Bharat QR

Abhishek Balaji, March 2017

BharatQR was launched by the National Payments Corporation of India (NPCI) in September 2016 to integrate card payment services like Visa, MasterCard and RuPay.

QR codes have been around since 1994 and add another dimension to traditional barcodes. QR codes are information dense and can store URLs, contact information, email addresses, and even service specific data.

These codes have several advantages over traditional barcodes:

• QR codes can be static or dynamic. They can be easily generated, allowing custom creations for any purpose. We will see more on this with respect to payments later.

• They are easy to read from a phone camera and can be printed on paper or displayed digitally.

• QR codes are universal and can be used to store up to 4296 alphanumeric characters or 7089 numerals.

QR codes make payments seamless across all methods and virtually eliminate the need for a physical point of sale (PoS) device. BharatQR is a major step in achieving the dream of seamless payments on multimodal transport networks in smart cities that use a Common Mobility Card.

Here’s why BharatQR is promising:

Universal acceptance

The QR codes can be generated by any merchant with a current bank account and accept all cards by VISA, Mastercard, RuPay, American Express and will even support UPI and Aadhaar Pay soon! Although the number of merchants without a current account is fairly large, certain regulations prevent anyone from generating a QR code and accepting payments through payment aggregators like Mastercard, Visa, RuPay and American Express. This eliminates the need for a physical PoS device, which brings hefty rental fees and transaction charges along with it.

Interoperability

BharatQR doesn't bring anything new to the table, but builds on making existing technology more interoperable. For example, to make a transaction at a merchant without a physical PoS device, the customer would have to use one of the payment services which the merchant advocates such as Paytm and scan the proprietary QR code. BharatQR integrates these wallets and banks with the mammoth credit card networks such as Mastercard, Visa, American Express and RuPay. This allows the card networks to coexist with the payment wallets and banks to ensure maximum interoperability. The goal of BharatQR in the long run should be to make the payment instruments completely invisible, but with the current differential transaction charges and unclear regulations, it remains to be seen how soon this can be implemented.

Security

Merchants have the choice between using static QR codes or dynamic QR codes. Static codes will only hold the merchant’s information and the transaction amount. A few other details need to be provided by the customer who is making the transaction. Dynamic QR codes on the other hand are generated on the fly and a merchant can generate a specific QR code with even the transaction amount stored. The customer has to just scan the QR code from their bank’s mobile app or available third party apps and complete the transaction.

UPI integration

Since most bank apps undertook a major overhaul to integrate UPI, with Bharat QR integrated too, you can directly pay with your bank account instead of dabbling with credit/debit cards. Simply link your UPI VPA to the bank’s app and start using the QR codes!

Speed

Since the payment is being initiated through the banking application, all the authentication can be preempted to reduce the number of steps when making the transaction. Unlike a traditional PoS which involves a very carefully calculated sequence of events for a successful transaction, most of the information required for a transaction such as the card number, customer information and second or third factor of authentication are already relayed to the payment service. This ensures simplicity and lesser margins of error.

With a large number of concerns being raised on the security of payment instruments, it remains to be seen how BharatQR will fare in the ever so dynamic payment space.