Eliminating the entry barrier to digital payments in India

QR codes - Eliminating the entry barrier to digital payments in India

By Sunil Param | September 10, 2021

Sunil Param is the Head of Content and Communications at Pine Labs.

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If one were to scout for a silver lining amidst the gloom and doom of the COVID-19 pandemic, it will have to be the fact that digital payments adoption in India is at an all-time high. In fact, UPI alone has clocked more than 3 billion transactions twice in July and August 2021 and in terms of value is at an all-time high of Rs 6.39 trillion in August 20211.

"The awareness and adoption of digital payments has increased, and benefits associated with it e.g. Safety, Convenience, Instant payment were the key triggers. 36% households surveyed used digital payments for the first-time during lockdown, and we were delighted to have an affirmation of the universal nature of the adoption across all segments," said Praveena Rai, COO, NPCI, during the release of the NPCI-PRICE REPORT, 20202.

The Reserve Bank of India (RBI) has also started publishing a Digital Payments Index (DPI) and the 30% rise in the DPI between March 2020 and March 2021 is another indicator of the growing adoption of digital payments in India.3

If we are now to work on these phenomenal gains, it becomes imperative to build greater level of awareness around some of the promising digital payments solutions available today. Such awareness should also focus on addressing the perceived cost barriers in the adoption of digital payments in India. A good thing is that a large part of that role is already being performed by consumers who have taken a liking to these digital payment products during the pandemic and are making merchants rethink their "cash-only" approach at the point of sale.

QR codes are a good case in point. QR code usage for payments has increased recently, most likely due to the fact that this 'scan and pay' contactless payment mode gives the control back in the hands of the consumers and delivers a completely contactless and faster checkout experience. No wonder the volume of digital payments using UPI QR was approximately 250 million on a monthly basis, as per a June 2020 RBI report.4

Smart Innovations in QR

With the proliferation of smartphones and the expansion of the internet across the length and breadth of the country, QR codes are emerging as an easier and most cost-effective way for merchants to accept digital payments.

The QR code payments revolution in India that started with paper sticker QR codes shortly after the 2016 bank note demonetisation is now up for another overhaul with the advent of the digital QR codes embedded within the PoS machine or delivered directly to the mobile phone of the consumer to be subsequently scanned at the point of sale.

The future seems bright with NPCI's e-RUPI

The first week of August 2021 saw a new contactless digital payments instrument called e-RUPI being launched by the honorable Prime Minister of India, Shri Narendra Modi. At Pine Labs, our Engineers simultaneously launched the vaccine voucher acceptance of e-RUPI on UPI QR. Agility has been a hallmark of our product development prowess.

BPCL and Pine Labs

After decades, Pine Labs' association with Bharat Petroleum Corporation Ltd. (BPCL) is still going strong. From our initial years when we launched an offline mode of payment for BPCL to just recently when we launched a unique and dynamic QR-based prepayment model to help commuters save time in fuel refilling. We managed to bring to life a complex tech integration for this to work. Here's a quick glimpse of the video.

What's important and what will determine the future of QR code payments in India is how focused we all are in elevating the user experience. The banking regulator and the government are doing their bit to create awareness around digital payments. The ease of use, convenience, and safety are all parameters that will have to be a 100% focus in all exciting foreseeable use cases of QR code payments in India. After all, QR codes are a promising addition to digital payments, one that can eliminate the perceived cost barrier to adoptions of digital payments in India.

1 https://www.npci.org.in/what-we-do/upi/product-statistics

2 https://www.npci.org.in/PDF/npci/knowledge-center/Digital-Payment-Adoption-in-India-2020.pdf

3 https://www.thestatesman.com/business/pandemic-pushes-digital-payments-rbi-index-30-1502987823.html

4 https://rbidocs.rbi.org.in/rdocs/PublicationReport/Pdfs/ANALYSISQRCODED11971A9B9874EAFA1A61478F461E238.PDF