QR CODES: COMPULSORY TO IMPLEMENT UPI/BHARAT QR FROM 2022

Question 1

What is a QR code and when was it developed?

Answer 1

A QR (Quick Response) code is a two-dimensional barcode that stores data. It was originally developed in Japan in the 1990s.

Question 2

Name the three types of QR codes used for e-payment systems in India.

Answer 2

Proprietary QR code
UPI QR code
Bharat QR code

Question 3

Describe the key difference between a proprietary QR code and a UPI / Bharat QR code.

Answer 3

Proprietary QR codes are designed specifically for a single payment app (like Paytm). UPI and Bharat QR codes are interoperable, meaning they can be used by any UPI-based app.

Question 4

Why did the RBI mandate the use of UPI and Bharat QR codes?

Answer 4

The RBI mandated the use of these QR codes to promote interoperability. This means that customers can use any UPI app to pay at a merchant that displays a UPI or Bharat QR code, without needing a specific vendor’s app.

Question 5

What is UPI?

Answer 5

UPI stands for Unified Payments Interface. It’s a system in India that allows instant, real-time money transfers between bank accounts using a mobile app.

Question 6

Why has the RBI prohibited the creation of new proprietary QR codes?

Answer 6

The RBI likely prohibited proprietary QR codes to reduce market fragmentation and promote seamless payment experiences for users. Interoperable systems like UPI/Bharat QR enhance convenience and break down barriers between payment providers.

Question 7

What is the role of the NPCI in relation to Bharat QR?

Answer 7

The NPCI (National Payments Corporation of India) developed the Bharat QR code in collaboration with Visa and Mastercard. The NPCI is responsible for governing UPI and other digital payment systems in India.

Question 8

Besides ‘interoperability’, list two other potential benefits of the RBI’s mandate for UPI/ Bharat QR implementation.

Answer 8

Increased competition: Promotes competition among payment providers, potentially leading to better fees and services for consumers.
Financial inclusion: Interoperable QR codes can help reach wider populations, especially in rural areas, making digital payments accessible to more people and businesses.

Question 9

Give an example of how a customer and a merchant would interact using a UPI QR code.

Answer 9

The merchant displays their UPI QR code at their store.
The customer opens their UPI app and scans the QR code.
The customer enters the amount to be paid and confirms the transaction.
The money is instantly transferred from the customer’s bank account to the merchant’s account.

Question 10

What is an rMQR code?

Answer 10

An rMQR code (Rectangular Micro QR Code) is a variation of the standard QR code that features a rectangular shape. This design offers more flexibility for printing in narrow spaces and on curved surfaces.

Question 11

Who invented the original QR code and what is their current project?

Answer 11

Japanese engineer Masahiro Hara invented the original square QR code in the 1990s. He is now working on developing and promoting the rMQR code.

Question 12

What is a key advantage of rMQR codes over traditional square QR codes?

Answer 12

rMQR codes can be printed effectively in narrow spaces where a traditional square QR code might not fit comfortably.

Question 13

How does the scanning speed of an rMQR code compare to a standard QR code?

Answer 13

rMQR codes are designed to have the same scanning speed as normal square-shaped QR codes, ensuring no difference in user experience.

Question 14

What is the main storage feature of a magnetic stripe card?

Answer 14

A magnetic stripe on the back of the card.

Question 15

Describe how an EMV chip works.

Answer 15

It contains a microchip that stores encrypted information and generates a unique code for each transaction.

Question 16

What is chip encryption in EMV cards?

Answer 16

EMV cards contain a microchip that stores encrypted data. This encryption scrambles the card information using complex algorithms, making it extremely difficult for criminals to steal or decipher even if they intercept the data.

Question 17

How does dynamic authentication work in EMV cards?

Answer 17

During each transaction, a unique code is generated that combines the card information with a random number. This code is only valid for that specific transaction, making it useless for future fraudulent attempts. Even if stolen, the data cannot be used to create counterfeit cards.

Question 18

What is the primary security advantage of EMV cards over magnetic stripe cards?

Answer 18

EMV cards use chip encryption and dynamic authentication. This makes them significantly harder to counterfeit and helps reduce fraud compared to magnetic stripe cards, which have static, easily duplicated data.

Question 19

What is skimming, and how does it affect magnetic stripe cards?

Answer 19

Skimming is the act of copying card data using a skimming device, allowing for fraudulent card duplication. Magnetic stripe cards are very vulnerable to this.

Question 20

Why are magnetic stripe cards considered less secure in the event of a data breach?

Answer 20

The data on a magnetic stripe is static. If a merchant’s system is compromised, this data can be stolen and used for fraudulent transactions.

Question 21

Is it easy to counterfeit magnetic stripe cards?

Answer 21

Yes, relatively easy with the right equipment compared to the complexity of counterfeiting EMV chips.

Question 22

Explain the Chip and PIN EMV transaction process.

Answer 22

The card is inserted into a terminal, and the customer enters their PIN to authorize the transaction.

Question 23

What does ODA stand for, and how does it benefit EMV cards?

Answer 23

Offline Data Authentication – Some EMV cards can be verified without a real-time network connection, making transactions possible in areas with limited connectivity.

Question 24

What are EMV Cards?

Answer 24

EMV cards (also known as chip cards) contain an embedded microchip that stores encrypted payment data.
They provide significantly enhanced security compared to traditional magnetic stripe cards.
EMV stands for Europay, Mastercard, and Visa – the companies that developed the standard.

Question 25

How do contactless EMV payments work?

Answer 25

Contactless EMV cards incorporate RFID (Radio Frequency Identification) technology.
When held near a compatible contactless terminal, the card’s chip wirelessly transmits encrypted payment information using short-range radio waves.
This enables transactions without needing to insert the card – just tap and go!

Question 26

How do contact-based EMV transactions work?

Answer 26

These transactions require physically inserting the EMV card into a chip-enabled PoS (Point of Sale) terminal.
The terminal reads the encrypted data from the chip.
The customer may need to enter a PIN or sign to authorize the payment.