The National Payments Corporation of India (NPCI) and payments companies Mastercard and Visa on Monday launched the BharatQR (quick response) code solution, in a likely bid to counter increased acceptance of QR code-based payments, especially those operated by fintech player Paytm, among small merchants in the wake of demonetisation.
A QR code consists of a digitally-readable arrangement of black and white squares, which would typically store data related to a merchant’s bank account. BharatQR is based upon the debit and credit card infrastructure, most of which is owned and operated by Mastercard, Visa, NPCI-owned RuPay and American Express. As such, it will be completely interoperable, which means one need not have a card issued by the same company that has issued the QR code for the merchant.
Fourteen banks are operationally ready to deploy BharatQR. These are: Axis Bank, Bank of Baroda, Bank of India, City Union Bank, DCB Bank, Karur Vysya Bank, HDFC Bank, ICICI Bank, IDBI Bank, RBL Bank, State Bank of India, Union Bank of India, Vijaya Bank and Yes Bank.
NPCI managing director and CEO AP Hota said he sees the top 50 banks coming on board in the next six months.
TR Ramachandran, group country manager for India and South Asia at Visa, said one million merchants will be acquired under BharatQR by the end of the calendar year.
The revenue model for BharatQR would be the same as the merchant discount rate (MDR) model for point-of-sale (PoS) machines. Since the cost of installation of QR code placards is much lower than that of PoS terminals, payment companies have asked the Reserve Bank of India to allow a lower MDR charge for these systems, Ramachandran said.
In the next phase of development in the Unified Payments Interface (UPI) channel, which will go live by June, BharatQR will be incorporated, Hota said. “In the UPI applications, you have the ‘send’, ‘collect’ and ‘scan and pay’ (options). That ‘scan and pay’ at the moment does not use BharatQR. Now we will be going on to the next version of UPI and BHIM (Bharat Interface for Money) with BharatQR because the specifications for BharatQR are different from the earlier QR we had syndicated in RuPay,” he said.
Once linked to UPI, consumers will be able to make payments using their virtual payment addresses (VPAs), he added. Asked about the possibility of mobile wallet players such as Paytm joining BharatQR, Hota said NPCI was open to the idea, but the decision rests with wallet companies. “Let them examine.
Paytm have their own QR, but if they find it beneficial, they can adopt BharatQR. It is for them to decide.” Paytm reportedly announced on Sunday that it would invest R600 crore in expanding its QR code-based network.