The way people pay is changing fast. More customers are abandoning swipe cards in favor of tap-to-pay and scan-to-pay options, and businesses must choose whether they want to work with near-field communication (NFC) or QR codes. One is immediate and built into contactless cards and digital wallets, while the other is flexible, inexpensive, and works anywhere you can display a code. Both have their strengths, and smart businesses are figuring out how to use them in the right places.

Below, we’ll explain what NFC and QR code payments are, how they differ, and how to determine which one is the best choice for your business.

What’s in this article?

• What are NFC payments and how do they work?
  
• What are QR code payments and how do they work?
  
• Advantages and disadvantages of NFC payments
  
• Advantages and disadvantages of QR code payments
  
• Which payment method is better for different business types?
  
• How Stripe helps businesses integrate NFC and QR code payments
  

What are NFC payments and how do they work?

NFC is the technology behind tap-to-pay transactions. It allows a phone, smartwatch, or contactless card to communicate with a nearby payment terminal. When a customer taps their phone or card, a radio frequency transmits payment details to the terminal, which communicates with the payment processor for approval. The entire transaction is completed within seconds. If you’ve used Apple Pay, Google Pay, or a contactless credit card, you’ve already used NFC.

NFC payments are now the norm in many places. In the United Kingdom, for example, 93% of cards in circulation in March 2024 were contactless cards. Accepting NFC payments used to require a contactless payment terminal, but newer solutions—such as Apple’s Tap to Pay, which lets an iPhone accept NFC payments directly—remove the need for extra hardware.

What are QR code payments and how do they work?

QR code payments let customers pay by scanning a black-and-white square barcode on their smartphones. The barcode can be printed, displayed on a screen, or even attached to a product. The code typically directs the customer to a payment page, where they can authorize the transaction through a digital wallet or banking app.

There are two types of QR codes:

• Static QR codes: These don’t change, which is ideal for general payments. For example, a food truck might display one code for all transactions.

• Dynamic QR codes: These encode the exact amount and order details and can change with each transaction. Because they function in real time, dynamic QR codes require an active internet connection, unlike static QR codes.

Accepting QR code payments doesn’t require any special hardware; it requires only the QR code itself. Businesses can generate a QR code through a payment provider, display it, and let customers scan to pay. This is an easy way to go cashless that’s convenient for pop-up shops, retail stores, or companies that want to add a payment option without upgrading hardware.

The COVID-19 pandemic accelerated the global adoption of QR code payments as businesses sought touch-free solutions. In 2024, the global QR code payment market was valued at $14.74 billion, with the Asia-Pacific region leading adoption and North America expected to be the fastest-growing market over the next few years.

Advantages and disadvantages of NFC payments

NFC payments are fast, secure, and widely accepted, but they come with some downsides. Here are some of the benefits and drawbacks of NFC payments.

Advantages of NFC payments include the following:

• High speed: NFC is one of the fastest ways to pay—all it takes is a quick tap. This keeps lines moving and improves the checkout experience.

• Strong security: NFC transactions use encryption and tokenization so sensitive card details aren’t transmitted. Digital wallets such as Apple Pay and Google Pay add extra layers of security with biometric authentication, which can prevent fraud better than traditional magnetic stripe cards.

• Customer convenience: Customers can pay with phones, watches, key fobs, NFC rings, NFC-enabled cards, smartphones, and smartwatches.

• Option for no contact: NFC transactions are more hygienic than many other payment methods, because customers don’t need to hand over a card or touch a payment terminal. NFC grew in popularity during the pandemic and continues to be a preferred choice for many shoppers.

Businesses should be aware of NFC payments’ limitations, including the following:

• Hardware needs: Businesses need contactless payment terminals. Some older point-of-sale (POS) systems might require upgrades, which could be a barrier for small businesses.

• Limited adoption: While many customers have NFC-enabled cards or phones, not everyone uses them. Some customers prefer traditional chip-and-PIN transactions, and others might not have digital wallets set up on their phones. NFC works best when it’s offered alongside other payment options.

• Transaction limits: Some regions impose tap payment limits, with any payments above them requiring a PIN. While digital wallets often bypass these limits, not all customers use them.

• Technical glitches: NFC requires close proximity to the terminal. If the reader is not working properly, customers might need to adjust their phone or card position, which can slow things down. Some cases of signal interference from other electronics or metal surfaces can also cause issues.

Advantages and disadvantages of QR code payments

QR codes are cost-effective, flexible, and easy to set up, which makes them an appealing payment option for many businesses. But as with any technology, they also have trade-offs that businesses should take into account.

Here are some benefits of QR code payments:

• Low cost: QR codes require almost zero hardware investment. Businesses don’t need special terminals; they just need a printed or digital code that customers can scan. This makes QR code payments ideal for small businesses, pop-up shops, and independent sellers.

• Accessibility: QR code payments don’t need extra chips, cards, or banking requirements beyond a mobile payment app. This makes them a great option for regions where credit card penetration is lower but mobile payments are common.

• Flexibility: QR codes work across multiple environments, including in-person payments (e.g., scanning a QR code at a store or market stall), online-to-offline transactions (e.g., scanning a code on a screen to pay from a phone), and self-checkout and invoices (e.g., customers scanning a code on a restaurant bill to pay directly).

• Ease of integration: QR codes can be dynamically generated and linked to POS systems, order tracking, and inventory management. For instance, a café can assign a unique QR code to each table’s bill; once the code is scanned and paid, the system automatically marks that bill as settled.

• Contactless access: QR codes allow customers to pay without touching a terminal or handing over a card. This makes them both hygienic and private since customers interact only with their own devices.

QR codes won’t work in every scenario. To complete QR code transactions, a customer needs a working smartphone, a payment or banking app, and an internet connection. If they don’t have a smartphone, if their battery dies, or if they have bad reception, they might not be able to pay.

Here are some other considerations to be aware of with QR code payments:

• Slower checkout: Scanning a QR code involves more steps than a simple tap. This added friction could slow down checkout lines compared to NFC payments, which can be an issue in high-volume businesses such as grocery stores.

• Security risks: QR codes themselves don’t include security measures. The app or platform that processes the transaction handles security. Scammers can exploit this by swapping real QR codes with fraudulent ones. For instance, a fake QR code sticker placed over a restaurant’s real code could redirect payments to a scammer’s account. Businesses that use static QR codes should regularly check that they haven’t been tampered with. Dynamic QR codes, which are unique to each transaction, are more secure but require a digital POS system.

• Customer adoption: Not everyone is comfortable or familiar with QR code payments. In restaurants, for example, some diners might wait for a paper check instead of scanning the table’s QR code. Clear signage and staff guidance can help, but businesses might need to educate customers before QR codes become a comfortable option.

Which payment method is better for different business types?

Different types of businesses have different needs for their payment experiences. For example, large businesses (e.g., chains, big-box stores) tend to favor NFC since it integrates with advanced POS systems, loyalty programs, and global credit card networks. Small businesses and startups often lean towards QR codes first since they cost almost nothing to implement.

Here’s a closer look at different types of businesses and whether they’re better suited for NFC payments, QR code payments, or a mix of both.

Retail stores and supermarkets

If you have a checkout counter with a steady flow of customers, NFC is the best fit. But QR codes can work as a supplement for specific use cases. Most modern POS systems already support NFC, which makes it an easy upgrade for businesses that take credit cards. High-volume businesses rely on speed, and tap to pay is faster than scanning QR codes.

Restaurants and cafés

NFC payments keep lines moving at fast-food restaurants and coffee shops. But QR codes can be ideal for sit-down restaurants and bars as customers can conveniently pay at the table. Customers can split bills, leave tips, and check out without waiting for a server to process a card. Offering both options can be a good idea, as some customers will probably prefer to pay with a card.

Ecommerce and online businesses

Online stores can’t use NFC payments because they require close proximity. QR codes, however, connect online and offline: customers can scan a QR code on a website to go directly to checkout. Some retailers embed QR codes in invoices or receipts for easy post-purchase payments. If you sell online, use QR codes to connect offline shoppers to online checkout.

Service businesses and freelancers

NFC payments work great if you have a mobile POS reader or an NFC-compatible smartphone (e.g., an iPhone with Tap to Pay), but QR codes work if you need a simple, tech-light solution. With QR codes, you can send invoices, link to a checkout page, or accept payment on the go.

Events, festivals, and pop-up shops

QR codes are inexpensive and easy to implement—all you need to do is print a sign. Farmers markets, food trucks, and merch booths often use QR codes linked to payment providers such as Stripe. But high-traffic events benefit from NFC, since a tap is much faster than scanning and loading a payment page. If possible, these types of businesses should offer both: QR codes for customers who want app-based payments and NFC for quick card taps to keep lines moving.

How Stripe helps businesses integrate NFC and QR code payments

Adding new payment options can seem complicated, but Stripe makes it easier for businesses to support NFC and QR code payments in a single system. Businesses can use the Stripe app to accept both payment methods from a smartphone. Stripe will collect all transactions in the same Stripe account for easy reconciliation and automatically handle PCI compliance, encryption, and fraud detection (the latter via Stripe Radar).

Here’s how each of these payment types works with Stripe.

NFC payments with Stripe Terminal

Stripe has contactless card readers such as the Stripe Reader M2, which supports tap payments from cards and digital wallets. If you don’t want a separate reader, you can enable Tap to Pay on iPhone through the Stripe Terminal SDK, which lets businesses accept NFC payments directly via mobile devices. All NFC transactions go through Stripe’s processing system with built-in encryption, tokenization, and compliance.

These are valuable payment options for retailers, in-person businesses, and mobile businesses that need to accept fast, tap-to-pay transactions.

QR code payments with Stripe Payment Links

Stripe lets businesses turn any payment link into a QR code with one click. A business can generate a QR code for a fixed-price item, an invoice, or a donation and display it anywhere—on a screen, printed sign, or receipt. Customers who scan the code can pay using a card, digital wallet, or other Stripe-supported methods. QR codes connected to payment links never expire, unless the business disables them.

These are a good payment option for restaurants (for customers who want to pay at the table), event vendors, service providers, and businesses that want an easy way to accept payments without additional hardware.