In India, mobile penetration is almost 100%. Also, mobile shopping is on the rise, and many retailers are looking for new ways to let people pay in-store using their mobile phones. The most cost-effective way of making mobile payments in-store is by using QR codes. All you need is a mobile phone.
QR (Quick Response) Code is a friction-less 2-dimensional bar-code that is capable of containing information. They’re additionally referred to as “action codes” as they make it easy for consumers to take action after scanning them with their phones. QR codes can be related to bar codes but the difference is that they store information in vertical and horizontal direction while bar codes only store information in horizontal direction.
QR codes are now going to explode as one just pays by a single click. QR codes are gaining wide usage in the business sector, with employment mainly in the payment systems. The current push to a cashless society makes this the most advanced technology and most convenient contactless payment method. One needs to use a smartphone application for them to scan, store and share their code, scan for purchases; making the payment process for business and individual a lot easier.
With more and more use of QR codes, issuers and payee saves a lot of their resources which can be utilised more efficiently elsewhere. Also, QR codes help to bring processing cost and transaction costs down since it involves a bank-to-bank transaction with no third party involved in between.
One of the biggest challenges of mobile payments is finding a solution that works with different devices. But, QR codes help overcome this challenge, as all you need to scan a QR code is a camera on your mobile phone. Also, payment through QR codes is quick and easy as one doesn’t need to enter the details of the person he is paying; just scanning the QR code will identify the person instantly. Besides this, storing your payment details in your mobile phone and carrying it around is much safer than bringing your entire wallet full of cash and credit cards everywhere you go. The probabilities of stealing and deceitful purchases victimizing your payment details are much less with QR codes.
To promote digital payments across rural and urban India, one of the latest payment methods launched by the government that could make transferring funds super-easy is the Bharat QR code, a common QR code jointly developed by four major card payment companies—National Payments Corporation of India that runs RuPay cards, MasterCard, Visa and American Express—under instructions from the Reserve Bank of India (RBI) on 20 February, 2017. It was a revolutionary step because of interoperability. The merchants may be known by one QR code whether or not the payment is through MasterCard, Visa or RuPay. Bharat QR payments may also be made through account number with IFSC code, UPI (Unified Payments Interface) payment address or Aadhaar number. The launch of BHIM (Bharat Interface for Money) app on 30 December, 2016 by Prime Minister Narendra Modi also supports the ‘scan and pay’ feature which has further boosted its adoption across the country.
Dynamic QR Codes gives the QR code owner the ability to change the address to which the QR code redirects to. This implies that dynamic QR codes are transaction specific wherein a new QR code is generated each time for a new transaction. They also result in a less dense QR code image that is more reliable to scan. Dynamic QR code has merchant information, payee’s details and the transaction amount. So there is no need to manually enter the amount which further reduces the friction. It is generated on per transaction basis. Just scan and pay.
We predict that dynamic QR code would be the currency of the future.