How to create QR codes for payments: A small business guide

This article includes tips, suggestions and general information. We recommend that you always do your own research and consider getting independent tax, financial and legal advice before making any important decision.

How do QR codes work?

A QR code may look like a random mix of scribbles and black-and-white squares, but each slice contains several layers of information.

When scanned with a compatible app, all that information gets put together in the right order for the code to be read, and the square markings in the corners of a QR code tell an app the orientation of the code.

But how do you scan a QR code? There is no right or wrong way. Customers can scan the code from any angle without worrying that it will be read backward.

Alignment markings embedded in the code tell the app if the surface the code is printed on is flat or curved, so the app can "straighten" out the code to read it correctly.

If you've noticed that QR codes have a space surrounding the square, you may be surprised to learn that space is considered part of the code. It's called the quiet zone, and it's there to help the smartphone app recognise where the code stops.

To help you understand further how and why they work, it might be helpful to break down how QR technology works into the six separate components that enable fast, reliable scanning and decoding:

• Quiet zone: This is the blank margin surrounding the code. It helps scanners distinguish the QR code information from its background, ensuring accurate detection.
• Finder patterns: The three large squares in the corners allow scanning software to identify the code position and orientation quickly.
• Alignment patterns: Smaller squares placed throughout the code enable correction of distortion, especially on curved or tilted surfaces.
• Timing patterns: Alternating black and white modules between the finder patterns helps the scanner determine the size of the data matrix and map rows and columns.
• Version information: Denotes the size and data capacity of the QR code, encoded near the finder patterns for quick reference by the reader.
• Data cells: The actual payload area where your information (URLs, payment details or text) is stored in binary form.

By combining these elements, QR codes can reliably and safely encode and transmit large amounts of data, making them ideal for payment transactions and more.

What are QR codes used for?

From sending emails to accepting payments, QR codes have numerous purposes. First, it’s important to understand that there are two different types of QR codes:

• Uneditable QR codes: This type of QR code stores data that, once created, will be uneditable. In other words, you won’t be able to update the QR code with different information. For example, if you create a QR code for a one-time campaign, there will be no option to revise that same QR code a few months later with a different campaign. These QR codes are best used for linking to a company website, email or another piece of information that is unlikely to change.
• Editable QR codes: These QR codes can be updated indefinitely. For instance, if you want to redirect customers from your website to a campaign landing page, you can simply amend the QR code without creating a new one or risking a 404 error.

No matter the type, QR codes can store all types of information, including (but not limited to):

• Payment portals.
• Links to websites, landing pages and other relevant online content for a business.
• Contact information.
• App download pages.
• Social media profiles.
• Discounts or promotions.

How do QR codes for payments work?

With QR codes, you can start accepting contactless payments quickly , all without physically handling cash, signing receipts or even interacting face-to-face.

So how does a customer use this little checkerboard box to pay for something?

Because a QR code can hold far more information than a barcode, it can be safely connected to payment processors like PayPal. Once scanned, customers are sent directly to your payment portal from their smartphones.

Here’s a quick breakdown of how it works.

QR codes for payments encode payment information, such as a merchant’s account details. Customers can then use their smartphones to scan this QR code, which is generated by the business or payment service provider.

The scanning process allows the payment app to decode the information and initiate the transaction, enabling swift and convenient cashless payments.

Types of QR codes

1. Static QR codes store fixed data that cannot be changed once generated. They are perfect for permanent links, such as a business website URL.
2. Dynamic QR codes contain a short URL that redirects to your content. You can update the destination URL anytime without changing the QR code graphic itself, which makes it ideal for evolving marketing campaigns.
3. Numeric mode encodes only digits (0–9). This makes it the most storage-efficient option and is suitable for numerical IDs or phone numbers.
4. Alphanumeric mode supports digits, uppercase letters and a few symbols ($ % * + - . / : ), balancing capacity and character variety.
5. Byte mode handles the full ISO/IEC 8859-1 character set (Latin-1), accommodating text in multiple European languages and binary data like URLs.
6. Kanji mode is optimised for Japanese characters from the Shift JIS set, efficiently encoding two-byte characters in fewer bits.

Choosing the right type of QR code means you have the necessary capacity and flexibility, whether you’re linking to a static landing page or updating promotional content on the fly.

Different styles of QR codes

• QR code (ISO/IEC 18004): The original two-dimensional barcode type widely used for payments, information and tracking.
• Aztec code: No quiet zone required; its compact design is ideal for mobile boarding passes and tickets.
• MaxiCode: Designed by UPS, it arranges data in a conical pattern around a bullseye, optimising automated parcel sorting.
• PDF417: A stacked linear barcode supporting up to 1.1 kB of data per symbol, often used on driver’s licenses and transport tickets.
• Semacode: Based on the QR standard but used primarily for linking physical objects to online content through small, square codes.

Each of the different QR code styles offer unique trade-offs in data capacity, error correction, and scanning robustness.

What are the benefits of offering pay with QR code to your customers?

There are many benefits of QR code payments, such as:

• Time savings: Once you create a QR code, you can start taking payments immediately. Just print your unique QR code on paper, stickers and signage, and then display it where it's easy for customers to scan. You can also display your QR code online.
• Efficiency: QR codes can hold much more data than UPC barcodes, making them ideal for complex processes like payments.
• Reliability: Because QR codes are read in various directions, they can still be recognised by a scanner, even if the QR code itself is damaged or partially torn.
• Speed and accuracy: QR codes can quickly and accurately share details needed to connect buyers and sellers in real time. Simply scan the QR code and click through the link to access the information in seconds.

How to get a QR code for your business and use it to accept payments?

Ready to start using QR codes for payments? When shopping in person, paying via QR code can be as simple as clearly displaying the code and allowing customers to scan it with their phone’s camera and pay via an online payment processing portal or an app like PayPal.

Here's a quick step-by-step guide on how to get a QR code for your business and accept QR payments with PayPal:

1. Get your QR code: Not sure how to create a QR code for payments? To access your QR code, log in to your PayPal account and download it. You can also create your code using the PayPal Business app.
2. Display your QR code: Print your code and hang a copy wherever a customer can easily scan it during the checkout process, like on your register or counter. You can also display your QR code on your register screen for customers.
3. Shopper scans the QR code: When your customer is ready to check out, they log in to the PayPal app, click Scan and Pay, and then Allow, which tells the app it can use the phone's camera to scan the code. They hold their phone up to your QR code like they're taking a picture, and the PayPal app uses the camera to read the code and connect to your business's PayPal account. Users can also use a native scanner to launch the PayPal app.
4. Receive your payment: The customer then enters the amount they owe you and presses Send. Their payment appears in your PayPal account, and the transaction is complete.

Getting started with QR code payment solutions

When selecting a QR code payment solution provider, consider these key factors:

• Compatibility: Opt for a provider that supports a wide range of devices and operating systems to accommodate your customer base. Ensure the solution is compatible with popular mobile payment apps and can be seamlessly integrated into your existing POS system.
• Security: Choose a provider that employs robust encryption protocols and complies with industry standards for secure transactions.
• Ease of use: Select a solution that offers a simple and intuitive interface for both customers and staff. The scanning process should be straightforward, and the payment confirmation should be clearly displayed.
• Customisation: Look for an option that allows you to incorporate the QR code in your brand and your way of doing business. This may include integrating the payment QR code in your printed marketing materials.
• Transaction speed: Swift transaction processing is essential for a seamless customer experience. Choose a solution that ensures payments are processed quickly.
• Cost: Evaluate the pricing model of the provider. Some charge a flat fee per transaction, while others may deliver a subscription-based model.
• Multi-currency: If your business deals with international customers or currencies, choose a provider that supports multi-currency transactions.

Set up a QR code for payments with PayPal

Setting up a QR code is relatively simple and quick. It doesn’t require special hardware or scanners, making it easy to use.

PayPal makes it particularly straightforward to create and deploy QR codes that let customers pay in person without the need for additional hardware.

These are also compatible with the PayPal POS system, which means they can also be used by retail stores with conventional setups.

1. Log in to PayPal: Go to your PayPal business account and navigate to the Accept Payments > QR Codes section.
2. Generate your QR code: Click ‘Create QR Code’ and choose whether you want a single code for all products or specific codes per item or campaign.
3. Customise appearance: Select a colour scheme and add your business logo if desired, ensuring it aligns with your branding.
4. Download & display: Download the high-resolution image, print it on receipts, stickers or posters, or display it on a tablet at checkout.
5. Accept payments: Customers scan the code with their PayPal app or smartphone camera, enter the amount owed and confirm the transaction. The funds should reach your PayPal balance quickly.

This smooth approach lets you accept contactless payments at markets, pop-up shops or in-store, reducing friction and boosting conversion rates.

Ensuring security and data privacy of QR code payments

Payment security is often top of mind for merchants. Here are some best practices for secure payments when using QR codes:

• Encryption: Ensure the QR code payment solution uses strong encryption protocols to protect sensitive payment data during transmission and prevent unauthorised access.
• Secure networks: Process QR code payments over secure and trusted networks. Avoid public or unsecured Wi-Fi networks.
• Compliance: Ensure that your QR code payment system complies with relevant data protection and privacy regulations, such as GDPR, HIPAA, or PCI DSS, depending on your industry and location.
• Regular updates: Keep the QR code payment app and any associated software up to date with the latest security patches.
• Secure infrastructure: The security of the QR code payment system goes beyond the QR code itself. Ensure your backend systems, databases, and servers are also secure and protected against unauthorised access.

With QR codes, you can start accepting contactless payments in just a few minutes.