Our PM Narendra Modi announced a new app of digital payments called BHIM based on the Unified Interface Payments Interface (UPI). The app is currently only available on Android; So that user’s iOS, Windows Mobile, etc. are left out. BHIM is also supposed to support payments based on Aadhaar, where transactions will be possible just with a fingerprint impression, but this facility is still to be deployed. Download here.
So, what can the BHIM app do?
BHIM is a digital payment solution application based on the Unified Payment Interface (UPI) of the National Payments Corporation of India (NPCI). If you have subscribed to UPI-based payments in your respective bank account, which is also linked to your mobile number, you can use the BHIM app to perform digital transactions.
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Bhim App: How to use?
The BHIM app will allow you to send and receive money to other non-UPI accounts or addresses. You can also send money via the IFSC and MMID code to users who do not have a UPI bank account. Also, there is the ability to scan a QR code and make a direct payment. Users can create their QR code for a fixed amount of money; then the trader can scan it, and the deduction will be made.
So the BHIM app is like another mobile wallet?
No, the BHIM application is not a mobile wallet. In the case of mobile portfolios such as Paytm or MobiKwik. You store a limited amount of money on the app, which can only be sent to someone who uses the same wallet. So if I have a Paytm account, it will not be possible for me to send money to someone on MobiKwik.
But BHIM is based on UPI, which is the universal interface of payments and therefore linked directly to a bank account. Your friend, relative or even a merchant that you are trying to pay does not necessarily need to be on the BHIM app. All they need is a bank account to receive payment.
If they have UPI enabled, you can simply ask for their VPA or virtual payment address, and just make a payment to that account. For example, if I have a VPA to SBI that could be called shrutid @ SBI, then I can just send my friend this little information and he/she can transfer it directly from BHIM. Otherwise, there is the IFSC or MMID code option to send/receive money.
The advantage is that I do not need to remember my account number or share this with anyone. This VPA is all that is required 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.
See here Which banks are supported by the BHIM app?
Does BHIM work exactly? How many accounts can I link to the BHIM app to make payments?
BHIM allows you to choose your preferred bank after checking your mobile number. The application sends an SMS via the SIM card of your phone. It is, therefore, preferable that your phone has the same cell phone number as that associated with a bank account.
Make sure there is enough balance so that BHIM can send an SMS. In our case, we had some cases of device link failure, but after some testing, the app was synchronized in one of the phones. The application will ask you to define a password (4 digits) that you can choose. Keep something that you do not forget easily because you will need the code each time you open the application and authenticate the transaction.
Your friend, relative or even a merchant that you are trying to pay does not necessarily need to be on the BHIM app.
Once this is done, the application will prompt you to select from the relevant bank. Choose your bank, if the UPI is enabled, it will reflect the corresponding account number, and you will see an option to send money, receive money, share via the IFSC code.
If UPI is not enabled, you can just put six digits of your debit card and expiration date. You then create a UPI pin. Once completed, the application will allow you to perform the necessary functions.
Then click on send money. Enter the mobile phone number or VPA address of the bank. It will also check the user to whom you are sending the money. Enter the amount and receive the compensation. You will need to enter your UPI pin to authenticate the transaction.
BHIM also has transfer options via IFSC, MMID as well as non-UPI banks.
If your friend does not have UPI, in addition to the option to send money, you will see three points. Press this button and the ACCOUNT + IFSC option will open. Put in the details out there, and you will be able to transfer money.
The problem is that if your mobile phone number is linked to two accounts, you can only access one for now. If you want to change, you must deactivate the selection and return to the bank selection option. To transfer money, you just need your friend or even mobile number from the merchant or VPA they should be able to give if they have a UPI account.
Ok, so what is this UPI and how can I check if my bank supports it?
According to the NPCI website, UPI came into service in August 2016, and the list of banks offering apps on Google Play Store looked like this.: Andhra Bank, Axis Bank, Bank of Maharashtra, Bhartiya Mahila Bank, Canara Bank, Catholic Syrian Bank, Bank DCB, Federal Bank, ICICI Bank, Sahakari Bank TJSB, Eastern Bank of Commerce, Karnataka Bank, UCO Bank, Union Bank of India, National Bank of Punjab, South Indian Bank, Vijaya Bank and YES Bank.
The Android app of the HDFC bank also began to support UPI. Then, in November, the SBI support app to the UPI called SBI Pay became live. So far thirty apps have signed for UPI. Also, as Indian Express had noted in a report, “Five other public sector banks are still joining the UPI interface.” This is a problem because many people in India still have bank accounts in a PSU.
The other problem is that UPI-based payments only work on Android phones, which means that iOS users may forget to drive this kind of transactions.
How do I go about creating a VPA for UPI on the bank account?
First, you must have the relevant mobile banking app. Make sure your mobile number is linked to your bank account, then go to your bank’s official app from Google Play Store. Check the developer etc. before installation because you need to make sure that you do not upload a malicious or fake masquerading app as one of your banks. If you do not know what the right application is, check with the bank pretty much the same.
Once you have the application of a bank that supports payments based on UPI on Android, you will be able to find a tab regarding UPI payments. In this case, you can go and create a VPA, which is what will be used to conduct all UPI-based transactions. Keep VPA simple, so you do not forget it in the future; As we explained, VPA will look something like this Shruti @ icici or Shruti @ sbi, etc. according to the bank. Next, create a UPI pin as well for conducting future transactions.
Once your VPA is created, you will see the options to send, receive money or pay via QR scanning code. If you have more than one bank account with the same bank, you can also choose the one that will be the default account for transactions via UPI.
Essentially, this VPA is all you need to perform a transaction, no need to put a debit card when making payments to someone else. Even mobile wallets like Paytm accepting upload via UPI, and given the government wants to promote this, do not be surprised if more merchants start accepting UPI soon.
So what’s so special about BHIM then?
BHIM also has transfer options via IFSC, MMID as well as non-UPI banks. This also means that the government has decided to go with an app that will allow digital payments via UPI. Of course, until everyone starts to accept and activate UPI as payment method, BHIM will not be useful to the majority of people.
Let’s not forget that Apple/iOS users are 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.
Don’t forget to Download Bhim apk for Android.
In India, not everyone has a smartphone, and even most smartphone users face poor connectivity problems. From an infrastructure point of view, it is a still 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. Also, the Aadhaar-based payments part for BHIM is yet to full roll out.