QR Code Interoperability And Its Impact On Different Industries

In the field of technology, interoperability acts like a springboard from which businesses can take off and explore further possibilities.

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The wave of innovation and technology that has invaded the world has brought with it myriad benefits. The biggest and most important benefit of technology has been that it has brought the world closer and has enabled people and businesses to foster multidimensional relationships in a seamless and efficient manner. However, do you think that we would have been able to foster the true benefits of technology if innovation operated in silos? If a certain system or solution only operated in a certain country, in a certain language and perhaps only within a limited group of people? Most likely not!

The true value of technology can only be harnessed if it is interoperable or easy to harmonise across providers and users. Simply put, it is the ability of different systems to operate seamlessly. Interoperability is an industry buzzword that is slowly gaining a lot of popularity in the current ecosystem – especially when it comes to QR codes. The ability to standardise a QR-based system offers myriad benefits to all the stakeholders in the ecosystem, enabling a more seamless experience for both the transacting parties. Recognising this potential value, in September 2016, India launched Bharat QR, which it called the world’s first fully interoperable QR code payments. Developed by the National Payments Corporation of India (NPCI) together with MasterCard and Visa, Bharat QR overcomes the limitations of closed loop QR code-based acceptance.

The interoperability of QR codes has opened up infinite possibilities for businesses and industries ranging from payments and banking, petroleum to manufacturing, transit and marketing strategy. A QR code creates a frictionless experience for the consumer and ensures that the transaction is secure, does not require physical contact and is completely transparent. These aspects are highly valuable for the customer.

According to the latest National Payments Corp. of India (NPCI) data, 1.62 billion transactions worth ₹2.98 trillion crore were recorded by the United Payments Interface (UPI), in August.  The jump in UPI could be driven by wider adoption of QR code based merchant payments. Additionally, QR codes are difficult to tamper with. As a result, chances of any kind of theft or fraud through this mode of payment are also minimal. The petroleum industry has taken great strides in enhancing user experience by leveraging QR codes as a payment option. QR codes are also increasingly being harnessed in the travel and transportation industry. Most metro systems across the world use a pre-loaded touch card at entry points for travellers to scan and process. This can be an expensive and cumbersome system for the management. Kochi Metro completed 3 years in June 2020 of introducing QR code based ticketing to address the concern of ’longer scanning time’. QR code system takes only 100 milliseconds to scan the code as compared to approximately 250 milliseconds taken by a touch card to scan. This not only makes ticketing contactless, but also faster. In a post Covid world, QR code ticketing will become the new normal as social distancing will continue to be practised.

When it comes to the payments industry, interoperability allows different payment infrastructure and financial service providers to facilitate payments between customers. Consequently, interoperability expands the reach of transaction accounts and retail payment instruments, making them more useful for end-users. Interestingly, this could also facilitate the delivery of additional digital financial services, such as savings, credit, insurance and even investment products.

ATMs are already leveraging QR codes to enable basic transactions like withdrawing/depositing money. In future, their scope could be expanded to include a wide variety of banking transactions and engagements. For instance, ‘Touchless’ or ‘Contactless’ ATM withdrawals using QR codes are now gaining popularity as it minimises the risk of spread of virus and also makes transactions faster & more secure. 

Digital transactional platforms that enable transfers, value storage and additional services can target the financially excluded and underserved through the use of QR codes. These efforts to deliver financial services to the last mile customer can leverage the expanded reach offered by interoperability to achieve even greater significance. Therefore, the interoperability of QR codes also enables a deeper reach and has the potential to further the government’s financial inclusion agenda. Considering that QR codes are interoperable with UPI apps as well, they also enable peer-to-peer transactions. For example, since the BHIM app can include bank account details of various banks, individuals can simply scan the QR code to transact amongst each other. 

In today’s world, a large part of information gathering and consumption has migrated to the digital world. Businesses need to speak the digital language and interact more frequently with their customers if they are to stay ahead of the curve. Since QR codes successfully bridge the gap between the physical and digital worlds, they have huge potential in marketing strategy. From putting QR codes on billboards, magazines and web pages to even printing them on leaflets, businesses are discovering that QR codes might be the most optimal way to provide potential customers information about their product and initiate a call to action. The fact that it is interoperable only amplifies this benefit as it allows multiple participants to transact on a single platform.

In the field of technology, interoperability acts like a springboard from which businesses can take off and explore further possibilities. QR codes bring a lot of value in terms of allowing businesses and people to transact seamlessly and in a cost efficient manner. Interoperability only further enhances that value.

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