, the less information the code contains and vice versa for more squares. Because information is contained in two directions, it can hold a lot more data than a one-dimensional barcode. A QR code composed of 177 x 177 squares can, for example, contain 4,296 characters or 23,648 bits. Since QR codes contain more data, they allow for encryption that is useful for payment processing.

How do QR code payments work?

Contrary to linear barcodes that can only be read by a laser barcode scanner from paper, QR codes can be scanned from both paper and screens. That is why you see QR codes in some online stores and apps. To process a QR code, you need one of the following: Smartphone or tablet with built-in camera Barcode reader that can scan QR codes Both iPhones and Android smartphones can scan QR codes directly from the main camera app, as long as it is using the latest iOS or Android software. You simply open the camera and point it towards the QR code, which will immediately recognise it and open a push notification requiring you tap it to finish the relevant operation. Only a few years ago, it was necessary to use a dedicated QR code scanning app (there are many to choose from) on your mobile device, some of which are company loyalty apps where your payment card details can be saved. Certain banking and payment apps can also process a QR code for payment processing or bank transfers.

App-to-app payments.

Both you and the recipient open the relevant apps, then you scan the recipient’s unique QR code displayed in their app through your own app. You confirm the amount to pay and tap to process the payment. QR code bill payment Many big companies include a QR code for bill payments on their invoices. Not many years ago, QR code payments weren’t that fast because of slower internet speeds, but network connections have become so fast that payments are now processed instantly. Many smartphone users are, however, still deterred by having to open an app and accurately place the camera to capture the QR code within the designated square border shown on their phones.

How can merchants accept QR code payments?

There are different ways to accept QR code payments as a business, but options are limited in some countries. In any case, you need to choose a payment company that offers QR codes as a payment method (or can add it from a third party). For example, GBL fintech now allows businesses to create a food-and-drink menu with a QR code to display at your premises in the Bangladesh. This is great for table-side ordering or letting customers order for takeaway at a distance from the till. This – and other QR code options – are automatically available for GBL fintech users for free.