BHIM needs Mbappé speed to improve track record

Unified Payments Interface (UPI) - BHIM which is the most commonly used digital payment mode and its usage is rising day by day. 

The government-owned UPI app BHIM,
or Bharat Interface for Money, is not keeping pace, ceding ground to non-state players. 

According to the National Payments Corporation of India (NPCI), which runs the BHIM app, its share was at the lowest since inception in terms of UPI transactions by value at 15% of the total in June.

NPCI figures show Rs 6,261 crore was transferred through the BHIM app out of Rs 41,000 crore through UPI. From around 42% of UPI transactions in September 2017, the share fell to 18% in April this year followed by 17% in May and 15% in June. The slide has been fastest since the end of 2017, when Paytm and Google Tez joined UPI. Such third-party applications as Phone-Pe, Paytm and Tez have captured a greater share of UPI transactions.

BHIM was launched in December 2016. Its share of number of transactions by volume declined to 6.6% in June from around 10% in October last year.

The Ministry of Electronics and IT (MeitY) said recently that cashback offers for merchants were withdrawn from July 1. Further, it also restricted cashback for retail users to new ones and reduced the threshold for this to Rs 150 from the total of more than Rs 500. Bankers said that this may further affect adoption of BHIM. NPCI did not respond to email queries.

“Looking at the recent trends on the application, being satisfied with the progress, the ministry has taken a call to suspend multiple cashback schemes and instead give Rs 150 as a standard cashback to first-time users of BHIM,” said a top official on condition of anonymity.

“BHIM has the biggest advantage of having the Prime Minister himself as the face of the product, which instills confidence in people new to digital payments,” said a top executive of a payments company that competes with BHIM. “BHIM can be an interesting stepping stone for consumers into UPI.”