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BHIM UPI goes international

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BHIM UPI goes international


What to study?

For Prelims: About UPI, BHIM and NPCI.

For Mains: Cashless economy- need, significance, challenges and role of BHIM in furthering this.


Context: BHIM app has gone international with a pilot demo of BHIM UPI QR- based payments beginning at the ongoing Singapore FinTech Festival 2019.

  • This QR code-based system would allow anyone with a BHIM app to scan the SGQR at NETS terminals for payments in Singapore.
  • The project is being jointly developed by NPCI and NETS of Singapore. It is targeted to go live by Feb 2020.


What is BHIM?

Bharat Interface for Money (BHIM) is a UPI based payment interface.

  • Developed by National Payments Corporation of India (NPCI).
  • Allows real time fund transfer.
  • Launchedin December, 2016.


What is UPI?

Unified Payments Interface (UPI) is a system that powers multiple bank accounts into a single mobile application (of any participating bank), merging several banking features, seamless fund routing & merchant payments into one hood.

It also caters to the “Peer to Peer” collect request which can be scheduled and paid as per requirement and convenience.

Each Bank provides its own UPI App for Android, Windows and iOS mobile platform(s).


Why UPI is outperforming e- wallets?

People are changing the way they transact, choosing bank-to-bank methods such as the Unified Payments Interface (UPI) over other instruments such as e-wallets. This is because UPI is completely interoperable and as such, it is unique in the world, where you have an interoperable system on the ‘send’ and ‘receive’ side.

The rapid growth of UPI is accompanied by a reasonably strong growth in the value of transactions done using e-wallets, but the latter’s growth has not taken off much following the fillip it received in the aftermath of demonetisation in November 2016.


The BHIM apps has three levels of authentication:

  1. For one, the app binds with a device’s ID and mobile number.
  2. Second a user needs to sync whichever bank account (UPI or non-UPI enabled) in order to the conduct transaction.
  3. Third, when a user sets up the app they are asked to create a pin which is needed to log into the app. The UPI pin, which a user creates with their bank account is needed to go through with the transaction.


UPI – Benefits to the Ecosystem participants:

Benefits for banks:

  1. Universal Application for transaction.
  2. Leveraging existing infrastructure.
  3. Safer, Secured and Innovative.
  4. Payment basis Single/ Unique Identifier.
  5. Enable seamless merchant transactions.


Benefits for end Customers:

  • Round the clock availability.
  • Single Application for accessing different bank accounts.
  • Use of Virtual ID is more secure, no credential sharing.
  • Single click authentication.
  • Raise Complaint from Mobile App directly.


Benefits for Merchants:

  • Seamless fund collection from customers – single identifiers.
  • No risk of storing customer’s virtual address like in Cards.
  • Tap customers not having credit/debit cards.
  • Suitable for e-Com & m-Com transaction.
  • Resolves the COD collection problem.
  • Single click 2FA facility to the customer – seamless Pull.
  • In-App Payments (IAP).


About NPCI:

NPCI is an umbrella organisation for operating retail payments and settlement systems in India.

It is an initiative of Reserve Bank of India (RBI) and Indian Banks’ Association (IBA)under the provisions of the Payment and Settlement Systems Act, 2007, for creating a robust Payment and Settlement Infrastructure in India.

It has been incorporated as a not for profit company.

In 2016 the shareholding was broad-based to 56 member banks to include more banks representing all sectors.


Sources: pib.