Rudra Prasad Adhikari

QR Code, an abbreviated form of Quick Response Code, is a two-dimensional barcode that allows encoding of characters containing information about the item to which it is attached. In practice, QR codes often contain data for a locator, identifier, or tracker that points to a website or application. It is a machine-readable code consisting of black squares arranged in a square grid on a white background, which can be read by a camera and imaging devices like scanner and processed for appropriate interpretation. The required data is then extracted from the patterns that are present in both horizontal and vertical components of the image.

Easiest tool
Since QR codes contain more data, they allow for encryption that is useful for payment processing. When a payment is done by scanning QR code from a mobile app, then such payment is known as QR code payment. It is commonly known as Scan-To-Pay also. It performs electronic fund transfer without any physical contact of devices as used in card payment methods. So, it avoids a lot of infrastructures associated with traditional electronic payment methods like cards, swiping machines, network terminals, etc.
Nowadays merchants are revealing their QR code containing their own account details either in paper or screen. Such QR codes can be scanned directly from camera app in our iPhone or Android Smartphone using latest iOS or Android Software. The code is then recognised and relevant operation has to be carried out as per the instruction and notification to complete the transaction.
Also, the QR code scanning facility is directly available in our mobile banking app and digital wallets wherein our account information or fund resides. We can make instant payment directly from such apps using a secure network. We do not have to worry for the account details while depositing fund as we do in traditional payment methods.
QR Code Payment is regarded as the easiest means among other digital banking tools. It uses two types of codes: static and dynamic. Suppose, if a merchant is to be paid through a QR code, then the purchasing customer scans the QR code. After scanning the code, the name of the merchant and the bank account number appear on the customer's mobile screen.
If the merchant is given a static code from the bank, the money will go from the customer's account after typing the amount to be paid and entering the PIN number. If it is a dynamic code, the amount to be paid is also mentioned and the customer can send it after verification. The QR code now allows transactions up to Rs. 1000,000 per day and up to Rs. 1 million per month.
As it uses 2F authentication, QR code payment is supposed to be the most secure among the digital payment methods. There is real time transaction and have very less chance of disputed transaction in it. To acquire QR code for a business, a Permanent Account Number (PAN) and bank account are required. It is provided by banks, financial institutions and digital payment service providers like Fonepay.
QR code payment promotes financial inclusion, access and transparency. Even from small business owners such as rickshaw rider, tempo driver, fruit seller, teashop keeper, etc. to large business firms like marts, departmental stores and shopping complexes can be included under this payment system. Along with making the payments simple, secure and affordable, it aids the government in generating more revenues. It is one of the efficient tools for promoting digital economy in the country.

Increasing trend
The trend of using QR code payment is increasing day by day in Nepal. Due to the COVID-19 pandemic, people are shifting towards digital payment methods instead of making payment through cash or cheque. As per the latest reports of the Nepal Rastra bank (NRB), payments through QR codes increased by 43 per cent. Payment through QR code used 241,000 times in November which reached 343,000 times in December. Payments through this medium have also increased by about 34 per cent during the period. In the previous month, Rs. 930 million paid through the QR code increased to Rs. 1.25 billion in the later month.
Nepal needs new initiatives to make QR code payment extensive. Firstly, an easy availability of secure network should be ensured. Then, interoperability of QR codes should be managed to make sure the same QR code is accepted in all networks, for which the NRB that regulates the banks and financial institutions is going to issue Inter-Network Settlement Guidelines soon. Next, various promotional campaigns like on-the-spot QR code generation programmes, mobile camps in the market areas, etc. and offers on QR code payment like cash back, discount and so on can be provided to attract business owners and customers towards QR code payment.

(Adhikari is an IT professional working at Rastriya Banijya Bank.)