Paytm has started testing white-labelled interoperable Unified Payments Interface (UPI) QR Code for merchants in Bengaluru and Hyderabad. Sources indicate that interoperable QR code is a white label solution without Paytm’s branding.
The UPI-based interoperable QR code will allow users to pay merchants by scanning any QR code. For an instance, if you are a Paytm user while merchant has a MobiKwik or PhonePe QR code sticker, you can still pay by scanning it.
“Paytm Payments Bank has given its handle for the interoperable UPI QR code option,” confirmed two sources on condition of anonymity. It’s surprising that Paytm has not been doing this by itself and relying on a white label solution instead.
“Actually, Paytm doesn’t want to hamper its wallet business and this is the rationale for relying on a white label solution,” outlined the above sources. Entrackr has reached out to Paytm for more details about the soft launch of the interoperable QR code. However, the company declined to comment.
Currently, BharatPe and PhonePe allow interoperability for merchant payments on UPI. According to industry sources, Delhi-based BharatPe does about 100,000 transactions a day while PhonePe processes about 25,000 transactions on a daily basis.
Meanwhile, wallet interoperability is available for users with full KYC. Reserve Bank of India (RBI) had clarified in a notification that Prepaid Payment Instrument (PPI) issuers to adhere to all security guidelines framed by the National Payments Corporation of India for UPI and card networks for merchant onboarding.
Introduction of Unified Payments Interface (UPI) QR Code interoperability is undoubtedly a welcome move by the Alibaba-backed company. Using a white label solution by the company for the same is intriguing and raises questions – why the company is not doing this under its own branding?
Nevertheless, as industry sources point out that the Noida-based firm resorted to this strategy as it does not want to lose merchants payment happening on the wallet front.
Going forward, it would be interesting to watch how Paytm scales up its QR code interoperability feature while keeping merchant base intact to its core wallet business.