BharatQR launched, faces competition from Paytm2 min read . Updated: 21 Feb 2017, 02:15 AM IST
Currently, 10 banks have come on board as issuers, and will provide customers with the ability to pay using the QR code technology and 14 more have agreed
Mumbai: In a bid to make digital payments to merchants cheaper, the National Payments Corp. of India (NPCI), Visa Inc. and Mastercard Inc. on Monday launched the world’s first nationwide interoperable payments service.
BharatQR is part of an effort to promote digital payments and transform India into a less-cash economy following the demonetisation of high-value currency notes in November.
It has the same back-end technology as debit and credit cards do.
Instead of swiping a card, the customers can simply make payments by scanning the QR (quick response) code and entering the transaction amount.
ALSO READ | BharatQR code unveiled today: An explainer
The amount gets transferred directly from the bank accounts.
Interestingly, mobile-wallet firm Paytm on Monday said it would invest up to Rs600 crore over 10 months to improve and expand its own QR code-based payments network and add 10 million merchants across 650 districts.
BharatQR was launched by Reserve Bank of India deputy governor R. Gandhi, who said “ interoperable solutions like BharatQR are essential to accelerating India’s transition to a less-cash society".
Currently, 10 banks including State Bank of India (SBI), Punjab National Bank, Bank of Baroda (BoB), ICICI Bank Ltd, HDFC Bank Ltd and Axis Bank Ltd, have come on board as issuers, and will provide customers with the ability to pay using the QR code technology.
And 14 banks including SBI, BoB, Union Bank of India, ICICI Merchant Services, HDFC Bank, Axis Bank, City Union Bank Ltd and Vijaya Bank, have agreed to come on board as acquirer banks, providing payments services to merchants.
American Express too is on board to adopt BharatQR for its customers.
“Initially we had come up with a QR-based payments solution, but we soon realized that if everyone had their own solution, then there would be some confusion in the market, with merchants having to put up QR codes of each different service," said Porush Singh, country corporate officer, India, Mastercard.
“We said that it would be great to have an interoperable system similar to the card acceptance infrastructure used today," Mastercard’s Singh added.
Merchants will be charged a merchant discount rate—a charge they pay banks for using the point of sale terminal to accept a card transaction.
“Through greater interoperability and lower merchant discount rate, BhartQR is a significant step in driving digital payment adoption at merchant locations," said Vivek Belgavi, leader-fintech, PricewaterhouseCoopers India.
He added that“concerted efforts" would be needed to “get merchants to adopt this platform".