Definition
QR code payments are a form of contactless payment where a transaction is initiated by scanning a Quick Response (QR) code with a smartphone camera. The code contains encoded payment information, typically a link to a payment portal or the merchant’s account details, and scanning it triggers the payment process through the customer’s mobile banking app or digital wallet.
Merchant-Presented vs Customer-Presented QR Codes
There are two common models. In the merchant-presented QR model, the merchant displays a static or dynamic QR code at the point of sale, and the customer scans it with their phone and enters the payment amount. In the customer-presented QR model, the customer displays a QR code generated by their banking app and the merchant scans it.
QR Code Payments Around the World
QR code payments are particularly widespread in Asia, where platforms like Alipay and WeChat Pay established them as the default payment method for hundreds of millions of consumers. In Australia, QR code payments are available through several banking apps and payment platforms but have not displaced NFC as the dominant contactless method for in-store transactions.
Advantages for Merchants
For merchants, QR code payments offer some practical advantages. A static QR code can be printed and displayed at no cost, requiring no additional hardware beyond a smartphone to generate it. This makes it accessible for market traders, pop-up businesses, or service providers who do not operate from a fixed location with a standard EFTPOS terminal.
QR Code Payment Security
Security in QR code payments can be a concern. A fraudulent QR code placed over a legitimate one in a public location could redirect payments to a different account. Dynamic QR codes (generated fresh for each transaction) mitigate this risk because they expire quickly. Customers should verify they are scanning a code that directs to the correct merchant.