Prime Minister Narendra Modi introduced BHIM (Bharat Interface for Money) to the entire nation as a new year’s gift. While it is a remarkable feat to drive digital payments, citizens are yet to understand what exactly it is and why is it important.
For those who are already aware of UPI (United Payments Interface), the easiest way to understand BHIM is by seeing it as our government’s very own version of Paytm, which is developed by National Payments Corporation of India (NPCI)—the umbrella organisation for all retail payments system in the country.
BHIM vs UPI apps
UPI is the platform while BHIM is a separate mobile wallet app, similar to Paytm, Mobikwik, Freecharge and others. The UPI platform has already enabled all major banks to offer the services that BHIM is now offering. However, for different banks, you will need to use separate UPI apps and VPAs (Virtual Payment Address), similar to unique email IDs.
So, if you have two accounts in ICICI and HDFC respectively, to enable UPI transactions on both the accounts, you will have to use separate UPI apps of ICICI and HDFC and generate unique VPAs.
For example, if your name is Asish, you have to get ‘asish@icici’ and ‘asish@hdfcbank’ as VPAs to transact between the ICICI and HDFC accounts instantly.
Coming to the BHIM app, it’s a unified app based on UPI which can be synced to any of the UPI-enabled bank accounts. However, only one UPI-enabled account can be added to BHIM and not multiple. There is an option to change accounts.
The BHIM app offers a very simple user interface and most importantly it enables users to create a VPA with a verified mobile number. For example, with BHIM you can get a VPA like ‘9900000000@UPI’.
In reality, the BHIM app is an improved version of the existing bank UPI apps. The BHIM app offers the ease that other mobile wallets offer. This is something which existing UPI bank apps do not.
BHIM vs Paytm-like mobile wallets: The big difference
The BHIM app gives serious competition to existing mobile wallets. Given that it is directly synced to the bank account and is made by NPCI, the BHIM app will obviously appear as a more reliable option to the citizens.
While BHIM has all the benefits provided by other mobile wallets, the one big advantage is that the transactions happen directly from the bank accounts and there are no charges associated with transfers.
So, you will not have to recharge your BHIM wallet and of course, no commissions, hidden charges are involved.
One big challenge for BHIM
BHIM has the potential to demolish private mobile wallets. However, the biggest challenge for NPCI would be to spread the word about BHIM and get merchants on board. Unless BHIM is accepted at physical stores, public transport, etc, BHIM, as well as UPI, will find it difficult to make an impact.
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.