Thursday, 3 August 2017

BharatQR - The Make in India payment movement

BharatQR The Make in India payment movement

Scan and Pay! Quick Response codes have been in the Indian payments market for more than 3 years but its large scale acceptability was only witnessed post demonetisation.  Scan and Pay is a mobile-based payment facility that enables fund transfer by scanning a QR code using an app which supports this feature. It can be used for making payments at merchant outlets, e-commerce websites and grocery stores, among others. Customers simply need to scan the QR code of the merchant and fill the transaction amount. The amount gets transferred from customers bank account to merchant's bank account in seconds. It eliminates the need of expensive PoS machines and cards. PayTM was the largest beneficiary of cash ban as it had invested Rs. 600 crore of QR code technology. Even road side vendors accepted PayTM as trustworthy and easy to use payment solution.

India has 330 million debit cards holders against 1.5 million PoS machines. To eliminate the mismatch, Visa was the first to introduce mVisa back in 2015. During the demonetisation, Mastercard launched its MasterPay QR code service with RBL Bank. All these initiatives failed that they lacked interoperability. Collaboration is the key element for success in the payments industry. Visa, RuPay, MasterCard and American Express came together to announce BharatQR - a unique and inter-operable QR code standard, that lets merchants accept push payments from their customers.

India has the most sophisticated public payments infrastructure in the world. - Raghuram Rajan, former RBI Governor

BharatQR is the first of its kind initiative in the world where payment providers join hands to simplify the way we pay. No other country in the world has this kind of technology. India is the pioneer in QR code payments technology. We can be a guiding light for other economies in the field of public inclusion in digital payments. BharatQR is cheaper and easy to operate when compared to conventional PoS machines.

BharatQR is an open network solution. If a merchant has a BharatQR code, I can pay the merchant regardless of
  • Which issuing bank’s app I am using (e.g. ICICI Pockets, HDFC Payzapp).
  • Which card network’s card I have connected to the issuing bank’s app (e.g. Visa/Rupay/Mastercard/Amex).
  • Which acquirer has setup the merchant account, and given him his BharatQR.
Currently, 10 issuers, 14 acquirers and 4 card networks have already signed up for BharatQR, and more (around 20) are expected to join in the next month. To use BharatQR, users need to install BHIM app or mobile banking apps of respective nationalised banks. BharatQR will act as a disruptor in payments scene in India but it's not an inclusive solution for 1.2 billion Indians. Feature phones have a penetration of more than 50% in India. Though BHIM works on all feature phones, yet the process to pay is too difficult to understand for first time users. For greater adaptability, payment providers and banks need to launch interoperable and secure solution for all Indians.

Tap and Pay with NFC is a far greater technology than Scan and Pay. Recently, Reliance Jio announced that its JioPhone would come NFC payments feature. Nearly all 4G enabled feature phones in coming months will have this technology. We are here talking about a technology similar to Apple Pay and Samsung Pay but superior due to its zero operational costs and wider acceptability. NFC payment receivers can be installed at trains stations, public buses and stores. India's largest bank, State Bank of India has said that it will install NFC receivers in 1,00,000 PoS machines. Post demonetisation, India is looking to find the perfect payment solution for conventional debit cards. Whether its Scan and Pay, Tap and Pay or Fingerprint banking, we are leading in inclusive payments technology.

- Chaitanya Kulkarni

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