Quick Response code (QR code) emerged as one of the significant innovations that made payments very easy. The codes are the best ways to promote digital and cashless transactions that became essential, especially after the global pandemic. In addition, the unified payments interface or the UPI helps transfer money between bank accounts across a single window.
With the UPIs, you can send, receive, and make payments to a merchant, shop, or service provider by scanning the QR code. For making the payments using the UPI QR codes, you need to have a mobile application and the virtual address of the payee.
The Introduction of the UPI QR Code
Previously, the Payment System Operators (PSOs) and banks joined the foray of QR codes. It motivated the customers to oversaturate their smartphones with digital payment applications. To make the transactions hassle-free, the RBI initiated an overhaul of the system, directing all PSOs and digital banking applications to cease the generation of closed-loop QR codes.
The RBI announced to phase out the proprietary codes. The digital banking and payment applications, including FavePay, Razorpay, Paytm, and others, are supporting interoperable QR. Recently, the government introduced two such codes- Bharat QR and UPI QR.
How does The Change Help the Customers and Merchants?
Often merchants use only one QR code app, while their customers use others. In such a scenario, either the customers have to deal with the cash or bounce to another merchant that accepts payments from their app. The single UPI QR code system offered hassle-free transactions and streamlined the digital payment ecosystem.
With the new system, neither the merchants have to host multiple QR codes, nor do the customers have to oversaturate their phone with payment apps. A single UPI code works across all the UPI apps, regardless of the issuer. The new system of single UPI code eased out the transactions, and the merchants did not have to host multiple QR codes or lose their customers.
Benefits of UPI QR Code
The new UPI QR code brought the following merits to the merchants and the customers.
- No need for POS machines
With the UPI QR code, merchants no longer require the POS machine. The UPI applications serve the same purpose as a POS machine. When a customer swipes the card, the amount automatically transfers to the merchant’s account. Similarly, when someone scans the QR code, the amount is transferred to the payee’s account. Besides the initial investment required for the POS machine, merchants need to pay additional transaction fees. However, with the UPI QR code, they need not invest an extra amount for the machine or pay any transaction fees.
- Diverse payment options
Broadening the payments options for the customers is an ideal decision. Besides generating more sales, it enhances the value that the customers derive from shopping with that particular brand or merchant.
- Better security
Some people are afraid of using their cards for payment through POS machines. Although negligible, they fear that someone might steal their sensitive details. UPI QR codes eliminate that possibility, as they reveal no data to third parties. Therefore, QR codes offer more security and confidence to the customers.
- Better customer experience
The interoperable QR codes help businesses differentiate the experience they provide their customers. For example, customers can make payments using any UPI app application instead of the specific ones with the new norm.
Where Can You Use the QR Codes?
The QR codes have two classifications- static and dynamic, which are helpful depending on the case. As the name suggests, you cannot alter the static code after generating. Besides, you cannot track the metrics with the code. On the other hand, while dealing with the dynamic code, you can alter the code and the content and track the metrics.
If you run a retail store or place QR codes in ID cards, static QR is the best choice. On the other hand, dynamic QR codes are the best when dealing with bills, invoices, and delivery receipts.
There are endless benefits to the QR code payment method. It’s a technological boon for both the consumers and the merchants