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Bharat QR Code

Bharat QR Code – How this latest cashless payment method works?

India gets a new method of cashless payment – Bharat QR Code. This post explains how Bharat QR code works and everything else you need to know about Bharat QR Code.

India has seen a steep increase in adoption of cashless modes of payments ever since demonetisation. Both private and government organisations are coming up with new methods to ease digital payments. Indian Government is trying hard to push the society towards less-cash system. An earlier and quite successful attempt was the launch of BHIM app.

Bharat QR Code is another step towards a less-cash society. This can help to attract more people towards cashless payment methods.

What is Bharat QR Code?

Bharat QR Code is a Quick Response code which stores the bank details of a merchant which can be scanned by a smartphone to transfer a certain amount to merchant’s account. All this is done by a smartphone app developed for this purpose. This system replaces the need of having POS machines to accept payments by credit or debit cards. This system has been developed jointly by Mastercard Inc, Visa and RuPay.

How Bharat QR Code works?

Suppose you visit a merchant and you need to pay for goods or services. You have a credit/debit card belonging to Mastercard, Visa, RuPay or American Experess network but the merchant doesn’t have a POS machine where you can swipe the card. Now due to introduction of Bharat QR Code, the merchant doesn’t necessarily need to buy a POS machine. The merchant just needs a unique QR code which can be scanned by customer to transfer a specific amount directly to merchant’s bank account.

Do we require any app to use this service?

Yes, you need an app installed in your smartphone to use this service. However, there is no centralised app to do so. Every bank will develop their own app or add this feature in their existing apps. No matter, which bank you hold an account with, you will be able to use Bharat QR Code, if you have a card which belongs to one of these four networks viz, Mastercard, Visa, RuPay and AmericanExpress.

Some reports even suggest that HDFC bank is developing one such app. According to GadgetsNow, “HDFC Bank has appointed payment tech company In-Solutions Global (ISG) to provide an end-to-end merchant acquiring platform. ISG will provide a package which includes app development to the switch.

ICICI Pockets has added support for Bharat QR Code

Pockets app by ICICI bank has already added the support for this new payment system. You can download this app for both android and iOS.

How to use ICICI Pockets to make payments using Bharat QR Code

  1. Customers with Pockets app click on Bharat QR to scan the QR code at the merchant establishment.
  2. Pockets app automatically enables the camera in the phone.
  3. Customers will be presented with a payment screen displaying merchant details and amount to pay.
  4. Customers can select from any of their Visa, MasterCard or Rupay cards for payment.
  5. Transaction is completed and the customer sees a success screen. The merchant receives a notification on his phone for the transaction.

How is Bharat QR code different from Paytm?

The main difference between the two is that in Paytm when we send money it remains within the same bank account (i.e, Paytm’s account). They just update the wallet balances accordingly. This is known as “closed loop” system. On the other hand Bharat QR Code is an “open loop” system where funds are transferred from customer’s account to merchant’s account irrespective of the bank.

Advantages to Merchant

The biggest advantage to the merchants is that they don’t need to buy an expensive POS machine at all. All they need is just a QR code which can make them capable of accepting digital payments.

A Quick Fact

Reportedly, QR code is one of the most popular mode of payment in China. According to FirstPost, Bharat QR code replicates the China model of digital payments. In china, apps like WeChat and wallets such as Alibaba’s Alipay have made payment using QR codes.

After UPI, Bharat QR code would be second cashless method option which will see a push from the government side according to report in the Financial Express. Apart from working as a common interface for Mastercard, Visa and RuPay cards, Bharat QR Code will also help with payments using Aadhaar-enabled payments and bank transfers.

So, what do you think of this addition to cashless options in India. Do let us know in the comments below!

Zaid Moharkan

Tech Enthusiast, Programmer and a Computer Science Student. You can follow him on Facebook and Instagram.

3 thoughts on “Bharat QR Code – How this latest cashless payment method works?

  1. Unfortunately, all articles on this topic gave same information.

    How does it work doesn’t answer many questions such as,
    – if merchant has multiple accounts, does s/he need to display multiple QR Codes?
    – if merchant has only savings/ current account with a bank, and didn’t opt for any plastic that is generally issued by tech participants developed the solution; how does this work?
    – similar to BHIM, does this solution restrict you to use only one bank account at a time?
    – what if a merchant has multiple accounts with same bank and want to use each of them for different collections, for example institutional payments and retail payments are collected to different accounts or electronics, clothes, grocery purchases to different accounts (in case of biyani’s central format)?

    1. Although we can’t answer all of these questions until we see the system in action. Still let me try to answer few of them.
      1. As per my own assumption, the QR code will store the details of just one account. So, merchant may need multiple QR codes for different accounts.
      2. Regarding your second question, if merchant didn’t opt for any debit/credit card, will this work? Yes, because merchant only needs a bank account and a QR code linked to that account. The customer needs to have a card to pay with, not the merchant.
      Regarding your 3rd and 4th question, for now I will go for a the same assumption as stated in the first answer.

      All these questions will be cleared once we see the first app launched with such functionality. Till then, stay connected 🙂

      1. The customer too need not have a debit/credit card.All he needs is his bank app (with of course bank account)which has support for scanning BharatQR.

        And you missed one big advantage of this feature. Earlier when we had the private wallet we could only transfer the amount to that particular wallet and not three other competing wallets. With this it’s possible. A Paytm wallet user can send money to a FreeCharge wallet user or any bank account or any credit/debit card (including international cards)

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