QR code payments: How businesses can generate and use QR codes


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  1. Introduction
  2. What is a QR code?
  3. Types of QR codes
  4. How do QR codes work?
    1. Encoding
    2. Structure
    3. Data extraction
  5. How are QR codes used for payments?
  6. How businesses can use QR codes
  7. How to generate QR codes for payments

QR codes are becoming increasingly more common in the payment processing landscape. As of 2022, the global QR code market size was valued at US$9.98 billion. Looking ahead, this market is expected to grow at a compound annual growth rate (CAGR) of 16.9% from 2023 to 2030. The rapid rise of QR codes underscores how important it is for businesses to understand and implement this popular payment method – one that offers simplicity, speed and secure contactless payments.

The surge in mobile device usage and widespread customer adoption of digital payment technologies are major drivers of QR code payments. This payment method offers businesses many advantages, including cost-effective infrastructure, accelerated transaction processing and efficient inventory management. Understanding the operations, advantages and optimal implementation strategies of QR code payments can provide businesses with a distinct edge in a swiftly changing retail market.

Below, we'll provide an in-depth look at QR code payments and explore their applications, including how businesses can effectively integrate these payments to improve their payment experiences on every channel.

What's in this article?

  • What is a QR code?
  • Types of QR codes
  • How do QR codes work?
  • How are QR codes used for payments?
  • How businesses can use QR codes
  • How to generate QR codes for payments

What is a QR code?

A QR code, or quick response code, is a type of barcode used in the digital transaction space to facilitate the rapid and seamless exchange of information. In the context of payments, QR codes can represent transactional information in a machine-readable form, which, when a customer scans it with their smartphone or other device, initiates a payment process without requiring the customer to input data manually. The encoded information can represent details such as the customer's account credentials, the transaction amount or other payment-specific information. This digital representation of transactional data helps streamline the payment process, reducing the time and effort required to complete a transaction – for businesses and customers.

Types of QR codes

QR codes can be divided into two main types: static and dynamic. Here's more information about each type:

  • Static QR codes
    Static QR codes contain fixed information that cannot be altered once the code is generated. The data is stored directly in the code itself and can be accessed an unlimited number of times by an unlimited number of users. Typically, these codes are used for tasks that don't require new or updated information, such as sharing a website URL, a Wi-Fi password or contact details. Since the data is fixed, the only way to change the encoded information is to generate a new QR code.

  • Dynamic QR codes
    Unlike static QR codes, the information stored in dynamic QR codes can be changed or updated after the code is generated. The QR code itself doesn't contain the data, but it is a reference to an online location where the data is stored. This allows businesses to track the scan in real time, including the exact time someone scanned the code, the location where they scanned it and what device they used. It also lets the business modify the destination URL, which is useful for marketing campaigns in which metrics tracking and information updates are important. One downside to dynamic QR codes is that they require an active internet connection to retrieve the stored data, whereas static QR codes do not.

Each type of QR code has its advantages and is suitable for different applications. Businesses use dynamic QR codes for their ability to track user engagement and to easily update information, while static QR codes can be useful in scenarios where the information will remain the same over time. Further below, we'll dig into the different ways in which businesses use QR codes.

How do QR codes work?

QR codes contain encoded data in a unique pattern of black and white squares that can be read by a QR code scanner, usually via a smartphone or tablet camera. Here's a more detailed explanation:


The process begins when the information is converted into a QR code. This information could consist of payment details, URLs, text or other data. The information is processed using a specific algorithm to create a pattern of black and white squares. Each unique pattern corresponds to different characters or sequences of data.


A QR code is divided into several regions, each with a specific function. These include:

  • Positioning markers
    Three large squares at the corners that allow the scanner to identify the QR code and its orientation.

  • Timing patterns
    Rows and columns of alternating black and white squares used to identify the positions of individual cells.

  • Data and error correction keys
    Areas where the encoded data is located, along with redundancy bits, which are extra pieces of information that help correct damaged or incomplete codes.

  • Scanning
    The QR code is scanned using a device equipped with a camera and a QR code reader application, typically a smartphone or tablet. The application uses the camera to photograph the code and then interprets the pattern of black and white squares to convert them back into the original data.

Data extraction

The scanner decodes the information embedded in the QR code and performs the designated action, such as opening a website, displaying text or initiating a payment transaction.

Typically, in the context of payments, the QR code encodes the customer's account details and, sometimes, the payment amount. When the customer scans the QR code with their banking or digital wallet application, the app reads the encoded data, fills in the payment details automatically and the customer needs only to confirm the transaction.

How are QR codes used for payments?

QR codes have become a popular method for making payments because they're easy to use and have the ability to digitise transaction information. Here are several examples of how QR codes are used in different commerce environments for payments:

  • Retail shops
    Traditional brick-and-mortar retail shops can display a static QR code at the checkout counter for expedited in-person payments. When customers are ready to pay, they scan the code using a mobile payment app on their smartphone, which fills in the retailer's payment details and prompts the customer to enter the amount that they will pay. This streamlines the checkout process, eliminating the need for cash or physical debit or credit cards.

  • Restaurants and cafes
    Similar to the way in which retail stores use QR codes, restaurants and cafes can print a QR code on the bill or place a QR code on each table for customers to scan and view the menu, place an order or pay for their meals directly from their phones. This reduces the need for intervention from waiting staff and speeds up the ordering and payment process.

  • E-commerce
    Online businesses can include QR codes on the checkout page of their websites or in invoices sent via email. Customers can scan the QR code to initiate payment without having to manually enter payment details. This not only simplifies the payment process, but also enhances security by minimising data entry errors.

  • Peer-to-peer payments
    Individuals can generate a QR code through their banking or digital wallet app that others can scan to send them money. This is particularly useful in situations such as splitting a bill among friends or paying a local service provider.

  • Subscription services
    Companies offering subscription-based services can use QR codes to facilitate recurring payments. For example, a gym could include a QR code on a member's monthly invoice. The member would simply scan the code to process the payment, instead of needing to go through the manual process each time.

  • Event ticketing
    For events like concerts and sporting games, organisers can embed a QR code on the ticket. This can serve both as a proof of purchase and as a method of entry to the event. When the customer purchases the ticket online, the business can send them a QR code via email or text, which the ticketholder can show on their phone at the venue.

  • Donation drives
    Non-profit organisations can use QR codes to facilitate donations. By placing QR codes on their websites, social media pages or at their physical locations, non-profits can make it easier for donors to contribute by allowing donors to scan the code and pay with their preferred payment method.

In all these scenarios, the convenience, speed and security of QR code payments can enhance the overall customer experience and operational efficiency. And, with the increasing popularity of smartphones and digital wallets, QR code payments are accessible to a growing number of customers and businesses.

How businesses can use QR codes

Businesses can use QR codes in a variety of ways to increase customer engagement, simplify transactions and reduce strain on internal operations. Here are some examples:

  • Contactless payments
    Businesses can use QR codes to enable contactless payments, enhancing the customer experience by offering a quick, easy and safe way to pay. For example, a coffee shop could display a QR code at the counter, which customers could scan with their mobile banking or digital wallet, then input the amount they need to pay and confirm the transaction. Similarly, an e-commerce website could include a QR code at the checkout page for customers to scan and complete their payment without needing to enter credit card details.

  • Product information
    QR codes can provide a direct link to comprehensive product details beyond what is typically listed on the packaging. A furniture retailer, for instance, might use QR codes on price tags in-store. Customers could scan the code to access assembly instructions, read reviews, view the product in a 3D virtual room or check the availability of different colours and styles.

  • Promotions and discounts
    Businesses can use QR codes to offer exclusive promotions or discounts. A clothing retailer, for example, could place a QR code in their window display, which would allow passers-by to scan the code and access a limited-time offer or an exclusive discount code, providing a strong incentive for immediate purchases.

  • Customer surveys and feedback
    QR codes can streamline the process of collecting customer feedback. For example, a restaurant could print a QR code on their receipts, which customers could scan to quickly access a form on their smartphone and provide immediate feedback about their dining experience. The restaurant can use this feedback to identify areas for improvement.

  • Digital menus
    Instead of using traditional paper menus, restaurants can use QR codes for digital menus. A restaurant could place a QR code on each table, which customers could scan to view the menu on their smartphone. The QR code would allow the restaurant to make real-time updates to the menu, as well as include detailed ingredient lists and even customer reviews of each dish.

  • Event registration
    Businesses that host events can simplify the registration or ticketing process using QR codes. An art gallery hosting a special exhibit, for instance, could use a QR code on posters advertising the event. People interested in attending could scan the code to register for the event or receive their digital ticket directly to their phone.

  • Social media engagement
    Businesses can use QR codes to grow their social media following and increase customer engagement. A local boutique could include a QR code in their bags or receipts that links to their Instagram profile, which customers could scan to follow the boutique on Instagram and stay informed about new arrivals, sales and events.

  • Track inventory
    Businesses can use QR codes internally to manage their inventory. A manufacturing company, for example, could use QR codes on individual parts or products. Staff could scan the codes at each step of the manufacturing or shipping process, allowing for real-time tracking and inventory updates.

Each of these examples showcases how QR codes can serve multiple purposes across different aspects of a business, from improving customer engagement and transaction efficiency to streamlining internal operations. Their versatility and ease of use make them a powerful tool in today's digital business landscape.

How to generate QR codes for payments

Generating QR codes for payments is a straightforward process, but the exact steps can vary based on the payment platform or service that you use. Below are the basic steps for generating a payment QR code:

  • Choose a payment service provider: Choose a payment service provider (PSP) that supports QR code payments. This choice might also depend on your region and overall business needs. Your payment service provider could be a banking institution, a digital wallet service like Apple Pay or a dedicated payment platform like Stripe.

  • Create a merchant account: You need to have a merchant account with the chosen service provider. This account will be linked to the QR code and will receive the payments. If you already have an account, you can use that; if not, you'll need to create one. Some providers, including Stripe, don't require businesses to open a merchant account, since these providers offer that functionality.

  • Access the QR code-generation feature: Log in to your account on the service provider's platform and look for the feature that allows you to generate a QR code. Typically, you can find this in the payment or tools section of the platform.

  • Enter payment details: The platform will prompt you to enter payment details. This could include your merchant ID, the specific account to which payments should be directed and potentially a set transaction amount if the QR code is for a specific product or service.

  • Generate the QR code: Once you have entered the necessary details, click on the "generate" button. The platform will create a unique QR code linked to the payment information that you entered.

  • Test the QR code: Before deploying the QR code, test it by scanning the code and confirming that it triggers the correct payment process and that payments are directed to the correct account.

  • Deploy the QR code: Once tested, the QR code can be displayed at your point of sale, on your website, on receipts or invoices, or used in any other manner that aligns with your payment strategy.

It's important to keep security considerations in mind when using QR codes for payments. Always use trusted and secure payment platforms and ensure that your QR codes are displayed or distributed in a manner that minimises the risk of tampering or unauthorised alterations.

To learn about how businesses can use QR codes with Stripe Payment Links, read about it here.

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