The QR Story

DATA — The abstract hero of the current era. Data is a term that everybody right from a fruit vendor to a CEO of a conglomerate would have heard and used in various connotations in various situations. It is something that is being ingested and utilized by the world at an unimaginable rate.

In Today’s article, we would be seeing one such element that has risen to very high prominence that has aided in the process of data handling at all levels — The QR Code.

The QR Code stands for Quick Response Code which is currently used very widely in contactless payments at stores. In the context of India, QR Codes were adopted very quickly and deployed after 2 major incidents :

1. Demonetization (2016)
2. COVID-19

India saw a surge of over 130% in Digital Transactions post Demonetization. Below is a comprehensive display of the same.

Adoption of Digital Payments in India from 2016

Needless to say, Paytm was the first to prepare and deploy an army of resources to enable adoption of Cashless transaction in the post demonetization era in India . Although the QR Code was invented way back in 1994, It saw immense utility in day-to-day transactions in terms of digital payments post 2016.

QR Codes were invented by Masahiro Hara in 1994 from the Japanese firm Denso Wave. It was invented to track vehicles during manufacturing with a high speed component Scanning.

So what is this QR Code? Why is it used at almost all data ingestion crevices?

QR Code is a unique 2D Matrix type of barcode that can store anywhere between 1167 Characters (Version 1 — Numeric ) to 7089 Characters (Version 40 — Numeric ). The fact that it is structured in 2D enables higher storage of data in the QR Code as opposed to a barcode. Also data in a QR Code easily encrypted which allows less room for error. Modern day smartphones do not even require a specialized application for QR Code scanning as the smartphone camera is itself equipped with doing it. The square shape of a QR Code is highly compatible with the smartphone camera’s focus region. Hence QR’s are innately cross-functional for Smartphone Users. Although this post is not focused on de-constructing the structure of the QR completely, attached below is an image indicating the various parts in a QR Code for audience interested in it.

Image Courtesy: Google

QR Codes come in 2 variants:

1. Static QR Code: These QR Codes are used for knowing information that would not change or change very less frequently. Data Encoded in this cannot be changed. It can store considerable higher amount of data. Ex: Displaying Phone Numbers, Address , Personal Details of Individuals.
2. Dynamic QR code: These QR Codes are used to store information that would need frequent updates or changes. Consequently the amount of data that it can hold is considerably less. Ex: Social Media QR Codes, Website URL QR Codes, WiFi-Connect enabling QR Codes, Metric tracking QR Codes.

As QR Codes by default encrypt the information stored , It is only natural that they are a famous choice for enabling payment services in a secure manner. QR Codes render themselves cost-effective as opposed to a POS machine which would cost anywhere between Rs 5000/- to Rs 12,000/-. Also the QR Codes only assist in easy, secure and quick transfer of merchant information to the customer. The process of payment is taken care by the Banks / Wallets / Third Party payment applications.

During the Initial Stages of increased penetration into the Cashless space in India post 2016 , Closed Loop QR Codes were in use for payment i.e. 1 particular QR Code could be scanned only by 1 specific payment client. However in early 2019, RBI recommended adoption of Interoperable QR Codes which would be easier and faster to use. This led to the development of the Bharat QR and UPI. These are the QR codes that are now present at most outlets which are usable by any of the payment applications such as Paytm, Google Pay, Phone Pe, MobiKwik etc.

Some of the other utilities of QR Codes outside of payments include:

1. Ordering from Restaurants
2. Website Login
3. App Downloads
4. Wifi-Connect enabling
5. Generation of TOTP
6. Product Tracing

and many more.

Few of the disadvantages of QR Codes are:

1. Ghost Codes: As QR Codes are easy to generate, that would mean that even a lay person could land his hands on it. When used as a payment enabler, Shops and outlets have to be aware of random third party QR codes that anybody can place and walk away that would link to their bank account thereby redirecting payments to the intruder. To circumvent this issue, Bharat-Pe enabled voice confirmation upon payment done by the customer under the Paisa Bolega Initiative.
2. Usage of a QR Code would mean that a smartphone is mandatory. Although this could be seen as a disadvantage, India has seen enormous smartphone penetration in the last decade. With increasing usage of smartphones, It is only sane that QR codes will be more adaptable

QR Codes and Contact less payments have made life easier for a lot of people. Product Owners and Customers prefer a QR code as a part of their transaction. The Ease and simplicity in design along with effective implementation and security indicates that the QR Code is an innovative invention that is here to stay for a long while.