The QR Code Evolution/Revolution!!

QR Code: A QR code, also known as a Quick Response Code is a 2-D (two dimensional) barcode. A QR code usually contains information pre-programmed by the originator. It could be a URL, text, image or general information. To reveal the information, the user will require a mobile phone software with the ability to scan and understand the code using the mobile phone’s camera.

A QR Code is an ISO 18004-compliant encoding and visualization of data.

QR Code Based Payments: The Visa QR Payments Code is a form of barcode that has the merchant’s information (merchant name & account details) required for bill settlement. To make payments, all that is required is for the customer to scan the merchant’s QR code by selecting Visa QR on his/her mobile banking app.

The new world of commerce with the QR code can be conducted anywhere there is an outlet — you can stand on the surface of the planet and get a cell phone signal. It is quite likely, in many of these markets, that plastic and legacy POS will leapfrog almost entirely. The standard must also be capable of enabling a secure payment via a static QR code on a merchant placard.

A QR code is a pointer to an underlying credential to initiate and receive a payment. The pointer now is a QR code — I don’t know if it will always be. But, in these markets, QR is about getting credentials in everyone’s hands and getting the usage understood. From there, is it is an easier evolution to provide other use cases to people based on something beyond QR.”

Visa QR is an innovative way to make payments with your mobile phone. There is no need to carry cash everywhere you go. Just select Visa QR on your mobile banking app and scan the merchant’s QR code to make payments.

How Do QR Code Payments Work?

Customers simply need to scan the QR code and enter the transaction amount. The amount gets transferred directly from the bank account without the need of a swiping machine. It eliminates the need of entering the merchant’s ID or phone number to make payments.

For those using mobile banking apps for scan and pay, the app acts like a virtual debit card that can be used online or offline.

1.Buyer-to-Large Merchant Transactions – Buyer Scans

This system of QR Code payment applies to large retailers such as supermarkets. Let’s assume they have barcode scanners at every POS.

This is how it works:

  • Let’s say customer picks up items worth INR 500 at Merchant shop and goes to the cashier for checkout
  • The cashier scans each item and generates a bill of INR 500. He generates a unique QR Code on a screen near the POS
  • Customer opens the payments app on her smartphone, scans the QR Code, and authorizes the payment
  • The cashier gets a notification that customer has made the payment and prints the sale receipt.

2. Buyer-to-Large Merchant Transactions – Merchant Scans

There is another variant to this QR Code payment method:

  • Instead of scanning a QR Code generated on the cashier’s screen, customer generates a QR Code on her app or Customer owns a card with a QR Code
  • The cashier then uses his barcode scanner to scan this QR Code and complete the payment.

3. Buyer-to-Small Business Transactions

This mode of QR Code payments applies to small businesses and retail outlets. Let’s assume they do not have barcode scanners at POS.

This is how the process works:

  • Customer picks up items worth INR 100 at a small store
  • The cashier requests her to make a payment and points at a printed QR Code near the POS
  • Customer opens the payments app, scans the QR Code, enters the amount, and authorizes the payment
  • The cashier gets confirmation via SMS

Note that in this case, the buyer enters the amount and the merchant has a permanent QR Code. This QR Code helps the buyer app to identify the merchant account.

4. Peer-to-Peer Transactions

This mode of QR Code payment applies when an individual needs to pay another. For example, friends, family members, or self-employed professionals.

What is Scan and Pay?

It is a mobile-based payment facility that enables fund transfer by scanning a quick response (QR) code using an app which supports this feature. It can be used for making payments at merchant outlets, e-commerce websites and grocery stores, among others.

How did it evolve?

Visa introduced mVisa, a QR code-based payment facility for Visa cardholders only.

In November 2016, MasterCard launched an interoperable Masterpass QR which could be used with other networks.

In India, E-wallets companies like Paytm, Mobikwik and FreeCharge also enable transactions through QR code, but both the receiver and the sender of money needs to have these mobile wallet apps.

However, QR code-based acceptance systems in the India country were largely closed until the launch of Bharat QR, a common QR code jointly developed by four major card payment companies—National Payments Corp. of India (NPCI) that runs RuPay cards, MasterCard, Visa and American Express—under instructions from the Reserve Bank of India (RBI) on 20 February.

It was a revolutionary step because of interoperability. The merchants could be identified by one QR code whether the payment is through MasterCard, Visa or RuPay. Bharat QR payments can also be made through account number with IFSC code, UPI (Unified Payments Interface) payment address or Aadhaar number.

Nitin Sharma

Nitin is Senior Consultant @ Verinite. Passion to learn about Cards and Payment domain. Loves to travel and explore nature a lot.