QR code payments: what are they and how to accept them

It’s predicted that by 2025, QR codes will be used by 30% of all mobile users.

QR code payments have been popular in China since 2010. Now they are used for roughly ⅓ of all payments.

In the west, QR code payments took off when Apple introduced active QR code scanners in smartphones in 2017. Today, QR codes remain one of the most efficient and easy ways to share information and complete online payments.

In fact, 67% of Mobilieron survey respondents say that QR codes make life easier in a touch-free world. If you want to offer a user-friendly in-store or e-commerce checkout experience, a variety of payment options is essential.

At Pomelo Pay, QR codes and digital wallets are some of the most popular payment methods our merchants use to accept payments. Why are QR codes such an effective contactless payment method? Here’s what we’ll be covering in this article:

1. What is a QR code?
2. What is a QR code payment system?
3. Where do QR codes come from?
4. How do QR codes work?
5. Are QR codes a safe payment method?
6. How do I make a QR code payment?
7. What are the benefits of using QR codes?
8. What are the most popular ways to use QR codes?
9. How do retailers set up QR code payments?
10. How to create static and dynamic QR codes?
11. QR code FAQ

1. What is a QR code?

QR is short for quick response. It’s essentially a two-dimensional barcode that contains information such as contact details, a website link or payment information.

QR codes can be used for a variety of purposes. QR codes can direct customers to menus, provide access to websites and open up images.

QR codes are scanned by smartphone cameras, making it a lot easier and faster than typing information manually into an app.

QR codes are distinct from NFC codes which are another way for smartphones to communicate with each other.

2. What is a QR code payment system?

QR codes are presented as a barcode-looking image that contains information on both the merchant and payment provider.

This type of payment functions like a normal 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.

With a payment provider like Pomelo Pay, businesses can turn their smartphone into a POS terminal and accept payments without having to invest in any hardware or committing to month-long contracts.

3. Where do QR codes come from?

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 using a payments app called Alipay. By 2016, QR code payments made up a third of all payments in China.

QR codes took slightly longer to become widespread in the West. However, the pandemic and ensuing lockdown forced businesses to look for safe and socially distanced ways to accept payments - hence the popularity of QR code payments.

QR code payments are versatile, fast, secure and hygienic. Thanks to QR codes, traditionally cash-based businesses such as taxis can now accept mobile wallet and card payments. Larger businesses with many staff can now easily take payments on the go.

As Simon Verraest, co-founder of Pomelo Pay says:

“Whether it’s a taxi company in the UK like Sky Taxis, a resort in the Maldives like Park Hyatt...or a merchant in Vietnam, the business always has the same pain points - which means every company can benefit from using QR codes.”

You may like: the state of QR code payments in 2021

4. How do QR codes work?

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 screens.

This versatility of the QR code makes it very handy to use on all sorts of surfaces, as well as on a phone screen. With Pomelo Pay, business owners can take payments with just their phone.

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 destination that the QR code is supposed to take them to.

With QR code payments, the same thing happens and the user is taken to a secure payment screen. On this screen, the user can choose to pay with Apple Pay, Google Pay and one of the 25+ payment methods we offer at Pomelo Pay.

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

5. Are QR codes a safe payment method?

QR code payments are one of the safest payment methods. That’s because they offer three layers of security:

1. Debit/credit card

Your customer’s payment goes through a card network such as Visa or Mastercard which ensures a secure and stable transaction.

2. Local payment methods

By using local payments methods, you’re able to give customers the option to pay using their preferred payment method. Allowing them to use the service that they trust and are familiar with means they will feel their payment experience is secure.

3. Tokenisation

QR codes payments are tokenised and encrypted, which means no payment details are stored with the merchant.

These two layers of security make it incredibly hard for thieves to steal personal information or for a customer to fall victim to fraud.

6. How do I make a QR code payment?

Making a QR code payment with Pomelo Pay is very quick and easy.

As a user, all you need to do is scan the QR code with your phone (all smartphones have in-built QR code scanners in their camera) and a notification will appear.

Once you click on the notification, you’ll be taken to a separate payment page where you can choose to pay with your preferred payment method.

At Pomelo Pay, we accept over 25 payment methods, including debit/credit card, Apple Pay, Google Pay, WeChat, AliPay and iDeal. As a merchant, you can offer customers many different ways to pay, allowing you to cater to a much wider segment of the population.

Learn more about payment methods: the ultimate guide to the different types of payment methods

7. What are the benefits of a QR code?

a) Simple set up and no expensive hardware

As a business retailer, you’ve likely been through the whole card reader experience - expensive hardware, monthly contract fees and minimum deposits.

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 mobile device, 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 phone 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, takes 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 seven drivers using card readers, then I would have had to manage their accounts. With Pomelo Pay, it’s more streamlined.”

b) Accept payments anywhere and at any time

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 are QR codes that do not move and can be printed for outside purposes, on signs, menus, hotel rooms, marketing materials and TV screens. Dynamic QR codes are one-time generated QR codes that are scanned and paid immediately.  

With static and dynamic QR codes, your customers can complete payments without you even being present, which helps speed up payments and allows you to serve more customers.

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

c) Take faster payments and serve more customers

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.

Pomelo Pay customer, Tom, owner of a street food retailer based in Kingston, explains 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

d) Implement better security

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.

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.

Read more: here's why QR codes are the future of payments

8. What are the most popular ways to use QR codes?

QR codes are popular in many industries and situations:

Hospitality: QR codes are used to order food from a restaurant or hotel. Diners can scan a QR code from a table then order and pay online.

Leaflets: QR codes can be added to leaflets that are distributed on streets or indoors. When scanned, these will take consumers to an online shop with more information.

Street vendors: vendors can use QR codes to shorten queues and waiting times by allowing customers to order and pay from their phones through an online ordering system.

Business cards: QR codes on a business card can provide others with more information when they scan your card.

Shop tills: encourage customers to view information or pay online by displaying a QR code on your till.

Companies with many employees: instead of buying a separate card reader for every employee, QR codes are a better way to take payments. Drivers at Sky Taxis, use QR codes to take payments with their phones. These transactions are all tracked through one central system on his dashboard.  

You may like: why QR codes are the future of hospitality

9. How do retailers set up QR code payments?

At Pomelo Pay, we’ve been helping businesses implement QR code payments for many years.

Our QR code payment 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:

1. Open the Pomelo app and enter the amount you want to charge
2. At this point, your secure and unique QR code is generated
3. Tap in the amount you want to charge your customer
4. Ask them to scan the code by hovering their phone camera over the QR code
5. When the customer scans your QR code, they will see a notification pop up on their phone screen
6. The customer must open this notification, where they will be taken to a payment page to pay by their chosen payment method
7. An email receipt can then be sent to the customer

Note: Most Apple and Google devices have a built-in QR code scanner that automatically recognises the code.

Pomelo Pay’s QR codes work differently to other payment providers such as PayPal. These companies say they accept mobile payments, however they still require you to buy mobile card readers.

With Pomelo Pay, all you need is a mobile phone and an account, and you only pay when you make a sale.

We believe that QR codes are the future: they are more secure, safer and efficient.

By accepting payments with QR codes, merchants are able to spend more time focusing on providing the best experience for their customers.

10. How to create static and dynamic QR codes?

We’ve made it incredibly easy to create static and dynamic QR codes.

Once you set up a Pomelo Pay account, you just need to enter the total amount you want to charge your customer.

You can choose to enter a reference, and then pick an in-person or online payment method. A dynamic QR code will display itself on your mobile device and your customer just needs to scan it to complete their payment.

You can also choose to request the payment through a payment link, or print out the QR code so customers can pay while you focus on what you do best.

Want to see if QR codes might work for your business? Try Pomelo Pay for free!

11. QR code FAQ

Does a QR code last forever?

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.

How many times can a QR code be scanned?

Both static and dynamic QR codes can be scanned an unlimited amount of times!

Can a QR code contain an image?

Some QR code generators allow you to add an image.

At Pomelo Pay, your QR code is still a code and doesn’t accept images.

What information can be stored in a QR code?

QR codes can store over 7,000 characters! Usually information is stored through a URL, but anything can be stored including contact names, GPS location, email addresses and more.

With Pomelo Pay payment processing, you can use QR codes to make easy and simple payments.

What does QR in QR code stand for?

QR code stands for Quick Response code because it allows users to access information instantly.

Do you have to pay for QR codes?

QR codes are free for customers to use!

As a Pomelo Pay customer, you’ll only ever need to pay a 1.49% transaction fee to accept QR code payments.