According to a recent Juniper Research analysis, worldwide spend on QR code payments would exceed $3 trillion by 2025, up from $2.4 trillion in 2022. This 25% increase will be driven by a greater emphasis on enhancing financial inclusion in developing countries and giving alternatives to conventional payment systems in affluent countries.

More people are using QR code payments as a convenient and easy way to transact with the apparent increase in affordably priced smartphones. Another key factor driving market development is the growing adoption of digital payments. As consumers transition away from cash and towards electronic payments, shops are looking for new ways to offer ‘Pay as you Go’ options. QR code payments are a simple and cost-effective way to conduct transactions that do not require expensive point-of-sale machines or other infrastructure.

Advantages of Using QR Codes for Payment

· Touch-free payments – By simply printing the QR code, the merchant may begin accepting touch-free payments in seconds.

· Secure payments – The QR code simply connects the customer’s payment app to the merchant’s account. The payment software encrypts their payment data, allowing users to pay the business without disclosing sensitive information such as account numbers.

· Remove friction from the customer journey – Customers may complete purchases with a few taps directly from their mobile devices.

· Scans can be tracked – as QR codes can be tracked, businesses may use them to collect information about customer behaviour and transaction trends.

· Payment solutions that are both inexpensive and dependable – With QR codes, shops may receive payments without the use of a standard card reader or register. They may quickly and simply make their own code with a QR code generator, thereby saving time and money.

· Businesses may employ QR codes to track and drive engagement in loyalty programs – Businesses may invite customers to sign up for their loyalty program when they check out with a QR code, for example.

What exactly is a QR code?

A QR code is a two-dimensional (2D) barcode. It is made out of black squares laid out in a grid on a white background. These codes may be read and decoded using imaging equipment such as smartphone cameras.

Because barcodes are read horizontally, data storage is confined to a single dimension. 2D QR codes, on the other hand, feature an extra dimension where information may be typed and scanned, enhancing their data-storage capacity. 2D QR codes may be read from any angle and store data horizontally and vertically. 2D QR codes are also thought to be more secure and less prone to mistakes.

QR codes in a retail setting

Customer-presented code:

Merchant Presented Code:

QR Code Types

Static QR code: Once created, these QR codes contain a fixed (static) set of data that cannot be altered. Merchants provide these to customers in order for them to begin payments by scanning the QR code.

Dynamic QR code: These QR codes are created dynamically, giving the flexibility of customizing/changing data for each scan (for example, transaction-specific data such as transaction amount and transaction cryptogram). Merchants provide such QR codes to customers via a point-of-sale terminal or smartphone, allowing them to initiate push payments by scanning the QR code.

Considerations for Privacy and Security

QR code payments, like any other type of payment, might pose security problems. Security threats may differ depending on implementation decisions, and businesses must examine their QR code payment ecosystems to adopt the required security safeguards.

Dynamic codes consideration

QR codes may be used to perpetrate fraud by replacing or covering a static QR code with a fake code that redirects the payment to another location. Allowing customers to provide the code or using dynamic digital codes at checkout can prevent fraud. Merchants should also consider refreshing their QR codes on a regular basis to guarantee they haven’t been altered by nefarious individuals.

Consideration for QR code monitoring

Payment fraud can occur on the customer side owing to visibility of the customer’s screen throughout the payment journey, or loss or mistreatment of their personal device, since payments are started by QR codes on the customer’s phone. Customers should pay attention to the web pages and mobile apps that open while scanning QR codes to ensure that the actions on the phone that result from the scan are authentic and intended for the right party; otherwise, they risk having their code scanned by a malicious individual, potentially resulting in stolen funds.

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