Most of us have used the UPI QR (quick response) code in our day-to-day financial transactions. However, what seems like a useful facility today would have been in the realm of science fiction a few years back.
According to Future Market Insights, a market research organisation, the rising number of smartphone users with access to the internet in India has contributed to the expansion of the QR code payment market in India.
The growing trend of online shopping and demonetization has expanded the market. To further strengthen the QR code payment market, the Government of India has launched supportive programmes like the Bharat QR project in 2017, besides specific guidelines by the Reserve Bank of India (RBI).
In a recent report on growth in UPI by the National Payments Corporation of India (NPCI), the total number of online transactions is expected to rise from ₹103 billion in FY 2022-23 to ₹411 billion in FY 2026-27, a compounded annual growth rate (CAGR) of 50%.
Such trends in mobile payments reveal that scanning the code to make a payment is not only currently popular, but its usage will also help the growth of QR code payment apps (applications) in the coming years. If you are looking for a solution that helps you make UPI QR payments conveniently and securely, the Shriram One app offers you the perfect solution.
Shriram One is an all-in-one online payment app designed for financial management and simplifying everyday tasks. We offer a comprehensive range of financial services ranging from bill payments, recharges, and subscription service management, among others. It is an integrated platform that eliminates the need for multiple apps, making mobile payments efficient and seamless. Download Shriram One to enjoy all the benefits it has to offer.
This post will help you understand how UPI QR functions, making scan-to-pay popular and factors that will contribute to its growth.
Key Highlights
|
UPI and QR Payment System Explained
UPI stands for Unified Payments Interface, a real-time payment mechanism developed by the NPCI. You can make payments directly from one bank account to another through the UPI system through your smartphone.
UPI QR codes are used to initiate UPI payments. They facilitate the receipt of payments by scanning the UPIQR code from any UPI-linked mobile app. The QR is a pattern of black squares arranged on a square grid over a white background. Imaging devices can read these patterns that store a large amount of information.
How Does the UPI QR Code Work?
UPI QR codes are also known as scan to pay. When a customer uses a smartphone to make a mobile payment, they access the information stored within the code, including the merchant's bank account number and IFSC (Indian Financial System Code). The QR UPI code directs your customers to the payments page, where they can choose from the available payment options and complete the transaction.
The customer or the payer can use their smartphone to scan this code and complete a QR payment or transaction. You must note that a few QR codes may require a specific QR code payment app to complete the transaction.
Why Is The UPI QR Code Popular?
You can use the QR UPI payment option for your transactions at the roadside tea stall, an upscale fashion outlet, or for your cab ride payments which shows the acceptability across business sizes and types.
As per the recent data released by the NPCI, the UPI posted 9.41 billion transactions in May 2023. With an increase of 37% from 2022, the total value of UPI transactions was recorded at ₹14.30 lakh crore in May, a growth of 58% year-on-year. It is to be noted that the platform had over 300 million monthly active users as of November 2022.
Security
UPI QR is a secure way of completing payments for both the payer and the receiver. The customer does not have to save their payment information, which may be susceptible to fraud as the UPI QR code simply links the payer's QR code payment app to the receiver account.
The QR code is simply a tool that exchanges data. The data is encrypted by the QR code payment app, which adds to the security of the transaction. Customers can make mobile payments without sharing personal information like account numbers.
Instant Payments
Another benefit of the UPI QR code is that, unlike a few other payment options, there is no delay in receiving payments. After the customer completes the scan-and-go process, the amount is credited to the account within a few seconds. While delays may compromise your liquidity, instant payments do away with this issue, besides the need to track and tally your receipts. Merchants also save on paying charges associated with other non-cash payment methods.
Ease of Use
The scan-to-pay option is a hassle-free way of payment as you need to take fewer steps to make the payment. You do not need a credit card as you can scan the code with your smartphone and complete the transaction. The COVID-19 pandemic highlighted the necessity and utility of contactless payment, and QR codes offer the perfect solution, unlike cards or cash.
Simple to Setup
If you are a business looking at setting up a new payment channel, you might have to invest in special equipment or redesign your payment process, but not with QR UPI.
You only need a QR Code payment app and a standard printer to set up this payment option.
Versatile
The scan-to-pay option is versatile and helpful in making transactions at both online and offline merchants, providing convenience to both the business owner and the customer.
QR codes can be scanned and read by any QR code reader irrespective of the platform it was generated on. This is another factor that adds to their popularity as any app that supports UPI can be used to make the payment.
The Future of QR Codes for Mobile Payments
The UPI QR code is a popular choice of payment for several reasons discussed above and is expected to witness further growth and acceptance.
- The Indian QR payment market has expanded significantly due to rising smartphone usage. QR UPI payments are easy with smartphones that have internet access.
- The e-commerce market has witnessed rapid growth in India. The integration of QR codes on e-commerce platforms also aided their acceptance and usage. Users find it convenient and safer to pay for online transactions using QR codes.
- After demonetisation, the Indian government took many steps to encourage digital payments, including QR code payments. Demonetisation saw an increase in QR payments across companies of different sizes and types. This trend is expected to be a part of the ecosystem and will continue to grow.
- The Government of India introduced the Bharat QR project in 2017 to promote and formulate regulations for this payment method. The RBI released guidelines and processes related to QR code payments that provided clarity and confidence to users.
Conclusion
In recent times, smartphones with internet access have significantly changed everyday lives by replacing watches, calculators and wallets. In such an ecosystem, when businesses and customers look for secure and convenient ways to make mobile payments, UPI QR codes offer the ideal solution.
To make online payments securely and do other useful things like investing, booking tickets and even playing games, download the Shriram One app here
When using digital payment options, following a few basic steps helps you stay safe and avoid fraud. You must not share your passwords, PINs, or OTPs (one-time passwords), and avoid clicking links you are unsure of. Additionally, you should use passwords to keep your phone locked as a safety measure.
FAQs
1. What are QR codes in the context of mobile payments?
QR codes facilitate mobile payments; they allow a smartphone to scan displayed codes and then initiate the payment through a QR code payment app or a browser.
2. How do QR codes work for UPI payments?
QR codes encode the merchant's UPI ID and other payment information. When a customer scans the code with their UPI app, it automatically fills in the merchant's details and the amount the user has to pay. The customer can confirm the transaction after reviewing the details.
3. How do I generate a QR code for receiving UPI payments?
You can generate a QR code by using the UPI app which has a built-in QR code generator. Another option is to use a third-party QR code generator available online.
