Driven by the rising use of smartphones, QR codes are a fast-expanding area of the digital payments sector. In fact, by 2025, the global spend using QR code payments will reach over $3trn.

Those black-and-white square patterns are now found in advertisements, on packaging, and even on gravestones. But what exactly are QR codes, and how do they work?

This article explores the ins and outs of using QR codes to accept payments. We’ll cover how to create, display and scan codes for seamless checkout experiences.

QR Code Payments: A Guide

What are QR Codes?

QR codes, or Quick Response codes, are two-dimensional barcodes that store information. Originally developed for the automotive industry, they have found widespread use in various sectors, including retail and hospitality.

Comprising black squares arranged on a white square grid, QR codes can store a variety of data types, including numeric, alphabetic, binary, and special characters. The information is extracted using an imaging device, such as a camera, which scans the QR code and interprets the pattern.

The rise of QR codes is inextricably linked with that of the smartphone. Mobile phones make it simple to access data quickly, be it a website link, product information, or, as is increasingly common, payment details.

How Does a QR Code Work?

QR code payments provide a simplified and secure transaction method that can easily be integrated into a merchant’s operational workflow.

The process begins with setting up a merchant account with a payment service provider that supports QR code payments. Providers of this kind are abundant, with all major payment processors now offering QR code capabilities.

After establishing a merchant account, the next step is to generate a QR code using the provider’s platform. This code encapsulates all the necessary data for taking a payment, ranging from account identifiers to transaction details.

Once generated, the key task is to display this QR code where it will capture the attention of prospective customers. For online businesses, embedding the code on relevant web pages is common practice, while physical stores often opt for displaying it at the checkout counter.

The actual payment process is initiated when a customer scans the displayed QR code using either a smartphone camera or a specialized application. This action directs them to a secure payment environment where they can complete the transaction. Upon successful payment, a notification is sent to the merchant and the transaction amount is credited to the merchant account.

Benefits of Using QR codes for Payments

The adoption of QR codes for payments brings several advantages that could contribute to the efficiency and customer satisfaction levels of your business.

Firstly, QR codes speed up the transaction process. There is no need for physical cards, cash, or even manual entry of payment details. A simple scan suffices, reducing the time spent at the checkout.

Secondly, QR codes are cost-effective. Unlike Point of Sale (PoS) systems that require specialized hardware and software, generating a QR code for payment is generally inexpensive. This makes it a viable option for businesses of all sizes, including small enterprises operating on limited budgets.

Thirdly, QR codes offer flexibility. They can be displayed in various formats—be it printed on a receipt, presented on a digital screen, or even advertised on a billboard. This adaptability makes it easier for businesses to integrate QR codes into their existing operations without major upheaval.

Finally, QR codes can enhance the customer experience. With the rise in smartphone usage, many customers find it convenient to pay via QR codes, as it eliminates the need to carry cash or cards. Moreover, the method supports contactless payments, an increasingly important feature in the current health-conscious environment.

What is the Difference Between a QR Code and a Contactless Payment?

QR codes and contactless payments are both convenient ways to make payments, but they work in different ways.

Contactless payments use Near-Field Communication (NFC) technology to transfer data between two devices when they are close together. To make a contactless payment, you simply tap your contactless card or smartphone on a payment terminal. Contactless payments are fast and easy, but they require specialized hardware, which can be expensive for businesses to implement.

QR codes are two-dimensional barcodes that can be scanned using a smartphone camera. To make a QR code payment, you simply scan the code provided by the merchant. QR code payments do not require any specialized hardware, making them a more cost-effective option for businesses.

Another difference between QR codes and contactless payments is the transaction flow. In contactless payments, the payment terminal typically initiates and controls the transaction. In QR code payments, either the payer or the payee can initiate the transaction. This offers additional flexibility; for example, a customer can scan a merchant’s QR code to pay, or a merchant can scan a customer’s QR code to request payment.

QR codes can also be used to handle more complex transactions than contactless payments. For example, QR codes can incorporate discounts, loyalty points, and other variables.

Here is a table that summarizes the key differences between QR codes and contactless payments:

FeatureQR codesContactless payments
TechnologyTwo-dimensional barcodeNear-Field Communication (NFC)
Hardware requiredSmartphone cameraNFC-enabled payment terminal
Transaction flowPayer or payee can initiatePayment terminal initiates
Complexity of transactionsCan handle complex transactionsCannot handle complex transactions

How do I pay with a QR code in the UK?

To pay with a QR code in the UK, you will need a smartphone with a camera and a payment app that supports QR code transactions. Most payment apps, such as PayPal, Google Pay, and Apple Pay, now support QR code payments.

Once you have a payment app installed, follow these steps to pay with a QR code:

  1. Open the payment app and go to the QR code scanning option.
  2. Scan the merchant’s QR code. The QR code will typically be displayed at the checkout counter or on a receipt.
  3. Review the transaction details, such as the merchant’s name and due amount.
  4. Confirm the payment, enter your PIN, or use biometric authentication to authorize the transaction.
  5. Receive a confirmation notification from the payment app and the merchant. This serves as your digital receipt.

How do I collect QR code payments?

To collect QR code payments in the UK, you will need to:

  1. Choose a payment processor. There are many payment processors that support QR code payments in the UK. Compare the different features and pricing plans to choose the one that is best for your business.
  2. Generate a QR code. Once you have chosen a payment processor, you can generate a QR code through their platform. This QR code will contain the necessary information for customers to make payments to your account.
  3. Display the QR code. Display the QR code in a prominent location where customers can easily scan it. This could be near the checkout counter, on the dining table in a restaurant, or even on your website for online transactions.
  4. Train your staff. Make sure your staff are familiar with the QR code payment process so they can assist customers if needed. This can help to make the transaction process smooth and error-free.

Creating a QR Code for Payments

Integrating QR codes into your payment process is a strategic move for enhancing transaction efficiency. Here is a step-by-step guide on how to create a QR code for accepting payments:

  1. Select a QR Code Generator: There are multiple QR code generators available online, some of which are dedicated specifically to payment codes. Choose one that is reputable and ideally recommended by financial institutions.
  2. Input Transaction Details: After selecting a generator, you’ll be prompted to enter the details relevant to the payment. This can include your business name, account number, and any other pertinent information.
  3. Set Payment Parameters: If you opt for a dynamic QR code, you’ll have the flexibility to set specific parameters such as discounts or taxes. This is useful for variable transactions.
  4. Generate the Code: Once all the necessary details are inputted, proceed to generate the QR code. This will create a digital image file that can be printed or displayed electronically.
  5. Test the Code: Before rolling it out for public use, conduct multiple tests to ensure it scans correctly and directs to the intended payment gateway.
  6. Secure the Code: It is crucial to secure the generated code, especially if it’s dynamic, to prevent any unauthorised modifications. Use security features like access controls or encryption, as provided by your QR code generator or payment processor.

Creating a QR code is a straightforward process but does require attention to detail to ensure it functions as intended and remains secure.

QR codes

Are QR codes a safe payment method?

Safety is a critical concern for both consumers and business owners when it comes to financial transactions. So how do QR code payments measure up in terms of security?

  1. Encryption: QR codes used for payments are generally encrypted, which means the data they contain is scrambled and secure. It would require a complex decryption process for anyone who intercepts the code to misuse it.
  2. Two-Step Verification: Many payment apps require a secondary form of authentication before completing a transaction. This could be a password, a fingerprint, or facial recognition, adding an extra layer of security.
  3. Transaction Alerts: Users usually receive immediate notifications for any transactions, allowing for quick detection of any unauthorized activity. Businesses also get instant confirmations, making it easier to spot discrepancies.
  4. Limited Exposure: Unlike traditional credit or debit cards that may require you to hand over your card or expose your PIN, QR codes can be scanned from a distance, reducing the opportunities for fraud.
  5. Vendor Credibility: One downside is that anyone can generate a QR code, including scammers. It is crucial to ensure that the QR code belongs to a trusted entity before proceeding with the payment.
  6. Software Updates: Ensure your payment application is regularly updated. Companies frequently release security patches, and staying updated means benefiting from the latest security measures.

While no payment method is completely foolproof, QR codes do offer multiple layers of security that make them a safe option for conducting transactions. However, both businesses and consumers should exercise due diligence to minimize risks.

Displaying Your QR Code for Customers

The effectiveness of your QR code payment system is also influenced by how you display the code for customer use. Here are some best practices to consider:

  1. Visibility: Place the QR code where it can be easily seen and accessed by the customer. Common locations include checkout counters, table tents in restaurants, or directly on the product packaging.
  2. Clarity: Ensure the printed or digital QR code is clear and unobstructed. A smudged or scratched QR code may not scan correctly, causing delays or errors in the transaction.
  3. Instructional Signage: Accompany the QR code with simple instructions on how to make a payment. This is particularly useful for customers who are new to this payment method.
  4. Size Matters: The QR code should be large enough to be easily scanned by a smartphone camera. However, avoid making it so large that it becomes cumbersome to display.
  5. Security Measures: If the QR code is displayed in a public space, ensure it is secure against tampering. For example, place it behind a protective glass or use secure digital displays.
  6. Multiple Codes: In a setting where there are multiple payment options or different departments, clearly label each QR code to avoid confusion.
  7. Updates: If you’re using dynamic QR codes that can change over time, ensure the displayed codes are current. Automated systems can help keep the displayed codes up-to-date.

Tips for Successful QR Code Payments

Implementing QR code payments in your business can offer substantial benefits, but success often lies in the details. Here are some tips to optimise your QR code payment system:

  1. User Education: Familiarise your staff and customers with the process. The more comfortable they are with the system, the more likely they are to use it regularly.
  2. Quality Control: Periodically test your QR codes to ensure they are functioning correctly. Any issues should be addressed promptly to maintain a smooth operation.
  3. Feedback Loop: Create a mechanism to gather feedback from both customers and staff. This can provide insights into what is working well and what needs improvement.
  4. Transaction Limits: Consider implementing transaction limits for QR code payments, as an additional safety measure against potential misuse or errors.
  5. Customisation: Utilise the ability to customise QR codes to include branding elements, making it more recognisable and trusted by your customers.
  6. Promotions: Leverage QR codes for promotional activities. For example, you could offer discounts for transactions completed via QR code payments, encouraging more customers to try the method.
  7. Data Analysis: Use the transaction data to gain business insights. QR code payments often provide rich datasets that can be analysed to understand customer behaviour, popular products, or peak transaction times.
  8. Compliance: Ensure your QR code payment system is compliant with relevant local and international financial regulations to avoid any legal complications.


Can I Customise My QR Codes to Match My Branding?

Is There a Limit to the Amount That Can Be Transacted Through a QR Code?

Can QR Codes Support Multi-Currency Payments?

What Happens if a Customer Scans an Outdated or Incorrect QR Code?

How Can I Leverage QR Codes for Promotions or Customer Engagement?

Do QR Codes Expire?

Can I Track Customer Behaviour Through QR Code Payments?