Connecting Brands & Consumers

The QR code goes from zero to hero 

The humble QR code, long viewed as being useful only for inventory management and marketing, has evolved into one of the success stories of the pandemic and has been embraced as one of the most efficient contactless payment systems available.  


Origins – super-charged barcode  

To understand the development of the QR code, it’s also important to understand what it was designed to replace – the barcode.  

Back in 1948 at Drexel University in Philadelphia, engineering student Bernard Silver overheard a discussion between the dean of his department and a local grocery store president about creating a way to read product information at the checkout, in order to reduce manual data entry and human error. 

Bernard and his friend Norman Woodland decided to tackle the task and within a few months created what became known as the barcode. Originally in a bullseye format of concentric circles, it was developed in the linear format still used today in the 1960s. 

By the 1970s, the barcode had been adopted by retailers, transport and carmakers as an important part of inventory management. In the 1980s, barcode readers had shrunk from the size of refrigerators to handheld models, and the Universal Product Code (UPC) – a barcode unique a specific product – was released. This led to an explosion in use as retailers could now easily manage common products. 

But while the barcode made some things easy, it had a number of limitations. As Zara Rizwan pointed out on the Scanova blog, barcodes: 


  • Are one-dimensional, storing data in one direction, which means the scanner needs to line up perfectly with the barcode 
  • Can store only up to 20 characters 
  • Are difficult to use on small products 
  • Are vulnerable to dirt or damage 
  • Only encode alphanumeric characters 


So researchers got to work developing advanced, two-dimensional versions of barcodes. The problem with the first 2D barcodes was that they were proprietary, so none of them were adopted widely. 

Then in 1994, Toyota commissioned its engineering company Denso Wave to come up with an improved barcode in order to improve efficiency and speed on its assembly line. Denso engineer Masahiro Hara developed a solution he called the Quick Response (QR) Code or QR code. 


A key part of the development was not in the design but in the execution. Denso Wave decided to make the specifications of the code public so anyone was free to use it. The company still holds the patent rights but decided not to exercise them. This allowed widespread adoption of the technology, including to Toyota’s competitors as well as other industries. 


How QR codes work  

QR codes operate using a matrix rather than lines. Kaspersky reports that a standard QR code has six components: 


  • Quiet zone – the empty white border around the outside. 
  • Finder pattern – usually in the form of three black squares in the bottom left, top left and top right corners, which tell the QR reader that this is a QR code and show where the code begins and ends. 
  • Alignment pattern – another smaller square contained somewhere near the bottom right corner that ensures the code can be read even if it is skewed or at an angle. 
  • Timing pattern – an L-shaped line that runs between the three squares in the finder pattern, which help the reader identify individual squares within the code, making it possible for a damaged QR code to be read. 
  • Version information – a small field of info near the top-right finder pattern cell that identifies which version of the QR code is being read. 
  • Data cells – the rest of the QR code communicates the actual information, such as website address, phone number, or the message contained in the code. 


Advantages over barcodes 

 There is a range of improvements QR codes offer over barcodes (adapted from the Scanova blog):  

  • Unlike the 20-character capacity of barcodes, QR codes can store up to 2,953 alphanumeric characters including spaces and punctuation (or 7,089 characters without spaces). 
  • While containing more info, QR codes can take up less space than barcodes. 
  • QR codes can be scanned from any angle, so a QR code reader doesn’t need to be held in a specific manner. This makes them easy to use with a smartphone camera. 
  • QR Codes can encode numeric, alphanumeric, binary, and even Kanji (Japanese writing) characters. This makes it easy to encode website addresses, documents, multimedia files, or simple text into them. 
  • A feature called error correction means that QR codes are scannable even if up to 30% of the code is damaged, distorted or dirty. 
  • You can password protect your QR Code against any unauthorised scan. When scanned, the end-users will be prompted to enter the required password to be able to access the encoded data. 


Early uses 

Although first focused on the automaking industry, QR codes spread to the pharmaceutical and retail industries to track inventory. With the development of smartphones in the 2000s, their use by consumers exploded as first QR reader apps and then smartphone cameras themselves created a QR reader in everyone’s pocket. This led to their use for marketing, social media, and security applications, including: 


  • Displaying text to the user (such as more information on a product) 
  • Sending people to a webpage with more information 
  • Sending people to an e-commerce page where they can purchase an item
  • Linking to an app download 
  • Authenticating online accounts and verifying login details 
  • Accessing Wi-Fi by storing encryption details 
  • Composing an email or text message 
  • Sharing contact details (such as at a trade show) 
  • Ordering from a restaurant menu 
  • Helping to find a book in a library 


The fall and rise of the QR code 

After a flurry of activity by marketers using QR codes once they could be accessed via smartphones, interest waned in the second half of the 2010s as marketers ran out of ideas for using them and they became distracted by other new shiny things. 

Then came COVID-19. When health officials realised that QR codes were an effective way to gather information in a contact-free manner, they developed applications that could gather data used for contact tracing of the disease.  

Suddenly, venues all around the world were using QR codes to check-in visitors. People could hold their phone up to a code, fill in a form on their own phone, not touching anything else, and send their info and location data to a centralised body, which would track where people infected with the virus had visited and inform the government and even other people who had visited the venue. 

This revived interest in QR codes by marketers, who were reminded how simple and ubiquitous they were to use, and they are now popping up in advertisements, the sides of buildings and even as the focus of campaigns. For example, Elton John’s image has been transformed into an ‘LGBT-QR Code’ in a European Pride Month campaign that turns digital out-of-home screens in charitable donation kiosks, sending people who point their cameras at the code to a donation page for the Elton John AIDS Foundation. 



QR codes and payments 

The other development accelerating the use of QR codes recently is their use in payment services. While China payments companies WeChat & Alipay users have been using QR codes to process payments from their respective super apps for more than 10 years, merchants in the rest of the world have been slower to adopt their use.  

In Australia, epay has offered the ability for our retail customers to accept QR Code payments for more than 5 years and we were one of the first alternative payment providers in the market. Post-Covid, the use of QR codes has only accelerating with more banks and retailers realising that QR codes are a simple way to process payments. 

In retail, a  QR code payment can work in two ways, either the customer may present their unique QR code credentials to the retailer to scan and complete the sale or the retailer may present its own QR code to the customer to scan and complete the sale.  ,  

For businesses, QR code payments are an easy way to offer their customers a wider choice of payment options that suit their needs.  

Once viewed as a simplistic tool to navigate you to a website faster, the QR code’s simplicity has ensured that they have become embedded in many aspects of everyday life. 


Ray Welling, PhD is a writer, lecturer and podcaster specialising in digital marketing and communications. He is the author of Digital Disruption and Transformation: Lessons from History, a retrospective on technology and marketing during the first decades of the Internet in Australia.