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Update: ItzCash integrates BharatQR to its POS machines, but why?

Update: Speaking to MediaNama, ItzCash’s chief business officer, Ravi Singh said that the integration was made to make the POS terminals future-proof. However, Singh did mention that there isn’t enough data on how many transactions are happening on BharatQR at the moment. He did mention that if a transaction happens on BharatQR it will be counted as a card transaction and will be settled by the card networks into bank accounts. In contrast, QR code payments on UPI, the money will be settled directly into a merchant’s bank account by the NPCI.

Earlier: Payments and financial services company ItzCash has integrated BharatQR on its POS machines, where customers can pay the amount of sale by simply scanning the QR code displayed on the device from their own smartphone. The company has partnered with MRL Posnet, a POS technology solution provider, to enable BharatQR payments. The company adds that it has added new technologies such as Aadhaar Pay on the terminals and will begin those payments as and when they are more mainstream.

ItzCash forayed into the POS terminal business after demonetization, and has deployed more than 30,000 devices since then and plans to increase it to 100,000 by the end of the financial year.

Lack of clarity on BharatQR

But here is the thing: BharatQR, launched with much fanfare in February, is facing delays as banks are not ready to deploy these codes, as indicated by this Economic Times report. The publication added that banks are stuck in obtaining certifications from card networks and that most banks are RuPay qualified on the acceptance business, Visa and Mastercard are still remaining.

Things are further complicated for BharatQR as the National Payments Corporation of India (NPCI) said that it is trying to merge BharatQR and QR codes generated by UPI. “There are some discussions happening, but there is no decision that has taken place. But there are some efforts in that direction,” Dilip Asbe, COO of the NPCI said in April.

ItzCash should note that NPCI launched the UPI on POS machines. The POS machines would generate a one-time dynamic QR code which when scanned will automatically show relevant transaction details on the customer’s payment app for authorizing payment transfer. As such, BharatQR is a redundancy. MediaNama has reached out to ItzCash and will update when we hear from them.

Meanwhile, there is a lack of clarity from banks if they have to use the UPI for getting BharatQR:

Advantage with MDR

Note, the Reserve Bank of India proposed differentiated MDR between acquiring infrastructure involving physical terminals (POS machines, mPOS etc) and digital acceptance infrastructure models (such as QR codes). Payments through QR codes are cheaper for merchants.

But then again, the RBI needs a proper definition of what constitutes “digital acceptance infrastructure”. In the case of ItzCash, the BharatQR codes will be generated on the POS terminals. Will it be considered as a transaction on physical terminals or digital acceptance models?

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