What Are the Pros and Cons of QR Code Payments?


Pebl Team
May 6, 2024

As emerging technologies continue to revolutionise payment transactions...

...one innovative trend that stands out is QR code payment.

QR code, short for Quick Response code, is a type of barcode that encodes information and can be scanned using smartphones. This technology offers a highly streamlined payment experience, sparking a significant shift in the consumer payment landscape.

Researchers expect that by 2025 up to 30% of smartphone users will utilize QR codes for processing transactions.

But as with any new technology, QR code payments come with both advantages and disadvantages.

This article will cover both the pros and cons of QR code payments, to help business owners make an informed decision on whether or not to incorporate this payment method into their transaction processes.

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Pros of QR code payments

Let's take a closer look at the most important pros of QR code payments:

Ease of setup and cost-efficiency

Unlike traditional card terminals that involve complex installations and high setup costs, QR codes can be generated, distributed, and scanned with minimal effort and cost. Businesses simply have to select a QR code payment provider, create an account, and generate their unique QR codes. No additional hardware or sophisticated technology is necessary, making it a simple and affordable option for businesses of all sizes.

Speed and convenience

QR code payments undoubtedly enhance customer service by offering a smooth and efficient checkout process. Customers often have to simply point their smartphone camera at a QR code, get redirected to the payment page, and confirm their payment. This no-touch, fast transaction method significantly reduces the wait time, providing a convenient customer experience.

Contactless payments

In the wake of the pandemic, contactless payments have become more important than ever. QR codes require no physical contact, thus providing a safer mode of transaction. Customers won't have to handle cash or use shared payment terminals, thereby reducing the risk of germ transmission.

Integration with loyalty programs

QR codes can be leveraged for something more than just payments, such as integrating with loyalty programs. As a tool that can house large amounts of data, they can be used to track transactions, accumulate reward points, offer discounts, and more. And since everything is done digitally, it eliminates the need for physical loyalty cards, making it an eco-friendlier option.

Increased security

QR code payments have a higher level of security compared to traditional transactions. They are encrypted and tokenized, ensuring that no consumer data needs to be shared or stored to process the payment. This safeguard against potential data theft makes them a secure payment option, creating more trust in consumers.

Global adoption

With heavyweight platforms such as WeChat Pay and Alipay backing QR code payments, this technology is enjoying wide acceptance, particularly in Asia. Its growing global adoption means customers familiar with this technology can use it anywhere it's accepted, making transactions easier for tourists and international customers.

In conclusion, QR codes offer a simple, swift, contactless, secure, and global payment option that can even be integrated with loyalty programs. This is why an increasing number of businesses are harnessing QR codes to improve their payment processes.

Cons of QR code payments

While QR code payments present significant advantages, like any form of technology, they also carry some drawbacks. Here are some potential cons to keep in mind:

Dependence on smartphones

One key limitation of QR codes is their reliance on smartphones. To scan a QR code, customers must own a smartphone and have it in their possession at the time of payment. This dependency can exclude individuals who don't have one, such as certain demographics or individuals living in areas with limited technological advancement.

Requirement for internet access

While QR code creation doesn't need internet access, the transaction process necessitates a stable internet connection. The scanning of the code redirects users to an online payment platform, and if the internet connection is poor or non-existent, this process can't be completed, affecting customers and businesses in locations with limited connectivity.

Potential vulnerabilities

While QR code payments are generally secure, potential vulnerabilities exist. Cybercriminals can replace a legitimate business’s QR code with a fraudulent one. When scanned, this could lead the user to a sham website designed to gather their personal and banking information, exposing them to potential fraud. Thus, users and businesses must exercise caution to ensure the QR codes scanned are not tampered with or replaced.

Compatibility issues

In some cases a specific app is required to read certain QR codes, or the scanning capability might be only available on newer smartphone models. Also, some payment platforms only allow QR code payments through their proprietary app. These compatibility requirements might deter customers from using QR codes.

In general, it's important for businesses to consider their unique customer base and the context in which they operate before deciding which payment option is right for them.

Other contactless payment options

While QR codes offer contactless payments, other payment technologies such as near-field communication (NFC), employed by Apple Pay or Google Pay, are also growing in adoption. 

These methods allow customers to pay by simply hovering their phone over a device such as a terminal or mobile, and in some cases they can be even quicker and easier to use compared to processing a QR code payment.

Final remarks

QR code payments are increasingly becoming an integral part of the current transaction landscape, offering a unique blend of convenience, flexibility, speed, and security.

As more customers opt for digitally driven shopping experiences, it's vital for businesses to adapt and incorporate technologies such as QR codes into their payment methods.

However, while the pros of QR code payments - cost-effective setup, seamless transactions, contactless functionality, loyalty program integration, and strong security - are compelling, it's also important to note the potential cons such as dependency on smartphones and internet, security vulnerabilities, and complexity for some users.

As businesses plan to adopt QR code payments, understanding these dynamics can ensure effective implementation that suits their unique requirements and customer profiles.

Ultimately, it is about maximizing customer convenience while maintaining security in an increasingly digital and connected world. Acknowledging and addressing these factors can enable businesses to realize the true potential of QR code payments.