Paytm should be worried as HDFC bank unveils its QR code payment method

HDFC bank, in a bid to get benefitted by the government’s push to cashless economy, has drawn up ambitious plans for QR code based payments - a model popularised by Paytm - as IndiaQR kicks off.

IndiaQR - a "scan and pay" facility will be unveiled for small shops and traders that do not have the volumes to justify deploying a card swipe machine.

The bank has appointed payment tech company In-Solutions Global (ISG) to provide an end-to-end merchant acquiring platform.

Unlike Paytm’s QR code, IndiaQR funds are transferred from the customer's bank account to the merchant's bank account irrespective of the bank.

Charges of 25 basis points have been prescribed by the RBI for debit card transactions up to Rs 1,000 and 50bps for transactions between Rs 1,000 and Rs 2,000 up to March 31, 2017.

IndiaQR code is open for all banks. But the industry attention is on HDFC Bank, whose merchants account for bulk of card transactions in the country. HDFC Bank has also been the most dominant user of mVisa (a proprietary QR code of Visa which will now be replaced by the "open loop" IndiaQR.