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Tuesday, 06 December 2016 04:06
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Interoperable QR, on mobile phones, is a big step


Few doubt the National Payment Corporation of India’s (NPCI) United Payment Interface (UPI) is a very secure way to transfer funds through a mobile phone, but with just 21 lakh unique users and under 200 merchants using it right now, it is far behind wallets such as those operated by PayTM. Which is why, while pushing banks to publicise the benefits of UPI which is an open system – payments can be made across bank accounts – the government’s post-demonetisation digital push is focusing on several fronts, the most important of which is increasing Point of Sale (PoS) machines that can be used to swipe debit/credit cards; at Rs 530,000 crore on an annualized basis, PoS payments have risen around 30% each year for the last three years. While India has just around 15 lakh PoS machines compared to the 2 crore RBI Deputy Governor R Gandhi estimates it needs, technology could make PoS redundant for a certain section of the population. With payment firms like Visa and Mastercard working on mobile PoS – a user simply scans the merchant’s quick response (QR) code and makes the payment from his phone – the number of possible PoS machines has gone up to 220 million, the number of smart phones in the country. Both Visa and Mastercard have collaborated to share barcoding technology so anyone with, say, an HDFC Bank Payzapp app, can scan a QR with her mobile phone and make a payment with either a Visa or Mastercard, NPCI’s RuPay will soon be on the same platform.


Being able to do the same with the QRs that merchants have from UPI would be a force multiplier since any mobile app of a bank could be used to pay either using a Visa, Mastercard, RUpay or directly through a bank account linked to UPI. But the coding protocols for Mastercard and Visa are quite different from those of UPI. With at least five groups in the government – from one headed by Niti Aayog CEO Amitabh Kant to one headed by power minister Piyush Goyal – working on digital payments, there is little doubt a solution will emerge to that as well. Whatever the views on whether demonetization was a good or a bad thing, with so much energy being spent on going digital, it seems certain India’s payments space will never be the same again.



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