Payments with QR code: What are they and how does it work?
QR Codes have many uses, but how are they used for payments? Are they still relevant?
Let’s start 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, such as in marketing and information sharing, but it is also a popular way to make mobile payments, especially since the Covid-19 pandemic began.
While similar to the linear barcodes we see on products in stores, the QR code has four important advantages:
When a QR code is scanned, the horizontal and vertical patterns of the matrix are decoded by the software on the smartphone and converted into a string of characters. Depending on the command of those characters, the phone could open a browser link, confirm payment information, verify geolocation, among other operations.
Characteristics of QR codes
There are many variations of one-dimensional and two-dimensional barcodes, many of which look very similar. The QR code is just one of the two-dimensional designs that turns out to be the most used code for scanning with smartphones.
The QR code stands out with its three squares placed in the bottom and top left and top right corners. The overall code has a square shape made up of a matrix of squares. The number of squares per side can vary, for example 33 x 33 or 177 x 177.
The fewer squares, the less information the code contains and vice versa for more squares. Since the information is contained in two directions, it can contain much more data than a one-dimensional barcode. A QR code consisting 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?
Unlike linear barcodes which can only be read by a laser barcode scanner from paper, QR codes can be scanned from both paper and screens. That’s 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 integrated camera
Barcode reader capable of scanning QR codes
Both iPhones and Android smartphones can scan QR codes directly from the main camera app, as long as you’re using the latest iOS or Android software. Just open the camera and point it at the QR code, which will recognize it immediately and open a push notification requesting you to touch it to complete the relevant operation.
Just a few years ago it was necessary to use an app dedicated to scanning QR codes (there are many to choose from) on your mobile device, some of which are business loyalty apps where you can save your payment card details .
Some banking and payment apps may also process a QR code for payment processing or bank transfers.