In the latest push to promote digital economy in India, the National Payment Corporation of India (NPCI) has developed a Quick Response or QR code based solution, christened BharatQR, that will enable people to make cashless payments without the aid of card-swiping machines. Here is a look at how QR codes work.
What is a QR Code?
A QR code is a two-dimensional black-and-white square product label comprising patterns that can be read by an optical machine and contains information about the product. QR codes are widely used for making cashless payments (Paytm uses QR codes widely), ticketing and other applications. Many smartphone apps employ the phone camera to read the QR code.
What is BharatQR?
Bharat QR is an initiative by the four main card companies, NPCI (RuPay card), Mastercard, Visa and American Express to have a single QR code identification platform. Currently, 15 banks have signed up to use the BharatQR code. So, customers using BharatQR will be able to pay regardless of the bank and the payment card they are using.
Which banks are covered under this initiative?
The participating banks include:
- Axis Bank
- Bank of Baroda
- Bank of India
- Citi Union Bank
- DCB Bank Ltd
- Karur Vysya Bank
- HDFC Bank
- ICICI Bank
- IDBI Bank
- Punjab National Bank
- RBL Bank Ltd
- State Bank of India
- Union Bank of India
- Vijaya Bank
- Yes Bank
Which card can be used with BharatQR?
Currently, Mastercard, Visa and RuPay card users will be able to user BharatQR. Work on including American Express cards is ongoing.
"Right now we are in the final stages of integration. I will not give the time frame whether it will happen in 6-8 weeks. We are on board and work is on. We are working on the integration," Manoj Adlakha, CEO India, American Express Banking told LiveMint.
How to use this system?
Visa, Mastercard and RuPay cardholders, as well as account holders of the participating banks can use BharatQR with a QR code reader app. HDFC bank's ZapPay, ICICI's Pocket app, and other bank's apps will also be able to read BharatQR. Once the app has been downloaded, the user can scan the QR code at the merchant's end and enter the amount and the PIN to make the payment.
The merchant can also generate a dynamic code for each transaction, thus eliminating the need for the user to enter the amount. The user can then just authorise the transaction with the PIN.
What are the future development plans?
BharatQR is compatible with Android and iOS apps currently. Work is on to make it work with USSD code for feature phone users at well. The support for Unified Payment Interface is also being worked upon so that apps such as the government's BHIM app can be used to make payments using the BharatQR code.
Today, Paytm announced that it will invest ₹600 crores in QR code system and technology. The e-wallet company Mobikwik also welcomed the initiative.
"With one code access, India will achieve its target of being a digital economy sooner... Going forward, we are confident that the government will consider including wallets in BharatQR," Vineet Singh, Chief Business Officer for MobiKwik told HuffPost India.