QR code payment

QR code payment is a contactless payment method where payment is performed by scanning a QR code from a mobile app.[1] This is an alternative to doing electronic funds transfer at point of sale using a payment terminal.[2] This avoids a lot of the infrastructure traditionally associated with electronic payments such as payment cards, payment networks, payment terminal and merchant accounts.

To make a QR code payment, the consumer scans the QR code displayed by the merchant with their smartphone to pay for their goods.[3] They enter the amount they have to pay and finally submit.[3] This is a more secure card-not-present method than others.[3]

History

The QR code system was invented in 1994 by Masahiro Hara from the Japanese company Denso Wave.[4]

The first mobile wallet app for cryptocurrency Bitcoin featured the ability to send and receive payments with QR codes in March 2011.[5] In 2011, Chinese company Alipay designed a QR code payment method which allowed partnering offline stores to accept payment by scanning an individual’s QR code in Alipay Wallet.[6] In 2014, Chinese technology company Tencent introduced a similar feature on its messaging app WeChat to allow its users to make QR code payments.[7] QR code payment has helped mobile payment become the most popular method of payments in China, accounting for 83% of all payments as of 2018.[8] Nearly all shops, street vendors, most metro systems, buses, and taxis in Mainland China accept either WeChat Pay, Alipay, or Cloud QuickPass for payment.[9]

In 2020, PayPal announced the ability to pay with QR codes in its mobile app.[10]

Usage by industry

China
Wuhan Metro introduced QR code payments across the whole network

Most metro systems, buses, and taxis in Mainland China accept either WeChat Pay or Alipay for payment. The national railway operator, China Railway, also accepts the two major apps for payment.

India

Line 1 of the Mumbai Metro in India allows users to purchase a ticket on their phones using QR code payments. Instead of swiping an RFID card or single-use token, a QR code is generated on the Paytm app which is then read by a scanner mounted on the turnstile.[11]

Cryptocurrency

Today's projects in the cryptocurrency space have significant incentive to facilitate crypto payments for their users. QR codes can facilitate these transactions.

Cryptocurrency wallet addresses are made up of a series of letters and numbers that can be longer than 34 characters, which can be inconvenient to enter manually to perform a transaction. By using a QR code generator app, that long address can be turned into a QR code.

See also

References
  1. "Scan to pay. How QR code payments work - Dignited". 11 January 2018.
  2. "China begins regulating QR code payments". 28 December 2017.
  3. "How QR codes are changing e-commerce". 19 October 2017.
  4. 2D Barcodes - Japan's Top Inventions | NHK WORLD-JAPAN On Demand, retrieved 2020-06-23
  5. Andreas Schildbach (August 6, 2012), Google Playstore: Bitcoin Wallet, archived from the original on 2012-08-06
  6. "A Hangzhou Story: The Development of China's Mobile Payment Revolution" (PDF).
  7. Derrick A Paulo (October 29, 2017). "WeChat phenomenon: How a messaging app helped spark China's cashless revolution".
  8. "Payment methods in China: How China became a mobile-first nation". daxueconsulting.com. Retrieved 2020-06-23.
  9. ""无现金时代"的主角——移动支付 | 中国文化研究院 - 灿烂的中国文明". chiculture.org.hk. Retrieved 2020-06-23.
  10. PayPal Holdings, Inc (May 19, 2020), PayPal Rolls Out QR Code Payments for a Touch Free Way to Buy and Sell In-Person
  11. "Paytm introduces QR-based metro tickets for Mumbaikars". Business Today. 17 November 2017. Retrieved 17 November 2018.
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