As part of the ongoing push for wider acceptance of digital payments in the country, Prime Minister Narendra Modi announced the launch of the BHIM app. The PM says the app is named after Bhimrao Ambedkar and the acronym BHIM also expands to Bharat Interface for Money. (You can download the BHIM app for Android from here)
The BHIM app has been developed by the National Payment Corporation of India (NPCI) and is part of Unified Payment Interface (UPI). NCPI says the app is interoperable with other UPI application from other banks. It will be available for newer versions of Android and iOS devices.
The neat, clean and simple interface of the BHIM app is a welcome departure from other apps from the government. This is in tune with its stated purpose of simplified payments.
How to Use the BHIM app
To make use of BHIM app you will need to have an account with any of the 32 banks that currently support the app (list of banks at the end of the post). The app is currently available only in English and Hindi. Given the wide diversity of languages in India, more languages are expected to be added soon. Also the phone number you use for the app needs to be associated with your bank account. At the moment it allows only one phone number and bank account to be linked with the app at a time. However, there exists an option to change accounts.
Unlike many other apps BHIM doesn’t need a plethora of permissions from the user. It asks for access to SMS (to verify mobile number) and to make and manage phone calls (they say they need it to verify your phone with UPI). And in case you want to scan a QR code, it will ask for an additional permission to access the camera.
Unlike many other apps, this app doesn’t fetch a verification code from an incoming SMS, but instead sends out an SMS for phone number verification. For some users this is confusing as they keep on waiting for a verification SMS.
For users who already have set up their UPI accounts it will automatically connect the app with the bank account, for others, the app lets the user choose one from the list of participating banks and then they need to set up their UPI pin.
This includes a dual-layer of security with a passcode in addition to the UPI PIN. But chances are many users will end up choosing the same number for both. The UPI PIN can be easily created/reset from the screen that appears on clicking the bank logo on the home screen. But even within this simple interface, I couldn’t locate an option that will let me change the passcode.
Payments can be made to a mobile number or an UPI address. The default is mobile-number@upi (for example 99XXXXXX00@upi) and the app also allows users to choose a custom payment address such as yourname@upi. And like most usernames, it is first-come-first-serve.
The Glitches
However, in our tests we found that while money sent to UPI addresses with a mobile number worked seamlessly, all attempts to transact with a custom UPI address couldn’t get through. Also the transactions don’t happen as fast as they claim to.
BHIM is not only to make payments but to receive them too. It also lets users generate QR codes (quite like the ones that we see merchants accepting Paym put up) by scanning other can send them payments.
It also includes a feature to request payments from others stating the amount requested and with an expiry date for the request. Requests can also be saved for the future.
Should Paytm be Afraid of BHIM?
This no-frills payments app could pose a challenge to other payment services such as Paytm. BHIM promises to be cross platform allowing users to pay to other who are not on UPI. Also the transaction limits (maximum of Rs 10,000 per transaction and Rs 20,000 within 24 hours) are more flexible than that for the other apps.
BHIM’s big advantage is that it is government backed and the money is transferred directly from bank account to bank account without an intermediary.
The Paytms, the MobiKwiks, the FreeCharges give benefits such as cashback which BHIM doesn’t and this little advantage could help them stay in the game.
While the BHIM app is free, all transactions aren’t. Banks might levy a small fee in the form of UPI or IMPS transfer fee, depending on the transaction made.
Even though for an app that has just been launched, some of the processes – such as verifying an user or making a payment – took us much longer than expected. Also the lack of on-screen confirmations confuses. All messaging happens as notifications, which adds additional steps and also increases the chances of a users failing to notice them.
This are early days for the app and more features and improvements are expected soon.
The USP of the app is its simplicity and it might make cashless payments more appealing for more people if the little creases are ironed out soon.
List of banks on BHIM: Allahabad Bank, Andhra Bank, Axis Bank, Bank of Baroda, Bank of India, Bank of Maharashtra, Canara Bank, Catholic Syrian Bank, Central Bank of India, DCB Bank, Dena Bank, Federal Bank, HDFC Bank, ICICI Bank, IDBI Bank, IDFC Bank, Indian Bank, Indian Overseas Bank, IndusInd Bank, Karnataka Bank, Karur Vysya Bank, Kotak Mahindra Bank, Oriental Bank of Commerce, Punjab National Bank, RBL Bank, South Indian Bank, Standard Chartered Bank, State Bank of India, Syndicate Bank, Union Bank of India, United Bank of India, Vijaya Bank.