By Katherine Beaty
The COVID-19 pandemic fueled a rapid adoption of QR codes, transforming them into a mainstream tool for contactless payments and digital access. According to Statista, around 89 million mobile device users in the U.S. engaged with QR codes in 2022, a 26% increase from 2020.
Although this widespread adoption has driven convenience, it has also created a new attack vector for fraud. In the parking industry, reports of QR code scams have become increasingly common, with bad actors replacing legitimate codes with fraudulent ones, leading customers to fake payment sites.
Traditional QR code fraud prevention tactics
Operators have long relied on common security measures to mitigate QR code fraud, including:
• Tamper-proof materials to secure printed QR codes
• Cybersecurity training for staff to recognize altered or suspicious codes
• Reputable QR code generators to reduce vulnerabilities
• Customer education on the risks of fraudulent QR codes
Although these tactics are helpful, they are often reactive rather than preventative, meaning fraud is typically discovered after customers have already fallen victim. A more proactive approach is needed.
A smarter defense: monitoring how transactions begin
Instead of relying solely on securing QR codes, operators should monitor how parking transactions are initiated. With modern data analytics tools like Microsoft’s Power BI and real-time reporting, tracking transaction sources is both feasible and highly effective.
Most parking systems can categorize transactions by their entry method:
• Text-to-park (SMS-based)
• QR code scans
• Direct mobile payments (via an app or website)
By tracking these sources, operators can identify suspicious anomalies, such as:
• A sudden drop in QR code-based transactions, indicating potential tampering.
• A decline in text-based initiations, suggesting fraudulent QR codes might be diverting users.
• Unexpected geolocation data or irregular transaction spikes, which could point to scam activity.
Proactive fraud detection and response
By flagging unusual transaction patterns, operators can:
• Pinpoint high-risk zones where QR code fraud may be occurring.
• Trigger enforcement teams to inspect and verify posted QR codes in real time.
• Enhance customer communication, using data insights to educate parkers about safer payment options via branded SMS messaging or in-app confirmations.
The case for prioritizing text-based transactions
While QR codes offer convenience, text-based transactions (SMS parking) provide a more secure, reliable alternative. Encouraging customers to favor text-to-park options can:
• Reduce the risk of fraud, since text-based systems don’t rely on physical QR codes that can be tampered with.
• Improve customer service, as SMS transactions allow for direct communication between the operator and the parker, eliminating anonymous interactions.
• Provide better data insights, enabling operators to tailor marketing efforts and customer engagement strategies.
One way to encourage adoption is by prominently displaying text-to-park options above QR codes, reinforcing their security benefits to users.
Additionally, parking operators should consider offering incentives for customers who choose text-based transactions. For example, a small discount or added loyalty points for those who opt for SMS-based payments can nudge users toward the more secure option. This not only enhances security but also creates a more direct line of communication between the operator and the customer, further improving service and engagement.
Emerging technologies to strengthen fraud prevention
Beyond source tracking, artificial intelligence (AI) and dynamic security measures are shaping the next frontier in fraud prevention:
• AI-driven behavioral analytics can detect and block suspicious payment activity in real time.
• Dynamic QR codes that refresh periodically or change positions on digital screens make tampering significantly more difficult.
• Blockchain-based authentication can further enhance transaction security by verifying payments before processing.
Another emerging concept is geofencing technology, which enables operators to track customer locations in real time and cross-check payment sources. If a transaction appears outside the geofenced area, the system can flag it as potentially fraudulent. Combining geofencing with AI-driven fraud detection can significantly reduce QR code-related scams.
Mitigate the risk
There’s no foolproof way to eliminate QR code fraud, but by tracking transaction origins and using data-driven fraud detection, parking operators can stay ahead of bad actors rather than just reacting to fraud after it happens.
Combining source monitoring, real-time alerts, and customer education ensures a safer, more secure parking experience while reinforcing trust in digital payment solutions.
KATHERINE BEATY is executive vice president of customer experience for TEZ Technology. She can be reached at katherine@teztechnology.com.
