To promote digital payment at a wide scale, the Indian government is planning to mandate a quick response (QR) code based payment method option using Unified Payments Interface (UPI) at all shops.
The GST council has already given a go-ahead to the proposal. The govt has for the project roped in NPCI to work on a necessary mechanism to launch it nationally.
The move will also provide GST benefit to both shops and consumers, according to govt official quoted by TOI report.
The prime idea behind the proposal of mandatory QR code-based payment is to make digital payment more popular and bring a behavioral change in the ecosystem. The advantages of QR code payment are, it allows a consumer to buy goods and services without the need to swipe plastic cards.
The process also records necessary information related to the transactions. Data loss and security breach are minimized. The QR code may also be introduced on invoices, added the sources.
In terms of mobile payment in the world, China has emerged as a leader. Chinese payment firms such as Wechat and Alipay widely use this mode payment. In China, it has been reportedly used while tipping at restaurants, receive cash gifts at weddings and collecting alms by beggars.
This is largely driven by the large adoption of mobile payments. It has changed the social habits of the country. Many countries like Singapore and Myanmar in the world are fastly adopting this mode of digital payment.
The QR code payment is reported to have witnessed exponential growth in consumer adoption in ASEAN countries.
Developed by Denso Wave in Japan, QR code is said to store over 4000 alphanumeric characters. Initially, it was used for tracking components in the automotive industry.
It is cost effective in comparison to POS machine and mPOS machine costs. As per an estimate, it costs about $1 to put up a laminated QR code sign at a shop.