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India bars payment firms from issuing new proprietary QR codes to improve interoperability

Written by Ben Jiang Bin Published on 

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The move would also help improve the acceptance of digital payments across the country.

The Reserve Bank of India (RBI), the country’s central bank, has banned payment firms from issuing proprietary QR codes for digital payments and urged firms using more than one QR code to adopt at least one interoperable QR code by March next year, according to new norms released by RBI on Thursday.

The move is likely to help with the ease of use of mobile payment and improve interoperability among various payment firms, such as Paytm, PhonePe, as well Amazon and Google’s payment services in the South Asian nation.

There are three types of payment QR codes existed in India, the proprietary ones developed by payment firms, as well as the Unified Payments Interface (UPI) and Bharat QR—the only two interoperable payment codes—developed by the National Payments Corporation of India.

As of July, there are more than 20 million UPI QR codes being used at merchant points that contributed around 250 million digital transactions on a monthly basis.

RBI expects the measures to “reinforce the acceptance infrastructure, provide better user convenience due to interoperability and enhance system efficiency,” it said in a statement.

The central bank also said that it will continue its consultative process to standardize and improve interoperable QR codes.

Before now, different Indian payment players have issued their own QR codes that are being used across the country’s vast retailing network. Merchants might opt for any proprietary payment codes while consumers would have to install a variety of payment apps on their phones to do digital transactions.

“If a customer wants to use a phone to pay at 10 different retailers—each with its own proprietary system—he or she would need to manage 10 separate apps,” said a previous report by a panel—which has voiced for higher interoperability of QR codes—assembled by RBI that recommended the new norms.

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