Paytm is launching an aggressive nationwide campaign to promote QR code as the dominant form of acceptance of payments using either unified payments interface (UPI) or debit cards at zero cost. The move comes in the wake of the government decision to subsidise the charges on debit card payments that are usually borne by small merchants and is reminiscent of Paytm’s post-demonetisation campaign to acquire merchants for e-wallet payments.
Paytm COO Kiran Vasireddy said, “We have been working for several months to see how we can enable all payment instruments in one QR code. Going forward, we expect most merchants to accept payments directly into their bank accounts.”
The government decision on subsidising merchant discount rate (MDR, or the charges paid by shops on card payments) has provided the payments company an opportunity to replicate Alipay’s success in China of making QR codes the dominant mode of retail payments.
Paytm currently has 55 lakh shops accepting payments from its e-wallet. The company has budgeted Rs 500 crore to promote UPI payments among merchants and is deploying a team of 10,000 sales agents to tell shops about the advantages of UPI, which include zero charges and no monthly limits on the amount that can be accepted.
“From a transaction perspective, nothing much changes. While the user scans the same QR code, she will now get two-three options (e-wallet, account and debit card) and can choose the payment instrument. It does not add to the number of steps as the same screen will have multiple options,” said Vasireddy.
According to Vasireddy, Paytm plans to enrol 1 crore shops by April. He added that while technically a credit card can be added as a payment option within the app, the transaction costs were high. “Our UPI payments are growing very strong and very soon we will topple Tez in terms of number of transactions.” Tez is Google’s UPI application which currently dominates the UPI space.