Understanding Dynamic vs. Static QR Codes: How They Differ and What They Offer
-By Priyasy Bokadia June 5, 2023 5 min read
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How QR Codes are Transforming Local Business Payments?

What is a QR Code?

A QR (Quick Response) code is a black-and-white pattern that cell phones can read to decode into text. The operation is executed in accordance with the instructions specified in that pattern. And, there are so many tasks that can be performed through QR codes - for instance; it can take you to a cafe food menu, enable Wi-Fi access, open a PDF or an image, and for merchants - carry out a payment transaction with the merchant’s bank account details fed into the QR code. These QR codes are two-dimensional barcodes that are classified into two types: static and dynamic, depending on how the code is generated and the type of information it contains.

**What are Static QR codes?**

Static QR codes are like a tattoo, once you get them, they're permanent. On the other hand, dynamic QR codes are like chameleons; they can adapt to any situation, they can be edited, and they can be tracked. Static QR codes contain fixed information that cannot be changed after the code is generated. This means that once the code is printed or displayed, it will always hold the same information. Static QR codes are typically used for simple tasks, such as directing users to a website, displaying contact information, or holding a merchant’s bank account details.

How do Dynamic QR codes differ from Static QR codes?

Dynamic QR codes, on the other hand, contain information that can be changed after the code is generated. This means that the content of the code can be updated or modified without having to generate new code. Dynamic QR codes are typically used for more ever-changing data tasks, such as tracking inventory, generating tickets or coupons, conducting surveys, and restaurant menus.

**Features of Static and Dynamic QR Codes**

In this section, we will look at the features of each of the QR codes. Dynamic QR codes can be customised, tracked, and include additional capabilities like white labelling, generating leads, customised landing pages, and password security. They are more adaptable and helpful for marketing efforts than static QR codes. Static QR codes are ideal for cases where the encoded information remains fixed and does not require any changes, like the ones used for UPI payments. Static QR codes are a)Non-trackable. Businesses cannot measure customer interactions or transaction status. b) Permanent cannot be edited or updated once created. c) Ideal for merchants, as a strong internet connection is not necessary. d) Direct to destination URL whereas dynamic QR codes are: a) Trackable. Provides business metrics. b) Editable after creation, without re-generating a new code. c) Not ideal for merchants as purchase value needs to be entered for every purchase. d) Destination via dynamic link.

Hence, the QR codes you can find printed and pasted outside every store, outlet, or stall are Static QR codes. Merchants can enter his/her account details in the Static QR code and start accepting payment via multiple channels, unlike a dynamic QR code where the merchant is expected to create a unique QR code for every payment and send it to the customer which is tedious and time-consuming.

Why are Static QR codes obsolete but largely used by merchants and local stores?

Surge in UPI Payments accepted by merchants in India via QR codes

The Unified Payments Interface (UPI) has become the flag-bearer of Indian digital payments, with a surge in UPI payments by merchants in India. UPI is an instant real-time payment system developed by the National Payments Corporation of India (NPCI) that facilitates inter-bank peer-to-peer (P2P) and person-to-merchant (P2M) transactions. In October 2022, UPI recorded an all-time high transactional volume and value, with over 7 trillion transactions worth over Rs 12 trillion. This surge in UPI payments by merchants in India can be attributed to the ease of use, convenience, and security offered by UPI. With UPI, merchants can accept payments from customers instantly, without the need for cash or cards. UPI has revolutionised the way merchants in India accept payments, and its popularity is only expected to grow in the coming years.

What do the numbers say?

Static QR codes are simple to create and don’t require any technical knowledge. One of the reasons why UPI payments have seen a significant surge in India. According to data sourced from the National Payments Corporation of India (NPCI), the total number of UPI transactions last year jumped 91.11% YoY, and the value of UPI transactions saw a 74.83% YoY increase in 2022. UPI transactions registered in FY 21-22 were 45 billion, showing 8 times growth in the last 3 years and 50 times growth in the last 4 years.

At the end of the calendar year 2022, UPI’s total transaction value increased by 1.75X year-on-year (YoY), as per the NCPI. Interestingly, the total UPI transaction value accounted for nearly 86% of India’s GDP in FY22. Further, India saw a total UPI transaction count increase by 1.91X YoY. The number translates to nearly 2,348 UPI transactions per second.

**Different merchants, different QR codes**

All the UPI QR codes you see printed at your local stores and outlets, temples, or anywhere else are static QR codes. In the payment space, a static QR code puts control in the hands of the customer. How? Let me walk you through it. When you order a sandwich or buy any items from an electronics or hardware store, you scan the QR code through a UPI bank app on your phone, enter the amount that needs to be paid, enter your UPI pin, and complete the transaction. However, when you go to, let’s say, a Big Bazar and head on to the cash counter to pay, the cashier generates a unique QR code that, when scanned, has the bill amount pre-entered and all you need to do is enter your PIN to complete the transaction, putting the power in the hands of the merchant. While dynamic QR codes put the power in the hands of the merchants, it is the least preferred and most cumbersome process, which requires an additional investment of company resources and staff training.

Use Case: Using a Static QR Code for Safe and Instant Payment Acceptance at a Crowded Flea Market

So you're a co-owner of a handmade soap business with 10 different varieties, and you have set up a stall at a crowded flea market on a weekend. With a long line of customers waiting and only one or two people to manage the stall. It's like a game of Monopoly - time is of the essence. Also, you need to ensure that payment acceptance is fast and frictionless to keep the line moving.

In this scenario, a static QR code for accepting payments becomes the superhero that saves the day. Your customers don’t need to fumble with cash or cards; just a simple scan, and they're good to go! You can display a static QR code at the counter, which customers can scan to make payments using their mobile devices, making the payment process quick and efficient.

Since the QR code is static, you don't need to create a unique one for every sale. Instead, you can display the same QR code throughout the day, making it easy for customers to scan and pay without any delay. And the best part? Using a static QR code enables you to accept payments directly in your bank account, safely and instantly. This eliminates the risk of carrying cash or dealing with delayed payments, ensuring that you receive the full amount from each sale.

By using a static QR code, you can ensure that payment acceptance is seamless, efficient, and safe, without taking up too much time from the customer. This allows you to manage the fast-moving counter with ease, ensuring that your customers have a positive shopping experience and keep coming back for more.

Use Case: Creating Dynamic QR Codes to Display Products and Prices

As a business owner, you want to provide your customers with an easy and convenient way to browse your handmade products and make informed purchasing decisions. However, constantly answering questions about product prices, different varieties, and descriptions can be time-consuming and inefficient.

To solve this problem, you can create a dynamic QR code that links to an online list of your products and their corresponding descriptions and prices. By scanning the QR code, customers can access the menu from their mobile devices and view all of your offerings. The dynamic nature of the QR code allows you to make updates to the menu in real time. You can add new products, remove outdated items, or adjust prices as needed. This ensures that your customers always have access to the most up-to-date information about your products. With a dynamic QR code, you can provide a seamless and efficient browsing experience for your customers, while also freeing up time for yourself to attend to them and create a personal connection with them.

In conclusion, understanding the difference between dynamic and static QR codes is essential for SMEs seeking to leverage QR codes for local business payments.

While static QR codes provide a simple and convenient way to accept payments, their limitations make them less adaptable for dynamic data tasks. On the other hand, dynamic QR codes offer customization, tracking, and additional capabilities that enhance marketing efforts and enable real-time updates. Despite the rise of dynamic QR codes, static QR codes continue to dominate the landscape due to their ease of use and compatibility with popular payment methods like UPI.

However, as the digital payment ecosystem evolves, businesses should explore the potential of dynamic QR codes to enhance customer experiences, streamline processes, and stay ahead of the competition. Whether it's using static QR codes for instant payment acceptance at a crowded flea market or creating dynamic QR codes to display products and prices, businesses can harness the power of QR codes to transform the way they engage with customers and drive business growth.