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Mumbai: A committee set up by the Reserve Bank of India to review the Quick Response (QR) Code has recommended that payment system providers should make these codes interoperable.

According to the recommendations of the committee, there should be multiple interoperable QR codes to drive the acceptance infrastructure. The committee said that there should be multiple QR codes like Bharat QR Code and UPI QR to enable faster on-boarding of all types of merchants for digital payments.

Currently, there are three types of QR codes operating in the country. Bharat QR, Unified Payments Interface QR and proprietary QR codes.

A potential example of an interoperable QR system could be Bharat Bill Payments System (BBPS) currently caters to all utility billers like electricity, telecom, gas, water and DTH, wherein the billers are offered a standardized platform for third party bill payments. “A separate interoperable BBPS QR will augur well for billers to ensure faster onboarding using existing systems established with BBPS. It will offer an additional payment channel for the biller as well as the customer," the report said.

The committee therefore recommended phasing out of closed loop QR codes as it requires customers to manage separate apps. “While closed loop systems make the customer experience more convenient, they also require customers to acquire and manage a payment app," it said.

The committee also said that the government and RBI should allow a controlled interchange instead of zero Merchant Discount Rate on QR code, UPI and RuPay Debit card transactions, as well as give tax incentives to merchants who accept payments through electronic mode. MDR is the margin earned by digital payments service providers on each transaction. Whenever a customer makes a transaction at a point-of-sale ('PoS'), the merchant pays a fee to the payment gateway on every such transaction for transferring the money to the merchant's account. Currently, the government has removed the MDR on businesses with annual turnover of more than 50 crore to promote digital payments across the country.

The committee also recommended that the regulator may accept the existing bank account as a valid KYC for faster merchant onboarding. The merchant acquiring bank however shall be responsible for the KYC of the merchant.

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