BharatQR launched in push to less-cash economy: Here's how new payment system works
How is BharatQR different from a wallet? What are its benefits? All the key facts explained here
BharatQR, another e-payment medium which has been termed the world's first interoperable and low cost acceptance solution, was launched by the National Payments Corporation of India, MasterCard and Visa on Monday. This is another step in the direction of making India a less-cash economy, said a joint press release by the companies.
BharatQR is based on the RBI's Payments Vision 2018, which outlines innovation, interoperability and security as the three pillars to transition the country into cashless economy, the release said.
Launching the solution, R Gandhi, RBI deputy governor, termed the occasion as 'momentus' and said that with the latest solution, the country "is setting yet another standard in the payment arena for others to adopt".
The government has been pushing traders and general public to adopt cashless payment modes ever since Prime Minister Narendra Modi announced the surprise demonetisation of Rs 500 and Rs 1,000 notes. The move that sucked out about 86 percent of the cash in the system resulted in severe cash crunch and even job losses.
For the masses, the only way out of the cash crunch has been digital payment. The government is also forcing common man to adapt. However, small traders, who have been mostly dealing in cash, have largely been reluctant. For one, swipe or PoS machines involve high capital investment (about Rs 7,000 for per piece). Secondly, there has been a severe shortage of these machines as there are no incentives for companies to increase the manufacture so as to meet the demand.
Seen is in this context, BharatQR has the potential to overcome these hurdles in the road to becoming a less-cash society. However, net connectivity could continue to play spoil sport.
Given below are all the details about the BharatQR as given in the press release:
What is BharatQR?
BharatQR is the world’s first standardised Quick Response (QR) code payment solution developed by Mastercard, National Payments Corporation of India (NPCI) and Visa, to expedite India’s transition to a less-cash society.
What are the benefits of BharatQR?
Consumers will not need to scan different QR codes at the same merchant provided by the different payment networks. Merchants will only need to display one QR code at the storefront or through the acquiring bank’s mobile application. The underlying specification for BharatQR can be implemented in other countries to deliver a globally interoperable solution.
How is BharatQR different from BHIM?
BHIM is an aggregator app that interoperably works across the UPI platform services launched by the various banks. BharatQR is integrated within the bank’s payment or mobile banking app. BharatQR simplifies merchant payments from the linked card in the banking app. It provides notifications to merchants on payment receipt.
How is BharatQR different from any wallet?
BharatQR is not a wallet. It is a different form factor of the POS machine. For example, a merchant with an HDFC Bank account can accept a payment from an SBI Cardholder be it a Visa card, Mastercard, or Rupay card. On the other hand, to use a wallet, both the customer and the merchant to whom the payment is made need to have the same wallet. This is often referred to within the industry as a “closed loop” system. For example, an Ola wallet cannot be used to make a payment to a payTM or Freecharge wallet. Payments made or received using BharatQR are backed by strong operational rules for dispute management provided for by the four networks – Visa, Mastercard, American Express and Rupay. Banks follow KYC norms for customer and merchant acquisition, which makes this a secure, safe and robust payment method. BharatQR transactions are processed by well-established payment networks that have processed billions of payment transactions.
Will it work for users without a smartphone?
A deployment option via USSD is being worked on to support non-smartphone users. The companies are in discussions with the government to allow banks and payment networks to have their own short codes like *99 and hope they will be granted access soon.
Countries like Kenya, Pakistan, Tanzania, Uganda and Ghana process as many as 7 million to 10 million USSD transactions per day, and have achieved financial inclusion at scale. With about 700 million feature phone users in India, and over 750 million debit cardholders this technology together with financial literacy programs could significantly help address the last mile problem particularly in semi–urban and rural areas, feel the companies.
Does a customer need to register before using BharatQR for payments?
The customer has to opt-in for the service once using their bank app.
Can I use more than one BharatQR bank application on the same mobile?
Yes. The mobile app of multiple banks supporting BharatQR can be used in the customer’s smartphone.
Does the merchant/recipient also need to register for BharatQR?
The merchants will be onboarded by their acquiring institution after due diligence in accordance with applicable regulations. Many of the acquirers are working on instant merchant onboarding process in order to enable easy sign up.
This is a one-time process after which the merchant begins to receive notifications against transactions performed on the QR Code provided by its acquirer.
What happens if my mobile phone is lost?
If the mobile device is lost or stolen, account holders can have their payment account immediately deactivated by contacting their financial institution. Also no customer data is retained on the mobile phone. All bank payment apps supporting BharatQR have authentication controls in place for identifying users.
Can I map multiple cards/accounts in one app?
Yes, it is possible to map multiple cards/ accounts within the same bank for this service within the bank’s mobile app.
What if my account is debited but the transaction does not go through?
The customer’s bank will arrange to refund the transaction after due reconciliation of the transaction.
What is the limit of each transaction on BharatQR?
The transaction limits are defined by the customer’s bank based on the account / card profile.
Will I be able to use BharatQR after I change my mobile or mobile number?
Yes. The bank may optionally require additional registration on the new device depending on its own policy.
In case another person uses my mobile, is there any security risk?
For any BharatQR transaction to be successfully completed there is authentication - using MPIN. This makes the transaction safe and secure, and is in keeping with the norms prescribed by RBI.
Is BharatQR available across multiple mobile platforms?
BharatQR is available presently on smartphones that are deployed on Android and iOS operating systems.
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