Quick Response (QR) Code: Definition and How QR Codes Work

What Is a Quick Response (QR) Code?

A quick response (QR) code is a type of barcode that can be read easily by a digital device and which stores information as a series of pixels in a square-shaped grid. QR codes are frequently used to track information about products in a supply chain and often used in marketing and advertising campaigns.

QR codes are considered an advancement from older, uni-dimensional barcodes, and were approved as an international standard in 2000 by the International Organization for Standardization (ISO).

Understanding Quick Response (QR) Codes

QR codes were developed in the 1990s as a way to provide more information than a standard barcode. They were invented by Denso Wave, a subsidiary of Toyota, as a way to track automobiles throughout the manufacturing process. Unlike barcodes, which require a beam of light to bounce off of the parallel lines, QR codes can be digitally scanned by devices such as mobile phones.

QR codes consist of black squares arranged in a grid (matrix) on a white background and are read by specialized software that is able to extract data from the patterns that are present in the matrix. These codes are capable of containing more information than traditional barcodes, and primarily handle four modes of data: alphanumeric, numeric, binary, and Kanji.

Despite the increased data capacity, QR codes have not been as popular with consumers as expected. Rather than being created by consumers to share information, they are most commonly associated with advertisers and marketing campaigns.

QR codes have become more widespread in facilitating digital payments and in cryptocurrency systems such as displaying one's Bitcoin address. QR codes are also increasingly used to transmit web addresses to mobile phones. For instance, the QR code shown below encodes the URL for this very entry on Investopedia. Use your phone to give it a try.

Quick Response (QR) Codes vs. Barcodes

The amount of information that can be conveyed about a product or service was traditionally limited by the amount of space on the product’s packaging or the advertisement touting its benefits. If a consumer wanted more information about the product—availability, price, attributes—they would have to find a salesperson or request additional documentation.

Barcodes are commonly found on the back of product packages and convey data using a combination of various widths of parallel lines, which can be read by machines that have an optical scanner.

The barcode revolutionized the way that companies managed inventories and pricing and was first put to practical use in the 1960s by U.S. railroads to track equipment and containers. Traditional, two-dimensional barcodes came into common use in U.S. retail stores in 1974. Barcodes are now found on everything from employee ID badges and hospital bracelets to shipping containers.

Types of Quick Response (QR) Codes

There are a number of QR code types that may be used for different items. They include:

• Micro QR Code: A smaller version of a traditional QR code that is used when space is limited. Micro QR codes can vary in size but the smallest is 11 x 11 modules, encoding up to 21 alphanumeric characters.
• Model 1 QR Codes: Model 1 is the prototype of Model 2 and Micro QR. One to 14 versions are registered to the Automatic Identification Manufacturers International (AIMI) standard. Its maximum data capacity is 468 bytes, which can encode up to 707 alphanumeric characters.
• Model 2 QR Codes: Model 2 has an alignment pattern for better position adjustment and contains greater data density than Model 1. One to 40 versions are registered to the AIMI standard, with version 40 capable of storing up to 4,296 alphanumeric characters.
• IQR Code: Can be created in squares or rectangles in cases where space or shape is an issue. It can be in any one of 61 formats.
• SQRC: Features a restricted reading function to contain private information.
• Frame QR: Customizable frame that can contain larger data in formats such as graphics, illustrations, or photos.