The value of digital payments in India will reach $10 trillion by 2026, up from $3 trillion now, according to India Business Standard. 2 out of 3 payments will be digital (not cash) by 2026.

The development of a QR-code-based merchant acceptance network has aided in the rapid adoption of UPI among Indian end-users. Moreover, user-friendly interfaces, innovative offerings, and an open API ecosystem have contributed to the success of the UPI (Unified Payments Interface) in India.

What is QR Code Payment?

A QR code payment is an alternative to a contactless payment at the point of sale, where an electronic funds transfer is performed through a mobile app by scanning a QR code.

What’s UPI QR code payments

The UPI QR code is a digital payment acceptance channel accessible at the establishment of business to facilitate customers paying with their UPI-connected mobile app by scanning a QR code.

UPI (Unified Payments Interface) is a digital payment gateway that integrates several banking features. Seamless fund routing, and merchant payments into a single mobile application (of any participating bank).

How does QR Code Payment look?

How does QR Code Payment look

How does a QR code payment work?

  • A QR code creates a pixel pattern, which contains information about the merchant, transactional details, and so on.
  • As a QR code pattern scans, the software decodes the pattern into the character string and then displays it to the user. Now QR code (payment acceptance) carries a set of commands related to the transaction.
  • Now merchants can generate QR codes for their shops or for fixed or variable amounts. After this command is issued, a QR code is generated, which, depending on what the merchant specifies, will either generate a payment link, confirm payment, or do any other function they specify.
  • Payment is transferred once it is scanned by the customer.

You will need the following tools to scan QR codes:

QR Scanner / barcode readers

Camera-equipped smartphones – today, QR codes are easily scanned by many free apps.

Types of QR Code Payments

QR can be divided into two types. Let’s examine each one.

Static Style QR code

These QR codes cannot be tracked; however, by adding the URL to the QR code, the QR code can be corrected. The URL of the destination website is located directly inside the QR code.

In numerous industries, such as delivery services, in-home services, retail, taxi-drivers, street vendors, and in-store retail stores, QR codes are used to facilitate quick and easy payments. It takes only a few seconds for a user to scan the QR code to make the payment.

Dynamic Style QR code

Dynamic QR codes offer editing capabilities, password protection, scan analysis, and device-based redirection. Additionally, dynamic QR codes can provide various information about scanned codes, such as how many people scanned them, the type of device being used, and the location of the scanner.

The QR code now contains both the purchase amount and merchant information, allowing merchants to convey information to users in an easier manner. Furthermore, when a QR code is sent, the payer has greater control over the amount due.

Dynamic QR codes eliminate all the factors that affect the payment process compared to static QR codes, which require users to input the purchase amount and then carefully verify it.

Benefits of QR code Payments

You can connect with your potential customers in several different ways with QR codes. Here are some of the benefits.

Payments made instantly

Paying instantly is one of the biggest benefits of QR codes. QR codes are extremely fast because it takes only a matter of seconds to make payments using them. To make payments using QR codes, a user simply has to open an app, scan the QR code, and confirm to make the payment.

Touch Free Payment Solutions

To accept a few touch-free payments, you may not be able to justify investing in equipment or redesigning your entire payment process. In contrast, QR codes can be used without a touchpad by just printing them on a standard printer.

Chargeback Reduction

The purpose of a chargeback dispute is to resolve a dispute regarding the use of a credit or debit card. As a result of scan-to-play, chargeback liability is reduced because the customer is inputting all the payment information, which eliminates the possibility of chargebacks.

QR code payment systems may help you reduce your liability for those rupees 1,200.00 in chargebacks. You can save rupee 600.00 per year if you reduce the chargebacks in half. Scanning and paying reduce your business’ overall risk.

Paying with QR codes is Secure

QR codes generate a unique pattern that is unable to be hacked. The data transferred via QR codes is encrypted, so payments are fool-proof and safe. Check that the name and details of the merchant match up before the transaction is processed so that the customer can verify the authenticity of the transactions.

Providing affordable and reliable solutions

A QR code allows merchants to accept payments without having to set up a card machine, and customers don’t even need debit or credit cards to make payments. QR codes are easy to create through QR code generators and can save merchants money.

By using QR code payments, the probability of errors is also reduced. The black box pattern contains unique data which increases the probability of QR code payments being reliable.

It might just be time for you to try QR payments if you’re looking for a new way to pay. This technology is quickly becoming a top priority within sectors affecting payments, including financial institutions, smartphone manufacturers, mobile app developers, and major retailers.

Trends in QR Code Payment

Leaders in Digital Payment Economy

With 65 percent of all transactions in India to be made digitally by 2026, as opposed to 40 percent today, India is on track to become a digital payment economy by 2026.

Secure online transactions under RBI norms

To increase online transaction security in India, the Reserve Bank of India implemented several rules requiring that all recurring debit or credit card payments be authenticated by another factor. These rules are being enforced as a part of the RBI’s initiative to strengthen security for online transactions.

As a result, all payment companies were required to replace card details with an alternative code known as a token in response to the mandate on card-on-file tokenization.

Changes into consumer payment behaviour

There has been an increase in cardless-EMI, Pay-later, and EMI as preferred payment modes as incomes have decreased. They grew by 290 percent, 178 percent, and 125 percent, respectively, in the last year. The use of UPI continued to grow 43 percent, while use of cards was up 40 percent, and use of Net-banking was up 10 percent.

Startups becoming unicorn companies in fintech

Indian unicorn startups have become a growing trend in recent years. These Startups are developing outside conventional innovation corridors, fostering a growing trend of fintech technologies.

Incentive/cashback schemes

MEITY launched incentive/cashback schemes to change the customer/merchant behavior to facilitate digital payments adoption in India. Individuals and merchants received BHIM Cashback schemes, BHIM Aadhaar Merchant Incentives Schemes, and BHIM-UPI Merchant Onboarding Schemes that reimbursed Merchant Discount Rates (MDRs).

Enhanced Customer payment experience

QR code payments are expected to improve customer experience and enhance payment options; ensure cybersecurity, and introduce new technologies to improve the digital payment process.

Digital payments are undergoing a transformation which will lead to social media-initiated payments, voice-activated payments, and biometric payments including facial recognition becoming dominant.

Increased downloads of payment applications

Many online stores and aggregator platforms have blocked cash payments to avoid contact with delivery agents because of the pandemic, leading to notable growth in digital payment apps.


In the last few years, UPI has grown to become India’s largest fintech platform in terms of both person-to-person and merchant-to-merchant transactions. Due to the growing popularity of QR codes, merchant payments will be the most powerful driver of this growth. We can expect merchant payments to soon outpace payments between people.

The integration of digital payments into all forms of commerce will continue to grow, and embedded payments will increasingly be accompanied by embedded finance. Through the acceptance of digital payments, small merchants will be able to access credit in a significantly different way since a digital track is created for their transactions.


The author writes about fintech, banking, and future of SAAS services. He works as an SEO analyst at Easebuzz, so if you're looking for an account that tracks India's fintech scene, you should check out his Easebuzz blog.