Pay easy by logging into Bharat QR

Bharat QR is the world's first inter-operable QR-based payment system. Yes, you read that right. It's a global first and launched right here in India.

The genesis of Bharat QR was mVisa and MPQR, both independent and non-interoperable QR-based payment solutions developed by Visa and Mastercard respectively, for emerging markets with low penetration of POS machines. mVisa launched in India first, with Axis, BOB, HDFC Bank, ICICI & SBI going live on this platform before demonetization.

Demonetization jolted the entire country into using cards as well as other alternates to cash. At the same time, both Visa and Mastercard presented their QR solutions to the Reserve Bank of India (RBI) and Ministry of Finance. RBI rightly insisted on an inter-operable solution with all banks and all networks Visa, Mastercard and NPCI's Rupay. A special industry task force was set up to quickly develop the protocols for interoperability and driven by this task force, a complete bank – network inter-operable Bharat QR solution was launched, in a record 45 days flat!

What is the significance of Bharat QR? Simply put, it has the potential to address the issue of under-penetration of card-acceptance points in the country.

India has less than 1,000 card terminals per million of population, compared to Brazil's 30,000+ China / Russia's 4000+. Why so low? Small merchants never saw the need to get a card machine, owing to abundance of cash with customers, not to mention the habit of tax avoidance. At the same time, banks did not find it viable to invest in expensive terminals at small merchants, as the meagre earnings on low-card transactions was not enough to justify the cost of the terminal and servicing.

Bharat QR gives merchants the power to accept card payments, without having a card machine! This opens up endless possibilities for small merchants, professionals, quasi-professionals, service providers and literally anyone who needs to accept payment for a product sold or service rendered.

The bank provides Tent cards and Stickers to the merchant, with their merchant id converted and displayed as a QR code. The merchant also gets to download an app which displays his QR code on the mobile screen. Customer can scan this QR code using any bank payment app, enter amount, and pay through linked card authenticated with a pin. It is as simple as that.

Furthermore, with device binding on mobile apps in addition to pin requirements, the risk of fraud through stolen card usage on terminals is negated, even more due to the transaction being "customer initiated" rather than "merchant pull" transaction.

So, there are wallets with QR payment solutions. What's the big difference?

Firstly, in Bharat QR, the payment goes straight to the merchant's current a/c, unlike PPI solutions, where the money goes and sits in a limited usage pre-paid wallet a/c. Secondly, there are no limits on amount that a merchant can receive through Bharat QR, whereas wallets are restricted by RBI PPI guidelines. Thirdly, prepaid wallets are CUG (closed user group) solutions. The sender can only receive it through one wallet, and receiver must receive it on the same wallet. On the other hand, Bharat QR works with Visa, Mastercard, Rupay (and Amex, Diners soon) and most bank payment apps can be used to scan the same Bharat QR and pay.

With increasing awareness, merchants who never sought a card machine from banks, will come forward to sign up and get their own Bharat QR. At the same time, banks would not hesitate any more in signing up small merchants. This would significantly help in proliferating the less cash objective.

The writer is group head - marketing, credit cards and payments business, HDFC