By January, 2017, India will witness a massive financial collaboration never seen before. Three of the largest payment processing and payment card companies: Visa, MasterCard and RuPay will join their forces, and provide a unified interface for all merchants, traders and businesses in India for accepting cashless payments.
QR (Quick Response) Codes would be the catalyst of this cashless collaboration, as the mechanism will enable every citizen with a smartphone to pay seamlessly via QR Code.
The highlight of this scheme, called as India QR, is the interoperability and openness of the QR Code enabled payment ecosystem. As you are reading this blog, Piyush Goyal, Minister of State for power, coal and renewable energy is conducting high level meetings with payment processing companies, banks and Govt. officials in order to launch the platform by January, 2017.
How Will It Work?
Say, a customer visits a nearby grocery shop and purchases a soap and a kilo of rice, which amounts to Rs 50.
Once India QR is live, the customer will only scan a QR Code provided by the shopkeeper on his smartphone, and enter the amount. The cashless transaction is done.
Behind the scenes, the payment processing companies (Visa or MasterCard or RuPay) will work with the shopkeeper, and provide him a QR Code, which would be directly linked with his bank account. As soon as the customer makes the payment via QR Code, the amount would be directly transferred to the linked bank account.
The same would happen with the customer as well. He will have either Visa or MasterCard or RUPay linked app, which will have the power to scan QR Codes, and would be linked with the concerned bank account.
QR Code Payment – Story So Far
Visa has already launched a QR Code based payment mechanism, called mVisa, which was launched in Bangalore last year. MasterCard has its own Master Pass QR Service, which was launched in partnership with Ongo Payment Wallet (by Ratnakar Bank)
Even Paytm has a QR Code mechanism to send money to another user; but as only Paytm to Paytm transfers are possible, it is a closed eco-system.
On the other hand, India QR will be platform independent, and customers having any bank account, having either Visa, MasterCard or RuPay can pay to any merchant or trader, having either Visa, MasterCard or RuPay.
This would be the first instance when such payment industry biggies will collaborate to form a common ground for enabling a truly cashless world.