Card network Visa and payment gateway BillDesk have partnered to enable BharatQR for 50 service providers which include Tata AIG, ACT Broadband, Reliance Energy, Gujarat Gas, MTNL, Aircel, Tata Power, Pune Municipal Corporation, and Calcutta Electricity Supply.
At the moment, it looks like Visa is looking to onboard more utility companies rather than small merchants for pushing BharatQR. Last month, it tied up with two power distribution companies in Andhra Pradesh so that people could pay their electricity bills. In July, Delhi Metro integrated BharatQR in its ticket counters, where customers can recharge their smart cards and tokens by scanning a QR code displayed.
Right now, 30 banks have enabled their banking apps and Visa says that there are nearly 400,000 merchants who accept BharatQR payments. But Visa nor BillDesk has provided details on how much merchants will be charged for enabling BharatQR payments.
Last year, 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 will be cheaper for merchants. MDR is an interbank exchange fee merchants have to pay for enabling digital payments.
UPI QR and BharatQR merging
Last month, the National Payments Corporation of India (NPCI) instructed banks to ensure that their applications be equipped to read both UPI QR as well as BharatQR by 15th September 2017. BharatQR will also now have UPI credentials along with IFSC and Aadhaar credentials.
The UPI and BharatQR have different MDR so it will be a challenge for card networks and the NPCI to sort out where the transaction is originating and charge merchants accordingly. On the UPI, merchants are charged a merchant discount rate (MDR) of 0.25% for payments below Rs 1,000 and 0.65% for all other charges.
Wallets are still not allowed
Meanwhile, wallets such as Paytm and MobiKwik, which pioneered QR code payments in India, are still not allowed to be part of the UPI or BharatQR. Remember that banks wanted to keep wallets out to get an advantage over them. The decision of allowing wallets to be part of the UPI will still be after the Reserve Bank of India (RBI) finalizes the guidelines. “There is a draft policy document from the RBI so I’m sure once the things are discussed things will be formed,” acting CEO Dilip Asbe had said.