September 4, 2020
In the early 2010s, China adopted QR codes to send and receive payments.
By 2017, 65% of the population was using them.
In the West, however, QR codes have mostly been limited to billboards on motorways and sharing account details on Snapchat - not payments.
This all changed in 2020, when QR code payments enabled socially distanced payments that were also fast, efficient and secure.
Why are QR codes such an effective way of taking payments? Why do customers like them so much? And how can you, as a business, use QR code payments to overcome barriers and close more sales?
Here’s what we’ll be covering in this article:
QR stands for Quick Response, and is presented as a barcode-looking image that contains information on both the merchant and payment provider.
This type of payment functions like a normal Point of Sale (POS) terminal: a customer uses their phone to scan the QR code and completes the payment on the spot.
Every modern smartphone has a camera that recognises QR codes; once the camera detects the QR code, a push notification comes up taking them to a screen where they input their payment details and complete the purchase.
QR codes were first invented in Japan in 1994 by Masahiro Hara. Hara needed a solution that could transmit more information than a barcode, but didn’t require complex additional hardware.
After a lot of research, he realised that instead of using the one dimensional barcode, he could create another type of code that was two dimensional. Instead of storing 20 characters like a normal barcode, he could suddenly store over 7,000 with QR codes!
QR code payments quickly became popular in China, with people mostly buying items by using a payments app called Alipay. In 2016, QR code payments made up a third of all payments in China.
Although QR codes took a little longer to become widespread in the West, the pandemic and ensuing lockdown forced businesses to look for safe and socially distanced ways to accept payments - hence the QR code payment.
QR code payments are versatile, fast, secure and hygienic, and have since become a popular way to accept payment methods. Thanks to QR codes, traditionally cash-based businesses such as taxis can now accept card payments, and larger businesses with many staff can now easily take payments on-the go.
As Tedd George, Fintech consultant on African markets says:
“I have seen moto-taxi drivers in Kigali with QR codes on their helmets, one-woman street kitchens in Accra with QR codes propped next to boiling pots of food, even itinerant vendors weaving through Lagos traffic jams with a QR code on their shoulder. With a QR code the vendor doesn’t need electricity or an Internet connection, just a buyer with a mobile phone.”
You may also like: The State of QR code Payments in 2021
At first glance, you might think QR codes work like barcode scanners. Although in many ways they do, there is one key difference: QR codes can be scanned from both paper and from screens.
Paper QR codes are often called “static QR codes”, whereas digital ones are called “dynamic QR codes”.
This versatility of the QR code makes it very handy to use on all sorts of surfaces, as well as on a phone screen.
In order to scan a QR code, you just need a smartphone or mobile device that can scan QR codes - nearly all modern smartphones have an in-built QR codes scanner in their camera, which means practically everyone can scan QR codes.
When someone scans a QR code, a notification pops up with a link. The user just needs to click on the link, and this will take them to the website, online menu or any other link that the QR code is supposed to take them to.
With QR code payments, the same thing happens: a notification pops up that takes the user to a secure payment screen. On this screen, the user can choose to pay with Apple Pay or Google Pay immediately, or input their debit card details.
By using a payment provider that enables QR code payments, anyone can take payments with just their smartphone. Essentially, QR codes are democratising card payments - as a business, you no longer need to pay for monthly fees, commit to a contract or purchase separate hardware. You just need a smartphone to take payments.
Learn more about how we help businesses take QR code payments at Pomelo Pay.
As a business, you’ve likely been through the whole card reader rodeo: expensive hardware, monthly contract fees, minimum deposits, etc.
When you’re trying to keep costs down or are looking for something more versatile, bulky card readers are an expensive way to take payments.
With QR codes, setting up a payment solution is ten times easier and faster.
By using a QR code payment system like Pomelo Pay, all you need to do is download a mobile app. Forget about buying expensive hardware or monthly contract fees - if you have a smartphone, you can immediately start accepting payments.
This is also incredibly useful if you have several employees in different locations.
With a QR code payment app, each employee just needs to download the app on their phones and they’ll be able to accept payments too. All payments will be deposited into one account, making it very easy to manage from one location.
With QR codes, Amran, owner of a local taxi business, can now take card payments with just his phone - and so can all of his employees. He explains how in our recent case study:
“It’s all in one hub rather than everyone having their individual card readers and it being all over the place. If I had 7 drivers using card readers, then I would have had to manage their account. With Pomelo Pay, it’s more streamlined.”
Learn more about using an app for card payments: How Can an App for Card Payments Benefit my Business?
QR codes are one of the most versatile ways to accept payments. With Pomelo Pay, for example, you can use both static and dynamic QR codes.
Static QR codes can be printed and do not change. Dynamic QR codes are displayed on your mobile device and therefore can be edited in real time.
Your customers can therefore complete payments without you even being present, which helps speed up payments and allows you to serve more customers.
With Pomelo Pay, you’ll have the added benefit of using payment links, and you’ll be able to integrate them easily into your website or third party software. And soon you’ll even be able to accept contactless payments with just your phone.
QR code payments allow businesses of all sizes to accept Visa, Mastercard, Google Pay and Apple Pay at favourable rates, and all from one centralised system.
You’ll no longer need to keep track of three separate systems and manage five sets of Excel spreadsheets. With Pomelo Pay, all your payments are on one dashboard.
Learn more about our payment links: Accept Card Payments Remotely
In the world of same-day delivery and self-checkouts, customers no longer have the patience to wait for their items.
Whether it’s an online delivery or in-person order, QR code payments help you speed up payments and therefore increase the number of customers you can serve.
We’ll let a Pomelo Pay customer, Tom, owner of a street food vendor based in Kingston, explain how:
“QR codes are the answer to the problem because customers don’t need to queue up in a line - you can put the QR code anywhere, outside, inside, anywhere - all they need to do is scan it and then pay for it. I benefit from it because you can virtually do anything with it.”
By displaying a QR code right in front of your shop, customers can access and order through an online menu. You don’t need to manually take their order, making it easier and faster to prepare their meal and deliver it to them.
Learn more about how businesses are using Pomelo Pay: How a Street Food Vendor from Kingston Market Boosted Revenue by 10% with Pomelo Pay
When you’re dealing with several payment systems, all with different compliance and regulations, it’s often hard to make sure everything is secure.
With QR codes, it’s completely different: not only do you have one centralised system with QR codes, but payments are also a lot more secure than other transactions such as cash.
With a QR code payment, all information is encrypted and no customer details are stored on file.
Pomelo Pay is also PCI Level 1 compliant, regulated by the FCA and a member of Mastercard. Every transaction through Pomelo Pay is tokenised, which means customer details aren’t stored with the merchant nor us.
As you can imagine, QR codes are also gaining popularity due to recent social distancing regulations: by using QR codes to transfer payments, merchants and customers no longer need to handle cash, whether online or offline.
A restaurant can simply print out a static QR code, set it down on a table and allow customers to scan and pay from a safe distance. This type of payment means both customers and merchants can work in a safe, secure and convenient environment.
At Pomelo Pay, we’ve been using QR code technology from the very beginning. We offer merchants a method of accepting payments through their mobile phone by generating a QR code.
Our QR code payments feature allows you to take payments on-the-go using your phone. They are a quick and secure way to take payments without having to share bank details.
Here’s how the process works:
Note: Most Apple and Google devices have a built-in QR code scanner that automatically recognises the code.
At Pomelo Pay, we believe that QR codes are the future: they are more secure, safer and much more efficient. By accepting payments with QR codes, merchants are able to spend more time focusing on providing the best experience for their customers. Over time, this translates to consistent branding, growing revenues and most of all, happy customers.
Want to see if QR codes might work for your business? Try Pomelo Pay for free!
QR code payments are one of the safest payment methods. That’s because card details are encrypted and each transaction is tokenised, making it incredibly hard for thieves to steal personal information.
QR codes do not expire. If the landing page or website is outdated, then the QR code will simply direct you to a broken webpage.
Tiziania, owner of mobile food business Heartmelts, doubled her orders with Pomelo Pay. Read more to find out how!
Vincent Choi, CEO of Pomelo Pay joins the FinTech Magazine Podcast to talk about contactless payments, the importance of QR codes and the impact of the pandemic and Brexit for the fintech industry.