Updated on February 04, 2020
10 min read

I precisely remember the first time when I saw a QR code. I thought that it was just a fancier version of a barcode. Later on, I was pleasantly surprised to see how different and advanced this technology turned out to be.

Today, we all are well familiar with the iconic black and white square design of a QR code. The increased penetration of smartphones and access to high-speed internet has led to the massive adoption of the QR codes. That’s the reason why we see it almost everywhere whether it’s for shopping, movies, ads, etc.

According to research by Statista, around 11 million households in the US alone will scan a QR code in the year 2020. This number is way more than 9.76 million scans which were recorded in the year 2018.


US is not the only country where QR Codes are widely used. Countries like France, Australia, Malaysia, Singapore, Switzerland, Thailand, Indonesia, and Canada are not far behind in the race.

Furthermore, QR code is also witnessing a surge in Africa and the Middle East region where its total usage jumped from 12% in 2017 to 18% in 2018.

In this article, we will see what QR codes are? What are its different types? How does it work? What are its benefits and drawbacks? And everything else that you should know about the QR Codes.

So, let’s see what QR codes actually are.

What is QR code and what’s its history?

QR is an abbreviation for Quick Response. The QR Code is nothing but a two-dimensional code. It has a pattern of black squares that are arranged on a square grid with a white background. Imaging devices such as smartphone cameras can be used to read these QR Codes.

QR Codes are quite similar to a bar code except for the fact that it can store a larger amount of information per unit area.

A Japanese company named Denso Wave in the 1990s invented the QR Codes. Initially, QR codes were used in the automotive industry mainly for production, tracking, and shipping. However, slowly it got adopted outside the automotive industry for applications that included item identification and marketing.

Many experts have said that the QR codes didn’t take off as expected in its initial years. However, in some countries, specifically China, it played a crucial role in the rapid growth of QR code mobile payment services as it enabled businesses to accept digital payments without investing in any hardware such as the point of sale terminal.

How do they work?

One major difference between QR codes and barcodes is that the QR codes can be scanned from both paper and screen. On the other hand, linear barcodes can be scanned only from the paper. That’s precisely the reason why you see QR codes both on apps as well as at the online stores.

To scan a QR code, you need to have one of the following things:

  • A barcode reader that has the capability to scan QR codes.
  • Tablet or a smartphone with an inbuilt camera.

Nowadays, there are also many QR code scan apps available that allow users to scan the QR codes with the utmost ease. All the user has to do is open the camera and place it towards the QR code; this will immediately identify it and subsequently open a push notification. The user then just has to tap on it to finish the operation.

There are also some payment and banking apps that can process QR codes for the purpose of bank transfers and payments.

There are many ways in which a QR code can be processed. Some of it is mentioned below:

Scanning recipient’s QR code with a smartphone

In this process, the user has to open the phone camera or the relevant QR code scan app. Afterward, they have to scan the code that is displayed on an individual product, paper bill, or at a store’s checkout. Various offers and loyalty points might also be applied via the application in case it’s a store specific application.

Retailers scanning QR code on user’s phone screen

In the QR code payment process, the user opens the payment app once the total transaction amount is set in the POS system of the retailer. The QR code payment app displays a QR code that identifies with the user’s card details. The retailer then scans the QR code with a scanner thus concluding the transaction.

App-to-app payments

In this process, both the sender and the recipient open their applications. The sender then scans the unique QR code that is generated in the recipient’s application. The sender, at last, confirms the amount to be paid and taps to complete the payment.

Types of QR Code

There are two types of categories for QR codes. Let’s see them one by one.

Static QR code

In this type of QR code, the URL of the actual destination website is placed directly in the QR code. The content of these QR codes is not editable. These can’t be tracked; however, they can be rectified by adding the URL.

Static QR codes are used for facilitating quick and simple payments in various industries like delivery service, in-home services, in-store retails, taxi drivers, and street vendors. In all of this, all a user has to do is just scan the QR code to make the payments without any hassles.

Dynamic QR code

The dynamic QR code is editable. It also comes with additional features such as access management, password protection, scan analysis, and device-based redirection. With dynamic QR code, you can also find out the various details like the number of people who scanned the code, the type of device they used for scanning, the scanner’s location, etc.

Read More: Skyrocket your merchant’s profit with Digipay

Dynamic QR codes are now widely used by the merchants as it conveys both the purchase amount as well as the merchant information. As a result of this feature, the user has to just accept the transaction in their application. Moreover, it also means that the person who sends the QR code has more control over the payment amount.

In the case of the static QR code, the user had to enter the purchase amount and then the merchant had to carefully verify it. However, the dynamic QR code offers a better payment experience to both users and merchants by eliminating all those factors.

Benefits of using QR codes

QR code comes with several benefits that help you to reach out to all your potential customers. Let’s have a look at a few of them.

Instant payments

One of the biggest advantages of using QR codes is that it facilitates instant payment. Making payment via QR codes is extremely quick as compared to other modes of payment. All a user has to do is simply open the QR code scan app, scan the QR code, and confirm to process the payment. Within a few seconds, the payments are made.

Top-grade security

Making payments via QR codes is very secure. It’s because the QR code is nothing but just a tool that is used to exchange information. Any data which is transferred via QR codes is encrypted thus making the payment foolproof secure.

Easy to set up

Setting up QR code payments is extremely easy. You don’t need much of an infrastructure. You only require a smartphone with a camera and a QR code which is either printed or in the electronic form. The usage of QR codes for payments also eliminates the requirement of point of sale machine or any other special equipment used for payments.

Higher reliability

QR code payments are a foolproof payment method as it eliminates the probability of any kind of error. The pattern of black boxes consists of unique data which enhances the reliability of the QR code payments.

Major use cases of QR code payments

QR codes offer easy payment solutions to several businesses. Let’s have a look at some of the major QR payments use cases.

Fuel retailers

Fuel retailers can also use QR codes to make payments easy for their users. There are fuel retail wallet solutions that allow the users to fuel their car by simply entering the amount of fuel in the application. These applications come with multiple modes of payments which also includes payment via QR codes scanning.

E-ticket booking

QR codes are also used in E-ticket booking. The E-ticket booking application enables its users to book tickets for bus, flight, train, movies, amusement parks, and many more by just making a few clicks on their phone. These apps have multiple modes of payment and QR code payment is one of them.

Toll payments

Toll booths can also use QR codes to facilitate quick and simple toll payments. There are toll payment wallet apps that allow the user to make cashless toll payments. These apps include multiple cashless payment options that include QR code payments along with RFID and NFC cards.

Parking payments

QR codes can be used as a mode of payment in a parking payment solution. A parking payment solution allows its user to search and book his parking space through a mobile application. Once the parking space is booked, the user can simply scan the QR code present at the parking garage to make the payment.

Street vendors

QR codes are widely used by street vendors that have a minimal range of goods. They simply print a QR code for all their product that consists of its description and price. To purchase any product, the user has to scan the QR code and confirm to make the payment.


Micro-business that has a small range of goods also uses QR codes for payments. Here the merchant generates both the invoice of a particular amount and the QR code. He then displays the QR code on the screen of the smartphone. To make the payment, the customer has to scan the merchant’s generated QR code from their mobile wallet application.

Read More: Automate micro-finance services with Digipay

SMEs (Small and medium-range businesses)

In this, the merchant prints QR code for each of his vendors that indicate the cash register location and other details. To make the payment, the customer has to scan the vendor’s QR code. The vendor then sends the receipt to the customer’s smartphone from the cash register. Finally, the customer confirms the payment.


I hope this article helped you to understand several things about QR code like what they are? What’s its history? How do they work? What are its types? And at last its pros and cons. The QR codes technology is being adopted at an accelerated rate throughout the world due to its several benefits.

However, it also comes with its own set of cons as mentioned in the article. It will be interesting to see how this technology adapts to the ever-changing world of technology. Only time will tell whether it will evolve further or perish forever.


Nikunj Gundaniya

Product manager of Digipay.guru, one of the leading digital wallet solution. He is a visionary leader whose flamboyant management style has given profitable results for the company. He believes in the mantra of giving 100% to his work.

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