Bharat QR Code Digital Payment System

Bharat QR Code Digital Payment System

Demonetization and then a massive push for digital transaction – the Union Government seems to be in no mood to give air to black money or corruption as such. To propagate the digital payment system through Indian economy, which is largely a cash-based economy for now, the government has been announcing sops and various incentives for those who adopt cashless transactions in India. The government did a number of things like:

Bharat QR Code Payment System

  • UPI or Unified Payments Interface for those who use smartphones.
  • USSD-based mobile banking for those with feature phones and basic phones. USSD stands for Unstructured Supplementary Service Data.
  • Then came the BHIM app or Bharat Interface for Money, which is a UPI-enabled unified payments app. It also supports Aadhaar Pay.
  • Then there was Aadhaar Pay which used peoples Aadhaar number for payments, which integrated biometric authentication as well.

Latest development? The Bharat QR Code Payment System. It too is designed for cashless and digital transactions.

Why Bharat QR Code?

There is no denying that post demonetization, digital transactions increased by leaps and bounds. The usage of credit cards and debit cards also increased significantly. However, using plastic money (that is, cards) came with several problems. First of all, merchants had to provide PoS machines – that involves costs of both fixed and recurring variants. And not to mention, end users, that is consumers, had to pay transaction fees. The Bharat QR Code is a result of the initiatives government wanted to overcome the problems faced in case of plastic money. It is a far simplified system of digital transactions. In the later segments of this article, we will try to understand this new payment system in bit details. You ready?

Origins of QR Code in India

Before diving deep into Bharat QR Code, let us take a look at the origins of QR Code in India. The whole concept was created by VISA – the leading card (plastic money) company in India. So basically, VISA is the company that pioneered QR Code. However, the system was introduced in India only 1.5 years back in form of mVisa. Though mVisa is in its nascent stage in India, many countries in the world have actually adopted the system heavily. In India, TataSky – the DTH service provider was among one of the first service providers in India to team up with VISA and provide QR Code-based payment option to subscribers of TataSky.

Only last year, that is, in 2016, India saw a new entrant in QR Code ecosystem. It was Masterpass QR Service from MasterCard. However, MasterCard actually teamed with Ongo Wallet from Ratnakar Bank to launch its QR Code. There are talks about RuPay soon launching QR Code service but exactly when is still unknown.

We cannot forget mobile wallets like FreeCharge, MobiKwik, Paytm etc. They heavily use QR Code system but there is a problem. Both the receiver and the sender of the money needs to have these mobile wallet apps.

Put in simple words, if you are using Paytm and you want to send money to someone, the receiver needs to have Paytm app and Paytm account too. Yet another problem is that a Paytm user cannot sent money to MobiKwik or FreeCharge or any other mobile wallet user.

This limitation also led to the creation of Bharat QR Code.

Understanding Bharat QR Code

When you go to a merchant and you try to pay with your debit or credit card, you will first have to swipe your card and then, you will be required to key in your security code or PIN on the PoS machine and then the payment will be made.

Now, with the Bharat QR Code launched, the merchants can actually get rid of PoS machines. If you have a VISA card or a RuPay Card or a MasterCard, you can use your smartphone and pay the merchant using your debit card or a credit card. This means that merchants can save money that they would otherwise need to invest on PoS terminals and then, they can also do away with the need for paying transaction fees that these merchants need to pay every bank for using their PoS machines.

Using Bharat QR Code – How to Do That?

There is a bummer you see. You cannot you the Bharat QR Code unless you have BHIM app installed or unless the mobile app of your bank that you are using has Bharat QR Code integrated in it. As of now, Pockets from ICICI Bank and PayZapp from HDFC bank have integrated Bharat QR Code. BHIM app on the other hand has Bharat QR Code integrated in it.

Here is how you can use Bharat QR Code:

  • Fire up your BHIM app.
  • Tap on Scan & Pay option.
  • Point your phone’s camera towards the Bharat QR Code on display with the merchant.
  • The code will be scanned and the merchant details will be come up on your phone.
  • Provide the amount you want to pay.
  • Enter your security PIN (UPI PIN).
  • Enter remarks if you want to do that.
  • Tap on ‘Send’ and the payment will be made.

If you are using any other app which has Bharat QR Code integrated, you need to follow the same steps. Once you authenticate payment using your PIN, any card that you have added to your app (be it an app from your bank or be it BHIM app), will be source card from where the money will be deducted. Only requirement is that you should add a VISA card or a RuPay card or a MasterCard.

Only you authenticate the payment, the money will be immediately transferred to the bank account of the merchant.

Why is Bharat QR Code Better?

As a merchant, all you have to do is to generate the QR code from within the BHIM app, have it printed and displayed at shop. That’s all. Any payment made to the merchant using Bharat QR Code will go directly into the merchant’s account and nowhere else. It will be an immediate transfer because IMPS service will be used. On top of that, the cross-compatibility issue of mobile wallets will be eliminated. The transaction limit set by mobile wallets under RBI directive will not be applicable. Also, since the money goes directly into bank account, the need for transferring money from wallet account to bank account will be completely eliminated. It will be fast and efficient.

Is Bharat QR Code Secure?

Yes, Yes, Yes! It is extremely safe because you do not share any details of your card with your merchant. Even PoS terminals are risky because of skimming technology out there, which can copy your card details (name on card, card number, expiry date and even CVV number). This risk is completely eliminated while using Bharat QR Code. Just scan and pay. It is extremely safe because of the hi-tech security of IMPS service provided by NPCI or National Payments Corporation of India. As a matter of fact, a system this safe and this advanced while being this simple is non-existent anywhere else in world. Till date, there has been no news of any security breach and NPCI is constantly striving to enhance the security features even further.

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