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A guide to QR code payments

A guide to QR code payments

Jun 15, 2023
Checkout.com

Smartphones and their cameras have unlocked an entirely new way to make a payment — the QR code. QR code payments make use of information contained in the barcode-loooking image about the merchant and payment provider to complete a transaction. And, by 2025, as many as 30% of all smartphone users will use them to pay.

Most commonly QR code payments are made via the customer’s smartphone when they scan the code. Once scanned, they get taken to a payment page where they’ll have the option to enter their chosen payment details or use a mobile payment solution, like Apple or Google Pay, to complete the transaction.

A vendor can also scan a QR code on their customer’s phone. This code is provided by their bank or payment app and will contain their card details, which the business can use to finalise the transaction.

We take a look at what QR codes are, what the payment benefits are, and how to use them in your business.

What are QR codes?

There isn’t recently developed technology that has had a bigger comeback than the QR code. But what exactly is it? A QR code is a type of barcode that stores information as a series of pixels. When scanned, most commonly on a smartphone, it directs the user to access the relevant information or process.

The user can then make hassle-free payments online, get brand information, follow brands on social media and more.

Created in the mid-nineties by Japanese company Denso Wave, QR codes were developed to improve barcoding for tracking production. Other use cases were explored, but consumers didn’t connect to the idea as they were difficult to access and they quietly disappeared from usage.

In 2017, however, when Apple enabled the iPhone camera to scan QR codes, they were revived. Android followed, and suddenly QR codes were more accessible to everyday consumers.

The pandemic then hit and QR code payments became a feature of everyday life. It allowed consumers to make safe, contact-free payments, explore menus and services without speaking face-to-face with staff and allow customers to check in to venues in a quick and convenient way. These days, QR codes are a central facet of the mobile payment processing ecosystem.

How does a QR code work?

Also known as scan to pay, a QR code payment gives businesses an easy to take contact-free payments from their customers. Here’s how they work. Firstly, to generate a code, you need an account with a QR code app.

Once created, you need to display the code somewhere that’s easily accessible to your customers. This could be on your product pages on your website or, if you’re a brick-and-mortar business, printed out and stuck somewhere prominent at your till.

Your customer then just needs to scan the QR code to initiate the payment. Often all they’ll need is their smartphone camera, but some codes require a specific app. Once scanned, the customer will be taken to a browser window or app to complete the transaction.

Alternatively, you can collect a payment from your customer by scanning a QR code that they have saved to their mobile wallet. To do this, you’ll need to have the ability to use the same app or POS software that generated the code. You’ll also need a mobile device or barcode scanner capable of scanning QR codes.

Benefits of using QR codes for payments

QR codes are truly a multifaceted shortcut to the internet. QR stands for ‘Quick Response,’ and in a few seconds, users can make a contactless payment with zero effort,  enabling a stress-free customer experience.

  • A simple way to accept payments - unlike credit and debit cards, which require expensive card readers, contract fees and terms and conditions, it’s relatively easy to set up and start using QR codes to take payments. Often, all you need to do is download an app, making it incredibly easy to roll out either online or across multiple locations
  • Remove friction from the customer journey - QR code payments are fast and convenient, which is fantastic for both you and your customers. That means happier customers, more conversions, and more revenue
  • Offer the capability to combine payments and loyalty programs - using QR codes is a great way to build a successful loyalty program. Firstly, as everything can be conducted on smart devices, they eliminate the need for physical loyalty cards and receipts. And secondly, as it’s easy for your customers to sign up and collect points, they’re more likely to do so and to stick with your program
  • Improved security - as all payment information is encrypted, and there’s no need to store personal information from your customers in order to complete the transaction, QR codes offer a secure and centralized way to take payments

Are QR codes a safe payment method?

QR code payments are one of the safest payment methods to use due to these key factors:

  • Credit and debit card checks:
    Card payments go through their network such as Visa or Mastercard, ensuring a stable and secure transaction takes place.
  • Local payment methods:
    Customers can choose their preferred local payment method. Promoting a safe and familiar service helps customers feel confident about trusting your business as they pay via QR code.
  • Tokenisation QR codes are tokenized and encrypted. That means no customer data needs to be stored to take payments. With no personal information to steal, QR code payments are at very low risk from fraud

To find out more, contact with the sales team.

How can merchants use a payment link with a QR code?

Merchants can create payment links to use with QR codes. Payment links give you a way to accept payments through any channel or device, allowing you to be responsive to your customers’ preferences. You can create a payment link within the Checkout.com API or dashboard. Each code can be used to accept a one-time payment and is valid for 24 hours. The customer just needs to scan the QR code to be taken to the payment page in order to complete the transaction.

QR code payments - use cases for global businesses

Different regions have taken to QR codes at different paces. Consumers in China, for example, used QR codes with major retailers, street vendors and beyond. The market has grown rapidly  and shows no signs of slowing.

WeChat Pay and Alipay allow consumers to pay in-store by scanning a code or showing their own personal code to the cashier. Money is then deducted from mobile wallets that are, usually, linked to bank accounts.

And when it comes to how we will pay in the future, cryptocurrency wallet addresses are made up of a series of letters and numbers — no longer than 34 characters. A QR code generator app can turn this long number into an easy to use QR code which can be easily scanned if someone wants to make a payment.

How Checkout.com can help you introduce QR codes

Checkout.com offers merchants a huge variety of ways to take payments, including QR codes for online payments. So, wherever your customers are in the world, and however they like to pay, you can be sure to meet their requirements, driving loyalty and boosting revenue.  

Unlock your payments potential today

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June 15, 2023 6:00
June 15, 2023 6:00