In a notification released last Friday the National Payments Corporation of India (NPCI) has mandated that every UPI application should be able to scan BharatQR codes and respond to merchant payment requests.
The NPCI has said that all banks running UPI applications need to adhere to such guidelines by April 16, failing which transactions will be declined for non-compliance.
“Above interoperability features must be enabled by April 16, 2018 by all BHIM UPI apps. The other compliance as per earlier circulars shall continue to be applicable. PSP bank must decline such transactions from non-compliant BHIM UPI apps after 16th April 2018 proactively. NPCI reserves the rights to decline the transactions for such non-compliant apps,” the circular stated.
Two things must be noted here. Firstly, this seems to be the most serious push or interoperability that the NPCI has made so far. The threat of being kicked off the system may be the most prudent way to get app makers to comply. While multiple UPI apps support interoperability when it comes to QR payments and peer-to-peer transfers certain outliers still remain. Secondly, the push to integrate BharatQR into UPI apps reflects the banking body’s desire to drive digital payments into brick and mortar outlets. Currently, QR codes from mobile wallets like Paytm see wide usage at merchant outlets, BharatQR though can ensure that merchants and customers don’t have to rely on a particular payment app or wallet.
Merchant apps like Amazon Pay and others have reportedly been otherwise kept out of the mandate since they might not want to push UPI for peer-to-peer transactions.
UPI and the issue of compliance
While most of the major UPI apps already support the use of BharatQR, some like WhatsApp remain non-compliant. Whatsapp launched its UPI-powered payments service in India last month to some anger over its lack of interoperability and alleged disruption of an ‘open’ system. (The openness of UPI is up for debate.)
Following the launch, incumbent payment services in India felt Whatsapp was playing by its own rules. Most vocal among them was the PayTM CEO, Vijay Shekhar Sharma. In an interview with CNBC Sharma said, “Whatsapp is killing India’s ‘beautiful, open UPI system’, and that it has gotten preferential access to UPI.
The National Payments Corporation of India (NPCI) then released a statement responding to the controversy where they said the Whatsapp rollout was a “beta launch with a limited user base of 1 million and low per transaction limit.” There have been no updates since on if the beta has ended and a full rollout has taken place.
In August last year, the NPCI decided to merge BharatQR with QR codes generated by UPI apps. In a notification to member banks, the National Payments Corporation of India (NPCI) instructed them to ensure that their applications be equipped to read both UPI QR as well as BharatQR by 15th September 2017. At the same time, the NPCI instructed all RuPay acquiring banks to integrate UPI credentials in BharatQR along with IFSC and Aadhaar credentials.