Contact less Payments — QR Code

Background

QR (Quick Response) found its origin in Japan to overcome the limitation of Barcodes. Barcodes solved a significant problem in retail cash registers wherein the cashier could scan the barcode on an item at checkout. The price associated with that item would get displayed, tremendously decreasing the checkout times. Barcodes could store only limited information (20 or so alphanumeric characters), and users went to DENSO CORPORATION, barcode developers at that time, requesting enhancements in barcodes that could store more information.

We’d like the capability to code Kanji and Kana characters as well as alphanumeric ones.

Thus began the QR code works,a classic example of how solving real customer problems resulted in a “product-market” fit for years to come..

Whats Inside QR code image?

Lets analyze a very simple QR code below

Pull your smartphone. Let us say you are using an iPhone, open your camera to view the above image. Your camera must show the alphabet “A” on the top.
So what just happened? I created a QR code and embedded the information (i.e., alphabet ‘A’). ‘A’ is Alphanumeric encoding in QR code, and ‘A’ has a decimal value “10,” which is binary “001010” shown under ‘segment 0 data’ in the below table.

Hexadecimal value of above bytes(grouping of 8 bits are as follows: 20 09 40 EC 11 EC 11 EC 11 EC 11 EC 11 EC 11 EC 11 EC 11

The above data results in short on long block formation; there will be only one block in the above case. ECC code (highlighted in the bold letter in the below code ) gets appended for error correction. The final code words with ECC will be : “20 09 40 EC 11 EC 11 EC 11 EC 11 EC 11 EC 11 EC 11 EC 11CB 0A 1D 28 A2 2D 12”

The information from the final code gets converted into a QR code image with “finder patterns” (three boxes on three corners of the QR code above),” timing patterns,” “ format bits,” and a “mask” pattern.

QR code decoders will be able to navigate the image patterns (In the image, black color blocks are “1” and white blocks are “0”) and get the “raw byte” data of hexadecimal and provide the embedded information our capital “A”.

All this is great ,but what does QR code have to do with payments?

With smartphones getting cheaper and the internet becoming more pervasive.QR code is replacing or, in many cases facilitating new ways for merchants to procure their payments and not having to invest in any card readers. Let us walk through some QR case use cases for digital payments.
Asian countries are leading the digital payment revolution using QR code for contact less payments. As of this writing, most Western countries are using NFC(near field communication) for contact less payments. However, the 2020 corona-virus pandemic changes this pattern, with more merchants opting for QR code for contact less payments.
For all the user cases outlined below, the merchant needs to register with his/her digital gateway payment processor and obtain a QR code..

Static QR code at merchant — One time QR code Printout at checkout!

Simplest of all cases and most popular in developing countries or small merchants. A static QR is obtained by merchant and can be displayed at the checkout counter as simple printout,image stuck on a wall etc. The shopper will pull out their smartphone and scan the QR code the shopper will then punch in the purchase amount and finish the transaction.

Dynamic QR code at merchant-transaction specific QR Code

This use case is slight variation to above use case,here the merchants QR code must be dynamic,i.e must have the amount that the shopper purchased. Merchant can use their phone to generate a dynamic QR code with transaction amount.The shopper will then scan the dynamic QR code from their phone and finish the transaction.

Peer-Peer Money Transfer

This use case is similar to a dynamic merchant use case .However the two parties involved here can be friends and need not be a merchant and a shopper.

Public Transit Payment Collection

In this use case the merchant can have a preset amount for a sale . The passenger will enter the amount generate a QR code and display it at the gate to finish the transaction.