upi, npci

Ever since the landmark demonetization drive, UPI payments have picked up and the government has launched an exclusive BHIM (Bharat Interface for Money) application. Beholding the value amassed by the UPI system within a limited span of time, the National Payments Corporation of India (NPCI) has now introduced a brand new payment option for retail shoppers — under the same.

It is now possible to process payments at retail stores using the Unified Payment Interface (UPI) platform by scanning QR codes. The initiative has been debuted by Reliance Retail —  a subsidiary company of Reliance Industries, crowned as the largest retailer in India. The subsidiary has diffused their new format (UPI payments through QR code) in 200 Reliance Retail, including Reliance Fresh and Reliance Digital across various cities.

The QR code interface is designed by Innoviti Embedded Solutions, an omnichannel payments platform. This interface operates on the existing point of sale (PoS) terminals i.e card swipe machines. The application further makes it possible to enable QR code-based acceptance without any additional capital.

Describing the functionality of the system to ET, Rajeev Agarwal, MD & CEO, Innoviti said,

All that is required is an upgrade of the software on the card swipe machine. In some of the newer machines it can be done by a remote, while older machines may require a visit from our representative.

The immense growth of UPI payments credit to the low merchant discount rate (MDR) offered by the government. For those of you unaware, MDR is the rate charged on services offered by a merchant such as debit/credit card payment facility by his bank depending upon various factors such as volume, average ticket price, risk, and industry. Under the said payment system, the fee to be borne by a seller to provide services is 0.25% for payments below Rs 1,000 and 0.65% for all other charges.

NPCI has forward a plea to RBI to further decrease this rate which is only possible if the bank reduces the fee on debit cards. However, the request has been delayed, demanding sufficient time to decide new rates. Currently, there are 44 banks live on the NPCI platform. These banks go live only after bypassing a thorough reconciliation process and they even have to get their systems checked by security auditors.

Speaking of the innovative idea, AP Hota, MD & CEO, NPCI said,

With the fast growing popularity of UPI-payment apps like NPCI’s BHIM app which has seen close to two crore downloads, this initiative will increase UPI payment acceptance points in retail stores. It is expected to play a vital role in driving a more cashless future.

To push its consumers to adopt this technology, Reliance will employ various cashback schemes and offer discounts on payments via QR code. It believes that the platform will push the digital rush in the country and will enhance the customer shopping experience.

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