Pay with DuitNow - Malaysian QR payment

Overview

Adoption of new technology, innovation and digitization, the payment ecosystem has forced financial institutions to provide cost-effective, faster, and more convenient services to improve customer experience. 

Payments Network Malaysia (PayNet), The national payments network introduces ‘DuitNow’ QR payment, under Malaysia’s Real-Time Payments Platform (RPP) to start building the foundation of a digital payment ecosystem in Malaysia.

Further to promote cashless real-time payment and encourage the use of digital fund transfer, RPP emphasizes the progressive introduction of multiple new payment products, for multiple payment purposes. Besides QR Payments, Request-to-Pay, e-Mandates, and Real-Time Debit are also launched and expected to transform the payments landscape in Malaysia. However, this document is restricted to ‘DuitNow’ QR service and will cover other services in the future.

What is “DuitNow” QR service?

‘DuitNow’ QR is an overlay service for Real-Time Retail Payments Platform (RPP) Participants. This Convenient, efficient and secured instant credit transfer service, enables the customer to scan a QR code to pay a merchant or to another person and  also customer is capable to receive funds by presenting their own DuitNow QR for scanning. Consumers can make payments from participating Banks or e-wallets mobile applications up to RM 50,000 per transaction and businesses may pay up to RM 10,000,000 per transaction at banks. The limit varies depending on the bank and eMoney providers will have lower limits.
DuitNow QR is Malaysia’s National Standard Quick Response (QR) which was established by PayNet under the Bank Negara Malaysia (BNM), Interoperable Credit Transfer Framework (ICTF).

How does it work? 

PayNet has onboarded banks and eWallet providers to enable customers to initiate payment by using the mobile app of their choice. Customers can download the Issuer bank or service provider’s mobile app on their mobile. The application is capable to scan merchant QR codes and initiate payment. QR code implementation follows the ISO 20022 messaging standard for core payment processing and communication in the financial ecosystem.

‘DuitNow’ QR business scenarios

The QR code can be presented by a Merchant or other user in Peer to Peer payment. 
To elaborate the business flow, consider a merchant presented QR Code payment, which enables the customer to make payment for their purchases. The customer scan ‘DuitNow’ QR code of the merchant, key all the required information and submit the request. On confirmation of the payment, the Credit transfer request directs the issuer bank that holds the debtor account and funds will be automatically debited from the Customer (Debtor) account. Bank then sends the credit transfer request to Creditor bank routing via PayNet. Post successful verification in Creditor bank, the funds will be credited instantly to the Merchant (Creditor) account. 

Model layout with simple steps in ‘DuitNow’ QR payment explained for below scenarios:

• Point-of-sales (POS) payments to Merchants
• Person-to-person (P2P) payments

Inquiry flow:

1. Customer scans a merchant’s QR code via the Mobile application and initiates a QR Payment request.
2. OFI receives the QR Account Enquiry Request (pacs.008) channel.
3. OFI validates the received pacs.008.
4. On successful processing, OFI sends the QR Account Enquiry Request (pacs.008) to PayNet.
5. On receiving pacs.008, PayNet performs validation of the transaction.
6. On successful processing, PayNet sends the QR Account Enquiry Request (pacs.008) to RFI.
7. RFI receives the QR Account Enquiry Request (pacs.008) from PayNet.
8. RFI performs validation on received pacs.008 and performs Account inquiry
9. On successful Account enquiry, RFI sends the QR Account Enquiry positive response (pacs.002) back to ‘PayNet’ with 
10. PayNet will validate the received positive response notification (pacs.002) and send to OFI bank.
11. OFI receives the response notification (pacs.002).
12. OFI validates the received pacs.002 and reconciled with original pacs.008
13. On successful processing of all the above checks, OFI sends back the response notification (pacs.002) to initiating Channel.

Credit Transfer flow:

1. Once Account Enquiry is completed then, the Customer is asked to follow a few details like 
2. Verify the merchant’s name (displayed on screen)
3. Enter Payment amount
4. Keep any other details like promo code or purpose etc.
5. Customer confirms the details in the mobile application.
6. Then OFI validates all the payment information and performs Debit Posting (Debit the customer account)
7. On successful Debit posting, OFI sends the QR Credit Transfer Request (pacs.008) to PayNet.
8. Once PayNet receives pacs.008 validates the message and sends it to RFI.
9. RFI receives the QR Credit Transfer Request (pacs.008) from PayNet.
10. RFI performs required validations and perform Credit Posting (Credit customer)
11. RFI generates the QR Credit Transfer Response (pacs.002) back to PayNet.
12. On successful credit posting, RFI may notify Merchant on successful QR Payment status via camt.054 (debit credit notification).
13. PayNet validates and sends the QR Credit Transfer Response (pacs.002) to OFI.
14. OFI receives the QR Request Notification (pacs.002).
15. OFI performs validation of the received pacs.002 and reconciles with received pacs.008
16. Post successful processing of pacs.002, OFI submits the QR Notification message (pacs.002) to Initiating Channel.

Message types for Merchant presented QR:

The Merchant Presented QR Payment solution is based on the rules and constraints specified in the PayNet RPP Specifications and on the UNIFI (ISO20022) Payments as well as Industry Standard Messages for Credit Transfers and network and system notification messages respectively. Specific messages and unique transaction types signify different services.

QR Code and QR ID

QR Code

A Quick Response Code is a popular type of two-dimensional barcode. This encrypted data is used in payment processing and can store around 5k alphanumeric characters. However, all QR codes generated should comply with PayNet. To read the QR Code, customers should use a scanning application on their smartphone.

Characteristics of QR Code

Types of QR codes used:

Dynamic QR:  

A QR Code that is generated by a Merchant or Recipient for every new transaction.

A Dynamic QR code has a short URL that can be automatically redirected at any time to any site.

Due to the above points metrics like location, used device type etc can be tracked.

Static QR:

QR code has fixed information encoded into the code itself. Data cannot be changed with this QR code.

Scan performance cannot be tracked, limiting scalability.

QR Identifier or QR ID

QR Identifier or QR ID: An alphanumeric code uniquely identifying either a merchant or recipient for the purpose of routing proceeds to the designated merchants or recipient’s Account.