Not long ago, no one paid for products by scanning a strange, black-and-white checkered square. But today, anyone can make a QR Code to accept payments. Everyone from entrepreneurial market stall vendors to major chains like Walmart has integrated them into their business models.
QR Codes have become a convenient, quick, secure, and contactless way to make purchases—and their popularity has only grown thanks to the fact that most smartphones now have QR Code scanners built directly into their cameras.
Payment methods facilitated by QR Codes, often called “scan to pay,” can offer faster and easier transactions for customers and better tracking and flexibility for businesses.
The basics behind QR Codes
QR Codes (short for Quick Response Codes) first emerged in 1994 to label machine parts. But now, businesses can use these amazing codes to store all kinds of data, from web URLs to WiFi passwords.
Their distinguished black-and-white pattern is the key to the unique technology: They can encode thousands of characters and up to 3 KB of data. In comparison, barcodes can only hold 20 characters. This makes QR Codes ideal for storing tremendous amounts of data, making them useful for complex tracking across many industries.
Due to their touchless capabilities, QR Codes became even more popular during the COVID-19 pandemic. The pandemic accelerated QR Code adoption as a contactless alternative to menus, touch-based payment machines, and other conventional items that users would have otherwise needed to touch with their hands, like sign-in sheets or coupons.
Static QR Codes
Static QR Codes are exactly what they sound like—once you create them, you can’t modify them. However, they also can’t be tracked, meaning you can’t collect data on their usage.
This limits common uses, such as marketers retargeting potential customers with ads. Static QR Codes are more commonly used by small businesses with simple use cases, like directing a customer to their website to place an order.
Dynamic QR Codes
Static vs. Dynamic QR Codes are like the abacus vs. the calculator. Unlike Static QR Codes, you can edit Dynamic QR Codes as often as you like. Once you make a Dynamic QR Code with a generator like Bitly, you can change where that code redirects once scanned.
You can also track user data, which you can use for marketing campaigns, return on investment (ROI) reports, and sales strategies. Customer-specific Dynamic QR Codes can even direct patrons to personalized invoices with pre-filled payment details. This gives a merchant control over what the customer pays.
Usually, Dynamic QR Codes connect to a platform where the owner of the QR Code can see analytics or make edits to the code’s destination as needed.
Using QR Codes for payments: How does this work?
Dynamic QR Codes, in combination with smart wallets, smartphones, and other common technologies, make in-person payment processing easier and more sophisticated—for the customer and your business.
This can be especially helpful for hybrid retail brands that use both physical and digital shopping to get the best of both worlds.
Integrating with current payment systems
You can print QR Codes on anything or display them digitally on anything with a screen. They can direct customers to any URL, whether it’s your e-commerce store or the website for your point-of-sale (POS) payment system, making integrations simple and efficient.
For example, a business can add QR Codes to their invoices that direct customers to a payment page with multiple payment options where they can enter their card details and complete the transaction. Or, a business currently making sales on an iPad with a card reader could also display a QR Code from a payment generator as a payment option.
QR Codes take a traditional transaction method to the next level and offer better customer service without requiring an overhaul of existing systems.
Teaching the customer
Customers already familiar with QR Codes and online payments may only require light prompting to start using QR Codes as part of their transactions.
However, some customers may need additional education to start using this new tool. Including materials with mailed invoices, posting instructional videos to your website, and other educational tactics can increase adoption. A great place to start is the lines of communication you already use with your customers.
Considering security and compliance requirements
QR Codes themselves lack Payment-Card-Industry-compliant security features like encryption and authentication. In order to use them for payments, they must be combined with a compliant POS system, like Square or Stripe. When using QR Codes for transactions, be sure to continue using compliant payment software to protect your customers and adhere to financial regulations.
What are the benefits of using QR Codes for payments?
The quick, widespread adoption of QR Codes for payment shows how much they benefit both users and businesses. Their flexibility and convenience make purchases a painless experience.
Convenience
QR Codes eliminate the back and forth of credit card payments or paying with cash and allow customers to use their digital wallets to make seamless payments.
For many consumers, this is a lot easier than carrying a wallet around: As long as they have their phone and a connected payment method, they can shop freely. This makes transactions fast and easy and allows businesses to cater to their customers’ payment preferences, which leads to a more positive customer experience.
Customization
QR Codes are customizable, meaning you can brand them to match your visual style. Bitly’s QR Code generator software allows you to create a Dynamic QR Code with different colors and patterns, and you can even include your logo.
Contactless transactions
Since COVID-19 highlighted the health risks of touching things that thousands of others have touched, customers have become more cautious. Contactless transactions provide customers with added peace of mind, and 71% of consumers prefer to continue using touch-free payment methods in the future. In fact, more than half of Americans now use contactless payment—including QR Codes.
Transaction costs
QR Codes are inexpensive and sometimes even free. Many digital payment platforms now include them as an option as part of the fees you’re already paying. That means there is rarely much additional cost to integrate them into your system.
Accessibility
Beyond being quite easy to use for most consumers, QR Codes are also highly accessible to most people, as there are nearly 7 billion mobile subscriptions as of 2023 (and the world’s population sits at about 8 billion people).
As a result, this makes QR Codes an easily accessible form of payment for any potential buyer with a smartphone, boosting the customer experience.
Exciting and inspirational real-world use cases for QR Code payments
QR Codes are already widely used for payments, but we haven’t tapped into their full potential. Some of the most innovative companies are leading the way in the future of QR Code transactions, inspiring more and more businesses to take their payment processes to the next level as well.
Walmart Pay
Walmart Pay allows users to securely store their payment information inside the Walmart Pay app. Then, the in-store Walmart terminal displays a QR Code. At checkout, users scan the code with their Walmart Pay app, allowing them to choose their preferred payment method on their phone. After the payment, the customer receives e-receipts stored in their app.
Apple Pay
Apple Pay has historically relied on NFC chips inside the phone and the payment terminal to initiate transactions. However, NFC chips are tricky because they can break and also require an exchange of sensitive information between devices. QR Codes eliminate these issues by allowing Apple Pay users to scan QR Codes and pay on their mobile devices with their mobile wallets.
Starbucks mobile payment
Loyal Starbucks customers use the Starbucks app to collect loyalty points by scanning a QR Code in the app with each visit.
In a genius move, Starbucks allows customers to double their loyalty points by preloading their app with money. Customers can then use this money to make payments in-store with that same QR Code. This two-in-one has been a runaway success.
Future trends in QR payment solutions to look out for
QR Codes are still in their infancy, and innovators are already finding ways to make these humble, classic codes more sophisticated to enhance their place as a payment tool.
Integration with cryptocurrency
You can already use QR Codes to exchange Bitcoin in peer-to-peer transactions. The next frontier is businesses being able to use QR Codes to accept cryptocurrency payments. Making it convenient for customers to pay using crypto will drive better customer transaction experiences.
Advanced security features
Developments in QR Code security could widen their applications further. For example, a new type of QR Code has a copy detection layer that prevents QR Codes from being authenticated if they are counterfeit.
AI and machine learning
AI will enhance the adoption and usability of QR Codes. AI’s pattern recognition allows it to generate QR Codes with better image quality which can be read more easily by devices. AI may also be able to create microcodes within QR Codes that are invisible to humans. These developments may have implications for QR Codes with better security and authentication features.
Maximize your QR Code efficiency with Bitly
QR Codes are only going to grow as a payment tool. The benefits and ease of the little squares made them simple to adopt, and over time, people will become more comfortable with QR Codes and may ultimately prefer to use them for payments.
Bitly makes it easy for businesses to provide a better customer payment experience with Dynamic QR Codes. Our easy customization and user-friendly analytics dashboard puts the best of QR Codes at your fingertips.
Ready to make custom QR Codes for your business? Sign up with Bitly today to get started.
