QR
CODE - ECONOMY
News:
UPI QR Code-Central Bank
Digital Currency interoperability: How does it work and how do customers
benefit?
What's
in the news?
●
With banks enabling the interoperability
of Unified Payments Interface’s (UPI) Quick Response (QR) code with their
central bank digital currency (CBDC) or e₹ application, users of retail digital
rupee will be able to make transactions by scanning any UPI QR at a merchant
outlet.
●
Merchants can also accept digital rupee
payments through their existing UPI QR codes.
Interoperability:
●
Interoperability is the technical compatibility that enables a
payment system to be used in conjunction with other payment systems,
according to the RBI.
●
Interoperability allows system providers
and participants in different systems to undertake, clear and settle payment
transactions across systems without participating in multiple systems.
●
Interoperability between payment systems
contributes to achieving adoption, co-existence, innovation, and efficiency for
end users.
What
is UPI QR code-CBDC interoperability?
●
Interoperability of UPI with the digital
rupee means all UPI QR codes are
compatible with CBDC apps.
●
Initially, when the pilot for the retail
digital rupee was launched, the e₹-R users had to scan a specific QR code to
undertake transactions.
●
However, with the interoperability of the
two, payments can be made using a single QR code.
●
The digital rupee issued by the RBI, or
the CBDC, is a tokenized digital version of the rupee.
●
The e₹ is held in a digital wallet, which
is linked to a customer’s existing savings bank account. UPI is directly linked
to a customer’s account.
Significance
of the interoperability:
●
The interoperability of UPI and CBDC will
ensure seamless transactions between a customer and merchant without having the
need to switch between multiple digital platforms.
●
It will allow a digital rupee user to make
payments for their daily needs, such as groceries and medicines, by scanning
any UPI QR codes at any merchant outlet.
●
Even merchants are not required to keep a
separate QR code to accept the digital rupee payments. They can accept CBDC
payments on their existing QR code.
Go
back to basics:
QR
code:
●
A Quick Response (QR) code consists of black squares arranged in a square grid on
a white background, which can be read by an imaging device such as a camera.
●
It contains information about the item to
which it is attached, according to the National Payments Corporation of India
(NPCI).
●
QR code is an alternate contactless channel of payments. It allows merchants or
businesses to accept payments from their customers directly into their bank
accounts.