QR Code Payment Methods: How Businesses Can Simplify Transactions and Cut Costs with Open Banking

In an increasingly cashless world, QR code payments have emerged as one of the most versatile and accessible methods for both businesses and consumers. With 94% of UK residents aged 16+ now owning a smartphone, QR payments are fast becoming a mainstream way to pay — whether you’re at a pop-up market, settling a restaurant bill, or checking out online.

But not all QR code payment methods are created equal. While options like digital wallets and card payments remain popular, open banking-powered QR codes are redefining what seamless, secure, and cost-efficient payments look like.

How Do QR Code Payments Work?

QR codes — those familiar square-shaped patterns — contain encrypted data that redirects users to a specific destination when scanned. In payments, this destination is typically a secure checkout page.

The data encoded in the QR code can include transaction amounts, merchant details, and payment instructions. Once scanned, users are prompted to select their preferred payment method, authenticate the transaction, and authorise the transfer.

There are two main types of QR codes in payments:

• Static QR codes: Fixed data that doesn’t change. Ideal for situations where transaction amounts remain constant.
• Dynamic QR codes: Flexible data that updates in real-time, allowing variables like transaction amounts or merchant details to be adjusted. Requires an active internet connection.

Regardless of the type, businesses need a Payment Service Provider (PSP) that supports QR code payments. PSPs can range from traditional banks to digital wallets and open banking platforms like Noda.

QR Code Payment Methods Compared

Let’s break down the most common QR payment methods and see how they stack up.

1. Digital Wallets

Digital wallets like Apple Pay, Google Pay, and PayPal store card information securely for convenient payments. While widely used, they come with certain limitations:

• Compatibility issues with older devices and operating systems.
• Geographical constraints, as not all wallets operate globally.
• Slower settlement times typical of card payments.

2. Debit and Credit Cards

QR codes can also direct users to enter their card details manually. Some networks, like Visa, are working to streamline this process, but for now, it remains less efficient than alternatives.

• Manual entry adds friction to the payment process.
• Settlement delays of three or more days are common.

3. Open Banking

Open banking allows payments to move directly between bank accounts, skipping card networks altogether. After scanning the QR code, customers authenticate the payment directly through their bank app.

This offers a range of advantages:

• Speed: Instant bank transfers, especially when both parties use Faster Payments in the UK.
• Cost-efficiency: No card network fees, significantly reducing transaction costs.
• Security: Bank-level encryption and multi-factor authentication, such as biometrics.

"Helping businesses reduce operational complexity while giving consumers a truly frictionless payment experience is exactly what we focus on," explains Valerijs Sicovs, Chief Business Development Officer at Noda. "With open banking-powered QR codes, we enable real-time payments at a fraction of the cost of traditional methods."

Why Open Banking is the Superior QR Payment Method

Beyond convenience, open banking delivers serious benefits for businesses and consumers alike:

Benefits for Consumers

• Advanced security: Encryption, biometric authentication, and strong customer verification reduce fraud risk.
• No more card skimming: Sensitive data is never shared, and accounts are directly protected by the user's bank.

Benefits for Businesses

• Low operational costs: No expensive hardware or card terminals.
• Instant settlements: Faster cash flow management.
• Fewer chargebacks: Direct bank transfers reduce the risk of disputed transactions.
• Global reach: Seamless cross-border payments with fewer barriers.

General Benefits

• Versatility: QR codes work across physical locations, printed materials, online channels, and messaging apps.
• Scalability: Dynamic QR codes make it easy to adjust payment amounts and scale operations effortlessly.

The Future of QR Payments Is Bank-Powered

While traditional QR payment methods have paved the way, open banking takes QR code transactions to the next level. For businesses looking to reduce costs, improve cash flow, and provide a modern customer experience, it’s an obvious choice.

As QR code adoption grows globally, pairing it with open banking will help future-proof payment strategies and keep businesses agile in an evolving financial landscape.

For businesses ready to move beyond outdated card networks and embrace instant, secure payments, the next step is clear: scan, pay, and grow.