BHIM UPI a turnaround success, records 145 million UPI transactions

Prime Minister Narendra Modi’s recently launched BHIM app, a digital payments solution app based on the Unified Payments Interface (UPI) has become a success and attracted 145 million UPI transactions in December 2017, according to NPCI.

Talking about the app, BHIM is based on Unified Payments Interface (UPI) from the National Payments Corporation of India (NPCI). If a user has signed up for UPI based payments on their respective bank account, which is also linked to his/ her mobile number, then he/ she will be able to use the BHIM app to conduct digital transactions.

 According to the report, since its launch the transactions are increasing rapidly as more e-commerce players and banks are rolling out their UPI interface.

BHIM app will let users send and receive money to other non-UPI accounts or addresses. Users who don’t have a UPI-based bank account can also send money via IFSC and MMID code to users. Additionally, there’s the option of scanning a QR code and making a direct payment. Users can create their own QR code for a certain fixed amount of money, and then the merchant can scan it and the deduction will be made.

 The app is currently available only on Android; so iOS, Windows mobile users are still left out. BHIM is also supposed to support Aadhaar-based payments, where transactions will be possible just with a fingerprint impression, but that facility is yet to roll out.

Is BHIM different from other mobile wallets?

As the BHIM app hits the headlines with its 145 million UPI transactions recorded in December 2017, it has also sparked confusion among the users about how it is different from other mobile wallets.

To get a more clarity on this, let's further read what makes BHIM different from others, BHIM is based on Unified Payments Interface (UPI) from the National Payments Corporation of India (NPCI)  and let users send and receive money to other non-UPI accounts or addresses.

BHIM is linked directly to a bank account. The user’s friend, relative or even a merchant who he is trying to pay doesn’t necessarily need to be on the BHIM app. All they need to have is a bank account to receive the payment. Hence, this makes it different from other mobile wallets. Furthermore, if the user has UPI activated, they can just ask for his VPA or virtual payment address, and can make a payment to that account. The advantage is the user does not necessarily have to remember his account number or share that with everyone. This VPA is all that is needed to transfer funds. A maximum of Rs 10,000 can be shared per transaction, and a total of Rs 20,000 can be sent within 24 hours.

BHIM also has options to transfer via IFSC, MMID as well for non-UPI banks. It also means the government has decided to go with one app that will enable digital payments via UPI. The app lets users choose their preferred bank after it has verified the user's mobile number.  Banks namely Allahabad Bank, Andhra Bank, Axis Bank, Bank of Baroda, Bank of Maharashtra, Canara Bank, Catholic Syrian Bank, Central Bank of India, DCB Bank, Dena Bank, Federal Bank, HDFC Bank, ICICI Bank,  etc support BHIM app for UPI-based payments. 

However, in spite of these developments, there is still a long way to go. Apple iOS users are still out of this system for now, and that is a significant set of affluent users, who are likely doing a lot more digital transactions than Android folks. It also means even if most merchants accept UPI, a user will still need a smartphone, internet connectivity etc to conduct transactions and in India,not everyone has a smartphone, and even if they own a smartphone, users still face poor connectivity problems. Until everyone starts accepting and activating UPI as a payment method, BHIM won’t be of use to a majority of people. From an infrastructure point of view, it is still a long way to go before BHIM becomes the default app for India’s 1 billion plus population. For now BHIM is another app to facilitate digital payments. 

According to a newspaper’s report “five other public sector banks are yet to join the UPI interface.” This is an issue because many people in India still have bank accounts in a PSU bank. Also the Aadhaar-based payments part for BHIM is yet to fully roll out.

Tags: BHIM, BHIM app, BHIM UPI, Prime Minister Narendra Modi, digital payments solution app, Unified Payments Interface, upi, National Payments Corporation of India, npci, UPI interface, mobile wallets