QR code payment is a

contactless payment Contactless payment systems are credit cards and debit cards, key fobs, smart cards, or other devices, including smartphones and other mobile devices, that use radio-frequency identification (RFID) or near-field communication (NFC, e.g. Samsu ...

method where payment is performed by scanning a

QR code A QR code (an initialism for quick response code) is a type of matrix barcode (or two-dimensional barcode) invented in 1994 by the Japanese company Denso Wave. A barcode is a machine-readable optical label that can contain information about th ...

from a

mobile app A mobile application or app is a computer program or software application designed to run on a mobile device such as a phone, tablet, or watch. Mobile applications often stand in contrast to desktop applications which are designed to run on de ...

. This is an alternative to doing

electronic funds transfer at point of sale Electronic funds transfer at point of sale (EFTPOS; ) is an electronic payment system involving electronic funds transfers based on the use of payment cards, such as debit or credit cards, at payment terminals located at points of sale. EFTPOS ...

using a

payment terminal A payment terminal, also known as a point of sale (POS) terminal, credit card terminal, EFTPOS terminal (or by the older term as PDQ terminal which stands for "Process Data Quickly"), is a device which interfaces with payment cards to make electr ...

. This avoids a lot of the infrastructure traditionally associated with electronic payments such as payment cards, payment networks, payment terminal and

merchant account A merchant account is a type of bank account that allows businesses to accept payments in multiple ways, typically debit or credit cards. A merchant account is established under an agreement between an acceptor and a merchant acquiring bank for t ...

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

History

The QR code system was invented in 1994 by

Masahiro Hara Masahiro Hara (born 1957) is a Japanese engineer and Hosei University graduate who is best known for inventing the QR code in 1994. Early life and education Hara was born in Tokyo in 1957. He studied in the department of electric and electroni ...

from the Japanese company Denso Wave. The first mobile wallet app for

cryptocurrency A cryptocurrency, crypto-currency, or crypto is a digital currency designed to work as a medium of exchange through a computer network that is not reliant on any central authority, such as a government or bank, to uphold or maintain it. It i ...

Bitcoin featured the ability to send and receive payments with QR codes in March 2011. 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. In 2014, Chinese technology company

Tencent Tencent Holdings Ltd. () is a Chinese multinational technology and entertainment conglomerate and holding company headquartered in Shenzhen. It is one of the highest grossing multimedia companies in the world based on revenue. It is also the w ...

introduced a similar feature on its messaging app

WeChat WeChat () is a Chinese instant messaging, social media, and mobile payment app developed by Tencent. First released in 2011, it became the world's largest standalone mobile app in 2018, with over 1 billion monthly active users. WeChat has been ...

to allow its users to make QR code payments. QR code payment has helped

mobile payment A mobile payment, also referred to as mobile money, mobile money transfer and mobile wallet, is any of various payment processing services operated under financial regulations and performed from or via a mobile device, as the cardinal class of d ...

become the most popular method of payments in China, accounting for 83% of all payments as of 2018. Nearly all shops, street vendors, most metro systems,

buses A bus (contracted from omnibus, with variants multibus, motorbus, autobus, etc.) is a road vehicle that carries significantly more passengers than an average car or van. It is most commonly used in public transport, but is also in use for ...

, and

taxis A taxis (; ) is the movement of an organism in response to a stimulus such as light or the presence of food. Taxes are innate behavioural responses. A taxis differs from a tropism (turning response, often growth towards or away from a stim ...

Mainland China "Mainland China" is a geopolitical term defined as the territory governed by the People's Republic of China (including islands like Hainan or Chongming), excluding dependent territories of the PRC, and other territories within Greater Chin ...

accept either

WeChat Pay WeChat Pay () is a mobile payment and digital wallet service by WeChat based in China that allows users to make mobile payments and online transactions. As of March 2016, WeChat Pay had over 300 million users. WeChat Pay's main competitor in Chi ...

, Alipay, or

Cloud QuickPass The app of UnionPay ( zh, s=云闪付, p=Yúnshǎnfù, literally “Cloud QuickPass”) is a mobile and online payment service, developed and operated by UnionPay, the national Chinese bank card clearing service. Launched in 2017, it was desi ...

for payment. In 2017, the National Payments Corporation of India (NPCI) launched BharatQR as a single, interoperable QR code that could be used for making payments to and from bank accounts using

UPI United Press International (UPI) is an American international news agency whose newswires, photo, news film, and audio services provided news material to thousands of newspapers, magazines, radio and television stations for most of the 20th c ...

and wallets. It works alongside QR codes from wallet providers as well as card providers such as Visa's mVisa and Mastercard's Masterpass. In 2020,

PayPal PayPal Holdings, Inc. is an American multinational financial technology company operating an online payments system in the majority of countries that support online money transfers, and serves as an electronic alternative to traditional paper ...

announced the ability to pay with QR codes in its mobile app.

Usage by industry

Transportation

China

Passengers exit or enter Wuhan Metro system by QR code (1)

Most metro systems,

, and

accept either

or Alipay for payment. The national railway operator,

China Railway China State Railway Group Company, Ltd., doing business as China Railway (CR), is the national passenger and freight railroad corporation of the People's Republic of China. China Railway operates passenger and freight transport throughout Ch ...

, also accepts the two major apps for payment.

India

Line 1 of the

Mumbai Metro The Mumbai Metro is a rapid transit (MRT) system serving the city of Mumbai and the wider Mumbai Metropolitan Region in Maharashtra, India. Mumbai Metropolitan Region Development Authority is responsible authority for maintaining the metro syst ...

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 Paytm (acronym for "pay through mobile") is an Indian digital payments and financial services company, based in Noida. It was founded in 2010 by Vijay Shekhar Sharma under One97 Communications. The company offers mobile payment services to ...

app which is then read by a scanner mounted on the turnstile.

Integrated QR code payment systems

ASEAN Integrated QR Code Payment System

This integrated QR code payment system allows people to make transactions with banks or e-money that supports their local integrated QR code payment system in any of the participating countries. Local currencies are used in these transactions, meaning that transactions in Thailand using an Indonesian payment app will directly exchange

rupiah The rupiah (symbol: Rp; currency code: IDR) is the official currency of Indonesia. It is issued and controlled by Bank Indonesia. The name " rupiah" is derived from the Sanskrit word for silver, (). Sometimes, Indonesians also informally use t ...

with

baht The baht (; th, บาท, ; currency sign, sign: ฿; ISO 4217, code: THB) is the official currency of Thailand. It is divided into 100 ''satang'' (, ). The issuance of currency is the responsibility of the Bank of Thailand. Society for Worldw ...

. Currently, three of the QR code payment systems in

ASEAN ASEAN ( , ), officially the Association of Southeast Asian Nations, is a political and economic union of 10 member states in Southeast Asia, which promotes intergovernmental cooperation and facilitates economic, political, security, military ...

are connected (

Indonesia Indonesia, officially the Republic of Indonesia, is a country in Southeast Asia and Oceania between the Indian and Pacific oceans. It consists of over 17,000 islands, including Sumatra, Java, Sulawesi, and parts of Borneo and New Guine ...

Malaysia Malaysia ( ; ) is a country in Southeast Asia. The federal constitutional monarchy consists of thirteen states and three federal territories, separated by the South China Sea into two regions: Peninsular Malaysia and Borneo's East Malay ...

and

Thailand Thailand ( ), historically known as Siam () and officially the Kingdom of Thailand, is a country in Southeast Asia, located at the centre of the Indochinese Peninsula, spanning , with a population of almost 70 million. The country is b ...

). Singapore and the Philippines are also planning to integrate their QR payment systems. The following are QR Payment systems that are in or soon will be in the integrated pament system.

QRIS (Quick Response Code Indonesian Standard)

QRIS is a standardized national QR payment system for Indonesia launched by

Bank Indonesia Bank Indonesia (BI) is the central bank of the Republic of Indonesia. It replaced in 1953 the Bank of Java ( nl, De Javasche Bank, DJB), which had been created in 1828 to serve the financial needs of the Dutch East Indies. History Bank of Jav ...

on August 17, 2019. Almost all payment services in Indonesia support this system, including

GoPay PT Gojek Indonesia (stylized in all lower case and stylized ''j'' as goȷek, formerly styled as GO-JEK) is an Indonesian on-demand multi-service platform and digital payment technology group based in Jakarta. Gojek was first established in Ind ...

, OVO, ShopeePay, BCA, and BRI. It combines all the separate QR codes from different payment services into one QR code which can be used by merchants to receive payments from any e-wallets or banks that supports QRIS.

DuitNow

DuitNow allows all participating banks and e-wallets in Malaysia to use the same QR Code for transactions. It is launched by Paynet under the Bank Negara Malaysia's Interoperable Credit Transfer Framework (ICTF). Some of the banks and e-wallets that support this payment system are CIMB,

HSBC HSBC Holdings plc is a British multinational universal bank and financial services holding company. It is the largest bank in Europe by total assets ahead of BNP Paribas, with US$2.953 trillion as of December 2021. In 2021, HSBC had $10.8 tri ...

, GrabPay, ShopeePay, OCBC, UOB,

ICBC Industrial and Commercial Bank of China Limited (ICBC; ) is a Chinese multinational bank. Founded as a limited company on 1 January 1984, ICBC is a state-owned commercial bank. With capital provided by the Ministry of Finance of China, the ...

, and more.

Thai QR Payment

Thai QR Payment (Promptpay) integrates QR payment systems in Thailand. It was launched by the

Bank of Thailand The Bank of Thailand (BOT) ( Abrv: ธปท.; th, ธนาคารแห่งประเทศไทย, ) is the central bank of Thailand. History The Bank of Thailand (BOT) was first set up as the Thai National Banking Bureau. The Bank ...

SGQR (Singapore Quick Response Code)

SGQR is a unified QR code payment system launched on September 17, 2018. SGQR combines multiple QR codes used by multiple payment services in Singapore, including PayNow, into one QR code. This scheme is co-owned by MAS and

IMDA The Infocomm Media Development Authority (IMDA) is a statutory board under the Singapore Ministry of Communications and Information (MCI). History Following the passing of the Info-communications Media Development Authority Bill in Parliame ...

QR Ph

QR Ph is the QR code standard in the Philippines, approved by the Philippines Payment Management, inc. (PPMI) in accordance with circular 1055 of the

Bangko Sentral ng Pilipinas The Bangko Sentral ng Pilipinas (; commonly abbreviated as BSP in both Filipino and English) is the central bank of the Philippines. It was established on July 3, 1993, pursuant to the provision of Republic Act 7653 or the New Central Bank Act ...

. The system is based on the Europay-Mastercard-VISA (EMV) standard, allowing one QR Code to serve transactions from different banks and e-wallets.

References

Payment systems Mobile payments Japanese inventions 1994 introductions 2011 introductions {{Finance-stub