The financial year 2017-18 has been a big success for the Bharat Interface for Money (BHIM) app. As per data from the National Payments Corporation of India (NPCI), the app has been used to facilitate 913 million transactions during the financial year ending 31 March 2018, with a value of Rs one trillion (Rs 100,000 crore). Developed by the NPCI, BHIM is available for Android and iOS, and facilitates digital payments using the UPI funds-transfer system. BHIM is believed to be the most popular app in India that facilitates UPI payments.
The app’s success can in particular be credited to demonetization, the Government of India policy directive issued in November 2016 that took a large chunk of Indian Rupee currency notes out of circulation. The aftermath of demonetization drove a large number of people to switch to digital transactions for payments, as cash was not easily available at ATMs or bank teller counters for many months after the move. For ease of transactions, a lot of users switched to using UPI, which allows instant fund transfers directly from one bank account to another. The system has been used as a way to make individual payments of relatively small value, as well as for merchant transactions at supported retailers.
Many banks offer UPI-based payment solutions through their apps, but BHIM has enjoyed greater success thanks to its universal usability with any supported bank and its accounts. The clean, easy interface and simplified security have also promoted its use. The app is developed by NPCI, a non-profit organization that is owned by a consortium of major banks, and is promoted by the Reserve Bank of India. Apart from developing BHIM and the UPI system it’s based on, NPCI has also developed the IMPS payment facilitation system that UPI is based on, and the RuPay system for domestic card technology. BHIM was rolled out on December 31 2016, soon after demonetization. UPI was rolled out April 11 2016, but gained widespread attention after demonetization.
BHIM competes, not only with the UPI-enabled apps of major banks in India, but also with other private companies that have developed similar apps. One of BHIM’s biggest competitors is Paytm, which recently integrated UPI on its own platform. Other key competitors of BHIM are PhonePe (owned by e-commerce giant Flipkart), Google Tez and WhatsApp, which has recently enabled UPI-based payments on its main chat app.
BHIM’s success is also largely thanks to NPCI being backed by the Government of India, and the consortium of banks that own the company, as this adds an inherent level of trust in the system that many private players may not be able to achieve. Additionally, the direct transfer of funds from account-to-account makes the system much more convenient to users over mobile wallets such as Paytm, which maintain funds as wallet balance that has limited spendability and liquidity.