BHIM – The Way Forward After the Cash Ban


Bharat Interface for Money is an attempt to push forward the digitization of payments after the much cribbed event of 2016- the demonitization of our very own 500 and 100 rupees notes. This, as the Modi government claims is “The treasury of the poor to digital payments”. As the Prime Minister envisions this step is an attempt to digitalize the payment structure of even the small businesses and that too in a very short span of time.

The app is currently available for the Android users leaving the IOS and Windows users waiting. Given the current mass usage of Android operating system by some of the small traders as compared to the other two OS the Prime Minister’s vision seems to have drawn the point home.

What is BHIM?

The app is an attempt to digitalize your everyday payment hassles and is a step ahead from the wallets! The application is based on the Unified Payments Interface (UPI) and is developed by the National Payments Corporation of India (NPCI). The app supports those bank accounts that are currently live on UPI platforms. Thus, if you have signed up for UPI based payments on your bank account which is also linked to your mobile number you will be able to use the BHIM app on the go.

What to look out for?

The app like many others is user friendly, lets you make payments and receive money. This feature is extended to non-UPI accounts or addresses.

In case of a non-UPI based bank account money can be sent through IFSC and MMID code to users.

The users of the app can also scan the QR code and make a direct payment to merchants. It also lets you create your own QR code for a fixed amount of money which the merchants can scan and receive the payments.

This is a step ahead from the other payment apps. Because BHIM is based on Unified Payments Interface it allows the user to make transactions between two bank accounts leaving behind the hassle of downloading of the app by both the parties. It thus also breaks the barrier of saving a limited amount of money in your mobile wallets such as Paytm and Mobiwik.

The payment process can be further shortened by creating a Virtual Payment Address by the user. This address can be shared with others in case a transaction has to be made. This saves the users from remembering the long bank account numbers and that need not to be shared with others.

How can you create a UPI or VPA on your bank account?

You first need to download your bank’s official app. In doing this you need to ensure the credibility and the official status of the app so that you do not download any other malicious app, make sure your mobile number is linked with your account and also your bank should be live on the UPI platform.

Once the app is downloaded, open it locate the tab regarding UPI payments. In this the VPA can be made. Try to keep it simple as it will help you make future transactions. The VPA will be something like nidhi@sbi depending on the bank. A UPI pin also needs to be created for conducting future transactions. Once your VPA is created you will get options to send, receive money or pay via scanning the QR code. This does not require the user to put in debit card details on every transaction.

Where the app seems to lack its vigour?

The app presently allows only one bank account to be linked with the app. At the time of account set-up your preferred bank account can be linked as the default account. In order to change the bank account, go to the main menu, choose bank accounts and select your default account.

At the time of registration you need to put in your debit card details and with the help of your mobile number the app will fetch your bank account details. However, this creates a security flaw in case the mobile gets lost with the app logged in, the person who finds the phone can create a new 4 digit pin by verifying the phone number.

From the infrastructure point of view the app creates a requirement for a smart phone and internet connectivity. For a country like India, it may take a little longer before the BHIM becomes the default payment option of many of the small merchants as unavailability of smart phones and poor or non-existent internet connectivity in many areas of the country still remains a major feat to be achieved.


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