Reserve Bank has been taking many initiatives for encouraging digitization of payments within the country and enhance financial inclusion through digitalization. Currently, in the light of the continuing Covid 19 pandemic, RBI has set up a high-level committee to check the employment of Quick Response (QR) codes to process contactless transactions. The panel is in the final stage of submitting their reports.
The high-level committee headed by professor Deepak Pathak, IIT Bombay, includes scientists, academicians, and industry experts who have been asked to figure out the economics of QR deployment at merchant locations, the advantages of having an open-loop and interoperable system as well as suggested guidelines for regulating deployments.
Since some companies are using own payment system for processing the transactions, there are a lot of concerns in the ecosystem which are against the spirit of innovation and broader ecosystem expansion.
In the case of a closed-loop QR system, the principle of interoperability agreement between the banks and third-party payment applications will get violated since such a system accepts payments from the mobile application of its deployer only.
The experts say – the option of providing contactless payment facilities for consumers should be made compulsory for several categories of merchants, which could further necessitate a standardized protocol for companies deploying these labels.
Another constraint is that there’s a necessity to increase consciousness among rural consumers and sellers regarding the usage of using QR codes and also the benefits of using it within the present scenario where social distancing norms have to be followed.
Benefits of using QR transaction:
1. The codes do not expire. A person can make multiple payments to a particular person using the same code and vice versa.
2. Any data that gets transferred through QR codes is also encrypted ensuring that your details are safe.
3. The codes are difficult to tamper with. As a result chances of any kind of theft or scam through this mode of payment are also minimal.
4. For this particular mode of transaction, none of the parties (sender and receiver) will be asked to share any details
5. Finally, it helps avoid close contacts/touches.
Leading Unified Payments Interface (UPI) players like Google Pay, Amazon Pay, Paytm, PhonePe, BharatPe, and Mobikwik have started employing these QR stickers to onboard merchants, enabling contactless UPI payments.
