The case for network-level interoperability of QR codes in India’s digital payments ecosystem

India has achieved unprecedented success in digital payments, largely propelled by the Unified Payments Interface (UPI) and the widespread adoption of quick response (QR) code-based merchant payments. This paper analyses the unique factors driving UPI’s growth — including its user-centric design, regulatory flexibility, zero merchant discount rate (MDR) policy and the proliferation of asset-light QR infrastructure. However, despite this remarkable progress, a crucial challenge persists: the lack of network-level interoperability in UPI QR codes. This structural limitation has led to systemic concentration, exposure to network outages and inconsistencies in merchant onboarding, all of which constrain further financial inclusion and undermine the resilience of the digital payments ecosystem. Drawing lessons from successful QR interoperability models such as Singapore Quick Response code, Malaysia’s DuitNow QR and Indonesia’s efforts to enhance the Quick Response Code Indonesian Standard, this paper argues that true scheme- and network-level interoperability is not merely a technical upgrade but a strategic necessity. It would expand consumer choice, enhance merchant acceptance while reducing costs, strengthen system-wide resilience and foster inclusive innovation. The paper also highlights the crucial role of banks in the acceptance ecosystem and emphasises that their continued engagement is essential for achieving economies of scale, sustainable revenue models and infrastructure resiliency. We propose a road map of important policy actions, including the establishment of a unified QR code standard, mandatory network-level interoperability, infrastructure modernisation, scheme-agnostic security frameworks and enhanced regulatory oversight. The paper also recommends that the Reserve Bank of India urgently reconsider the licensing of new umbrella entities (NUEs) to mitigate the overall concentration risk in India’s digital payment ecosystem. While acknowledging implementation challenges, the paper contends that India must act decisively to address existing gaps and evolve towards a more inclusive, competitive and future-ready digital payments architecture. These insights also hold important lessons for other countries building similar ecosystems, underscoring the importance of designing QR-based acceptance infrastructure with interoperability and public interest at the core. This article is also included in The Business & Management Collection which can be accessed at https://hstalks.com/business/.