What Are QR Code Payments? How Small Businesses Can Accept Scan-to-Pay Transactions

If you look around, everyone has a smartphone in their hands. QR code payments let consumers use their mobile phones to scan to pay. Restaurant guests complete transactions while finishing their coffee, and spa clients click to pay before leaving their private rooms. This payment method is fast, convenient, and secure.

On the business side, you don’t need hardware or a website. QR code payments are cost-effective and easy to implement. Let’s explore what a QR code is, how to generate one, and how you can use it.

What are QR codes?

Quick response (QR) codes are machine-readable barcodes in a square shape. They have vertical and horizontal lines, dots, or patterns, which form the pixels of the scannable symbol. The two-dimensional barcode contains data, such as a website link, product details, promo offers, or payment information.

Originally, QR codes' flexibility enabled Japanese auto manufacturer Denso Wave to streamline production. QR codes don’t have the limitations of universal product codes (UPC), which can only be scanned in one direction. And when smartphones introduced cameras with scanning technologies, everyone had a pocket barcode scanner.

Small businesses could add QR codes to their toolkits to manage inventory and assets. Consumers can scan QR codes from in-store displays or computer screens to instantly find pricing details or score a limited-time offer. Adults can sign children up for activities using their preferred payment method or click to donate to a local charity.

How do QR code payments work?

The QR code payment process is straightforward, but slight differences exist between dynamic and static code methods. A customer scans the QR code with their smartphone’s camera. For static QR codes, the cellphone app connects to the web payment form, which is a payment gateway. Customers enter the transaction details themselves then authorize payment. 

For dynamic codes, the amount they owe shows after scanning the code and customers only need to confirm payment. Both QR code formats allow buyers to authorize payments via their smartphone PIN or biometrics. POS systems, e-commerce platforms, and reputable payment processing providers offer QR code payment solutions. 

A QR code payment is similar to a point-of-sale (POS) terminal, but without the need for hardware. Like top POS solutions, you can offer many payment methods, including major credit cards and mobile wallets like Apple Pay and Google Pay.

You can also integrate scan-to-pay QR codes with your website or e-commerce platform. This approach is ideal for companies with existing sites as it helps customers feel secure when they see your branding and know they can trust the website. But you don’t need an online presence or checkout page to use QR code payment apps. 

How to set up QR code payments

The steps to generate a QR code for payment vary by service, but the process is relatively simple. First, you need a way to accept and process payments, and then you can create QR codes. 

Here’s how to create a scan-to-pay QR code:

• Select a provider: First, see if your current POS, e-commerce, or processing service supports QR code payments. If not, compare merchant account solutions like Helcim, Clover, or Payment Depot.
• Apply for an account: Open an account to process online payments. Some providers, like Square or Stripe, approve applications almost instantly, whereas others require more information but could offer lower rates.
• Open your dashboard: Most account providers supply an online dashboard with QR code generators. If not, you can find this feature in the tools or payments section of your portal.
• Add payment information: Enter your merchant identification number and other required details, such as the transaction amount or payout account.
• Generate the payment QR code: Most services have a clickable button to generate or create the code. Once you finish entering the details, simply click the button to finish.
• Test the code: Always scan the QR code before using it for customers. Verify that it sends you to the correct page and follows the desired checkout flow.

The above example is for a general QR code you can display almost anywhere. Customers can point their cellphone at the code to scan and pay on in-store displays, at farmers markets, or on your website. However, you can generate QR codes for one-time payments for individual clients on invoices or when booking a service.

Types of QR codes 

There are two main types of QR codes: static and dynamic. A static code is fixed, whereas a dynamic code changes for each transaction. You can use both methods to accept credit card payments.

Here’s how static and dynamic QR codes differ:

• Structure: Static QR codes are not editable. You may have a permanent code linked to your merchant account. Dynamic QR codes are unique, and you generate a new code for every purchase.
• Payment process: Customers only need to scan a dynamic code and authorize payment. This method requires less effort than a static code, which starts a transaction but doesn’t store payment or customer information.
• Features: Static codes are easier to set up and may cost less than dynamic codes, making them a good choice for low budgets. But you can track dynamic codes to see where customers pay and when transactions go through.  

When to use static vs. dynamic QR codes for business payments

Small businesses often use static QR codes for one-time payments or low-volume sales channels. Dynamic codes automate the payment process, making them a good choice for busy restaurant and retail environments. There are pros and cons to each method, and you may prefer one over the other depending on the type of business you own or start. 

Consider the following use cases for static vs. dynamic QR codes: 

• Static QR codes: Best for freelancers, pop-up shops, farmer’s markets, small cafes, or startups. Static codes handle one-time payments at your business, but are tedious when processing many customer checkouts.
• Dynamic QR codes: Best for e-commerce shops, Amazon stores, brick-and-mortar locations, restaurants, or subscription or membership businesses. Dynamic codes support one-time and recurring payments. 

Choosing a QR code payment app 

There is no shortage of QR code payment apps. Small businesses can choose basic payment apps or software bundles with invoice, POS, or e-commerce tools. Consider your business model and processing volume when weighing your options. Then compare costs between solutions by calculating each provider's effective rate.

Explore these contactless and QR code payment platforms:

• Credit card processors: Many payment processing companies offer QR code generators. Examples include Stripe and Helcim. You can sign up for a merchant account to accept credit cards online, in-store, or through QR codes.
• Restaurant POS systems: Look for POS software with native QR code generators. These let customers scan and pay for in-store or delivery orders. Examples include Clover, Lightspeed, and Toast.
• E-commerce platforms: Let customers check out from your online store or social media channel without manually entering payment details. Options include Wix and GoDaddy.
• Invoicing software: For those looking to add QR codes to their invoices, Zoho Books offers native scan-to-pay QR codes, whereas you can use a third-party integration to generate QR codes for QuickBooks Online invoices.
• QR code payment apps: For peer-to-peer transfers or infrequent sales, consider Zelle, PayPal, and Venmo. 

Top QR code payment providers for small businesses

For small businesses that want to accept multiple payment methods, a credit card processing service is a good solution. In addition to accepting QR code payments, these providers process in-person and e-commerce transactions via card terminals, tap-to-pay on iPhone, and invoicing. The best credit card processors support popular payment methods, including mobile wallets, and may offer merchant tools, like free POS software. 

Here are four QR payment apps to consider:

• Stax: Designed for high-volume sellers, Stax integrates seamlessly with existing e-commerce and POS systems while providing pay links, QR code payment tools, and invoicing solutions.
• Payment Depot: With no set-up or cancellation fees, Payment Depot is a great option for accepting mobile, contactless, and traditional payment methods.
• Clover: This POS vendor offers flat-rate transaction pricing and bundled hardware plans for retail and restaurant businesses. Clover’s scalable subscriptions streamline checkouts with QR codes on receipts.
• Helcim: With interchange-plus rates and tons of free features, including free hosted payment pages, QR codes, and invoicing tools, Helcim is ideal for small businesses looking for an alternative to flat rates.

QR code payment security risks and fraud prevention tips

QR code payments are generally safe when small businesses use trusted processors and follow best practices. However, in the digital age, no system is 100% secure. Customers can fall for QR code scams involving fake or altered codes. Scammers may link QR codes to malicious websites that steal payment information or download malware to devices, giving bad actors access to bank accounts or secure credentials. 

The best way to reduce your risk is to sign up for a secure payment system. Top providers offer tools to monitor transactions and comply with payment industry standards. But this step alone doesn’t ensure protection. 

Follow these tips to reduce your risks: 

• Understand your responsibilities: When you accept QR code payment, your company must comply with PCI DSS (payment card industry data security standard). Review your processing contract and documentation to see what you must do and what the provider handles.
• Use dynamic codes when possible: Creating QR codes on demand makes it harder for cybercriminals to duplicate them. However, you should test static and dynamic code regularly to ensure they continue to work on your website or payment processing platform.
• Be diligent about physical codes: People can put stickers over your QR codes or even duplicate printed materials, but swap out your code for theirs. Laminate larger signs and put smaller materials in plastic holders.
• Increase fraud awareness: Show staff examples of quishing (QR phishing). If you have multiple printed QR code displays, make sure your daily opening list includes a physical inspection of each display. Use social media to remind customers to only scan your official codes.   

Benefits of using QR codes for payments

QR code payments benefit both customers and small businesses. This method is contactless, fast, and affordable. According to Juniper Research, retail QR code payments are projected to grow 79% globally over five years, rising from 454 billion transactions in 2025 to 741 billion by 2030. 

The top advantages of QR codes for payments include:

• No hardware required: You can accept credit and debit card payments without a card reader or terminal.
• Able to serve multiple customers: Shoppers can pay from their smartphones without a cashier, allowing your business to handle unlimited buyers.
• Versatile placement: You can put QR codes on your website, receipts, invoices, or physical signs. This flexibility is great for small businesses selling across multiple channels, such as in-person pop-up shops and social media.
• Secure transactions: The customer’s smartphone has native authentication methods (face or fingerprint scan and passcode), and processing goes through the card network.
• Seamless in-person experiences: Forget the swipe, dip, or tap. Customers point their phones to pay. They can use their preferred method without navigating an unfamiliar terminal.

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