QR codes appear on menus, packaging, and marketing materials. Another widespread use? Payments. Businesses accepting digital payments can use QR codes to let customers pay with their phones.
Before diving in, it’s important to understand not only how QR code payments work, but also the practical value they offer businesses like yours.
Key Takeaways
- QR code payments let customers pay by scanning a code with their phone. The scan takes them to a payment page where they can enter card details or use their mobile wallet.
- Businesses can use static or dynamic QR codes, depending on whether they want customers to enter amounts manually or confirm a preset total.
- QR payments work in-store, online, and remotely. As long as customers can scan the code and access the payment page, QR code payments can be completed from virtually anywhere.
- QR code payments typically use security technologies like encryption (which scrambles data so only authorized parties can read it) and tokenization (which replaces sensitive information with unique codes). The overall security of QR payments depends on the underlying payment platform.
What Is a QR Code Payment?
A QR code payment is a payment option that lets customers scan a code with their phone camera and go to a checkout page, where they complete the transaction with a digital wallet or by entering payment details.
Static vs. Dynamic QR Codes in Payments
A static QR code does not change and usually leads to a payment page where customers may need to enter the payment amount themselves. A dynamic QR code is generated for each transaction and includes specific payment information, such as the exact amount due, thereby streamlining the process.
How QR Code Payments Work (Step-by-Step)
Here’s a breakdown of QR code payments in action.
Step 1: The Business Displays a QR Code
To accept QR code payments, a merchant generates and displays the QR code at checkout—either as printed signage or digitally on a device.
Step 2: Customer Scans Using Their Smartphone
When customers are ready, they scan the QR code to start the checkout process. For static codes, they enter the amount; for dynamic codes, the amount appears prefilled for confirmation.
Step 3: Payment Information is Transmitted Securely
After the customer submits payment, the processor encrypts or tokenizes their details. The business never sees or stores full payment information, keeping the process secure.
Step 4: Business Receives Instant Confirmation
Once approved, the business receives real-time confirmation. The transaction appears in the payment system, and the customer can get a digital receipt. Funds settle like other electronic payments.
Types of QR Code Payment Setups for Businesses
The best QR payment setup depends on your sales workflow. Consider these options.
Merchant-Generated Dynamic Payment QR Codes
- With merchant-generated dynamic QR codes, businesses create a code for each transaction. Customers scan at checkout and confirm payment on their phones.
Customer-Generated QR Codes
- Customer-generated QR codes are used in mobile wallet-to-POS (point-of-sale) setups. If a customer wants to pay with a digital wallet or app (like PayPal or Venmo), they display a QR code in that app on their phone, and the merchant scans this code to charge the customer and accept payment.
QR Codes on Receipts, Invoices, and Bills
- Display QR codes on invoices, bills, or receipts. For bills and invoices, the code directs to a payment portal. On receipts, it links to order details or a digital receipt.
QR Codes for Online Checkout & Remote Payments
- QR codes can link to online checkout pages, allowing customers to pay even when they’re not at your store. A merchant can print a QR code on a flyer for customers to scan and pay at any time.
QR Code Payments vs. Other Mobile Payment Options
Here’s how QR codes compare with other mobile payment methods.
QR Codes vs. NFC (Tap-to-Pay)
With NFC, customers use their mobile wallet (Apple Pay, Samsung Pay, etc.) to pay. They can hover their smartphone over the NFC-enabled payment terminal, and it’ll be processed like a typical credit card transaction. With QR codes, customers scan a code to open a payment page on their phone and complete the checkout there. And unlike NFC payments, which require the customer to be in proximity, QR codes can facilitate remote transactions.
QR Codes vs. Mobile Payment Apps
Mobile payment apps usually require both the customer and the business to use the same app or ecosystem. For example, if a business accepts Venmo or Zelle payments, the customer would need to be on those platforms to pay. QR code payments are more flexible. As long as the customer can scan the code and access the payment page, they can complete the transaction without downloading a specific app, though supported wallets still depend on the payment provider.
QR Codes vs. Manual Payment Links
While QR codes are scannable codes, payment links are URLs that customers can click. Both QR codes and payment links direct customers to a page on which they can complete the transaction.
Where Businesses Can Use QR Codes
QR code payments offer flexibility. Customers scan a sign or menu to pay, so businesses can accept payments without bulky equipment or fixed counters. QR codes suit nearly any business model, including:
- Retail & Boutiques
- Restaurants (Cafes & Food Trucks)
- Service Providers (Salons, Gyms, Home Services, etc.)
- Events (Pop-Up Shops & Mobile Vendors)
- Remote Invoicing & Online Payments
Benefits of QR Code Payments for Businesses
With applications in mind, let’s turn to the key benefits that QR code payments can bring to your business.
Lower Costs Compared to Card Terminals
QR codes don’t require payment hardware beyond printing. In many cases, this reduces or eliminates the need for traditional card terminals, although processing fees stay the same.
Faster Checkout & Reduced Line Friction
QR code payments speed up checkout and reduce lines, allowing customers to pay quickly with their phones. No wallet or cash needed; payments complete in a few taps.
Contactless Experience that Customers Now Expect
Contactless payments surged during the pandemic and are now the norm. QR codes allow customers to pay using their own devices, avoiding shared touchpoints. The process is both hygienic and convenient.
High Security Through Tokenization & Encryption
QR code payments follow the same security standards as other digital methods. Payment details are encrypted—meaning they’re converted into codes to prevent theft—and tokenization replaces sensitive data with unique codes. This helps reduce fraud risk. However, actual security depends on the payment platform, so businesses and customers should be on the lookout for tampered or fake codes.
Works Online, In-store, and On the Go
QR codes don’t require special equipment or a fixed location. As long as customers can access the code, they can pay whether in-store or on the go.
Helpful for Small Teams, Pop-Ups, and Service Providers
Since QR codes need no special equipment, they work well at pop-ups, events, and house calls. They’re easy to use and quick to train on—no steep learning curve or extra hardware required.
Are There Any Downsides for Businesses?
Despite their advantages, QR code payments also come with certain challenges that businesses should be aware of.
QR code payments aren’t perfect. Here are the potential downsides to watch out for.
Customer Tech Limitations
QR payments require a mobile device with a camera and an internet connection. If a device can’t scan codes or lacks connectivity, the customer can’t pay this way.
Staff Training Needs
QR codes are easy to use, but staff still need guidance. Depending on your payment setup, you may need to train employees and inform customers.
Dependence on Smartphone & Network Availability
QR payments rely on working smartphones and networks. If a camera or network fails, the payment may be delayed or require another method.
Are QR Code Payments Safe?
Given these challenges, it’s natural to wonder how safe QR code payments really are for businesses and customers alike.
QR payments are generally safe if businesses and customers follow security best practices. Consider the following protections.
Common Security Protections Built Into QR Payments
Here are some of the security measures that can be implemented for QR code payments.
- Tokenization – When a customer submits their card details via the payment portal, the system replaces their card data with a unique token that has no value outside of the transaction.
- Encryption Channels – Secure QR code payment portals transmit card data through encrypted connections. That way, sensitive card information stays protected during the payment process and isn’t exposed to the business or third parties.
- Payment Processor Fraud Tools – Many payment processors use built-in fraud-prevention tools to monitor transactions, flag suspicious activity, and block potentially fraudulent payments.
Risks to Watch For (and How to Prevent Them)
QR codes are secure, but they’re not 100% foolproof. Merchants and customers alike must be vigilant when scanning or displaying codes. These are the risks to be aware of.
- Code Tampering – Bad actors can tamper with and replace legitimate QR codes by placing fake QR stickers over real ones. Be sure always to check printed codes and limit access to those who can update or replace them.
- Incorrect QR Placement – Poorly placed or outdated QR codes can send customers to the wrong page. Make sure codes are clearly labeled and link only to trusted payment pages.
- Customer Confusion Around Fake Codes – If the merchant’s QR code isn’t clearly labeled or doesn’t match the brand, customers might hesitate to scan it or assume it’s fake.
How to Accept QR Code Payments in Your Business
Ready to accept QR code payments? Here are the steps to get you up and running.
1. Choose a QR-Enabled Payments Provider
Select a payment processor that supports QR code payments. The right partner should enable you to generate QR codes, set up payment portals, and provide payment tracking and notifications.
2. Create Your Business Profile & Link Bank Account
Once you’ve chosen a provider, set up your business profile and connect your bank account. Most providers walk you through verification and payout setup so you can start processing payments quickly.
3. Generate Static or Dynamic QR Codes
Next, create your QR codes based on how you plan to accept payments. Static codes work well for fixed pages or tips, while dynamic codes are better for individual transactions with preset amounts. Your provider should let you generate and manage these codes from a dashboard.
4. Display Codes Across All Payment Touchpoints
Already have your QR codes? Display them in all payment touchpoints, including your checkout counter, invoices, customer emails, and more. For best results, ensure all your assets are on-brand and include instructions to avoid customer confusion.
5. Train Staff and Test the Customer Flow
Ensure your team is up to speed on your QR code payment system. They should be knowledgeable enough to show customers how the process works. Also, be sure to run a few test transactions to see the customer experience firsthand and verify that everything works properly.
What Hardware and Software Do You Need?
Below are the tech components you may need when implementing QR code payments.
Smartphone or Tablet Display
- If you choose to display QR codes on a digital device rather than print them, you could invest in a smartphone or tablet display. This works well for merchants who use dynamic QR codes, but it’s also a good option if you’re using static codes.
Payment Gateway That Supports QR
- You’ll need a payment gateway that can generate QR codes, host secure payment pages, and process transactions across devices.
Integration With Existing POS Systems
- It’s best to integrate your QR code payment system with your POS system so you can manage your sales from a single place.
Back-Office Reporting & Reconciliation Tools
- Accurate payment tracking and reporting are essential for reconciling transactions and keeping your books in good order.
Final Thoughts: Understanding QR Code Payments
QR code payments can be incredibly convenient for merchants and customers alike. You don’t need a complicated tech setup to make them work; as long as your customers have a functioning smartphone and reliable data connectivity, they can easily pay via QR codes.
Need a robust payment provider to power your QR code payments? Kurv’s built-in solutions enable you to generate custom QR codes in seconds. Just create the code, display it in your payment channels, and start accepting payments.
Learn more about Kurv’s QR code payment app.
Frequently Asked Questions
Do QR payments require a POS system?
No, QR payments don’t always require a POS system. However, a POS is functional if you want more structure. Integrating QR payments into your POS lets you track them alongside other payment methods. Everything stays in one system instead of being managed separately.
Can I use QR code payments without a traditional card terminal?
Yes. All you need to do is generate the code, have your customers scan it, and they’ll be taken to a portal on which they can complete their payment. No card terminal required.
How fast do QR code payments settle into my bank account?
That depends on your payment provider. Many providers offer next-day payouts once the transaction is approved, though some transactions can take 2-3 business days.
What happens if a customer sends the wrong amount with a QR payment?
That depends. If the customer enters an amount lower than what they should’ve paid, you’ll need to ask them to send the remaining balance. If it’s an overpayment issue, you would need to refund the difference through your payment provider.
Do customers need a special app to scan a QR code for payment?
Customers don’t need a special app to scan QR codes; they can use their smartphone’s built-in camera.
Are QR codes free for businesses to use?
The QR code itself is typically free, but accepting payments would incur payment processing fees (interchange fees, processor markups, etc).
How do I track and reconcile QR code transactions?
With the right provider, QR code payments would flow through your processor, so transactions show up in the provider’s dashboard just like card or online payments. And if your QR payments connect to your POS or accounting system, reconciliation is even simpler because transactions would sync automatically.
Can QR codes be reused, or do I need a new code for every transaction?
Static codes that lead to the same payment portal can be reused. But if you’re using a dynamic QR code, a new code is generated for each transaction since it includes a specific amount or order details.
