Topic of the Day – Bharat Interface for Money (BHIM)

UPSC Exam Preparation: Topic of the Day – Bharat Interface for Money (BHIM)


Bharat Interface for Money (BHIM) is a mobile payments application based on NPCI’s Unified Payments Interface (UPI). It provides the facility to easily send or receive money from other customers using the UPI. BHIM is developed by National Payments Corporation of India (NPCI)—the umbrella organisation for all retail payments system in India.

Advantages of BHIM:

  • Allows easy money transfer without the hassle of knowing the recipient’s bank or account number. The entire transaction can be done in under a minute.
  • Instant money transfer at all times. It does not require prior beneficiary registration, unlike net-banking.
  • Allows the use of Unstructured Supplementary Service Data (USSD)to access bank account details, since it is UPI-based. USSD does not require an internet connection.
  • Customers who don’t have UPI accounts can also receive money via Indian Financial System Code (IFSC) and Mobile Money Identifier (MMID) codes.
  • It is available in English and Hindi, with other language interfaces in the pipeline.
  • Fixed amount can be transferred by generating QR code, in case the receiver does not want to share their phone number. Useful for merchants and vendors.
  • A Virtual Payment Address is generated. Flexibility to transfer money either via the receiver’s mobile number, the VPA, or the UPI ID.
  • Nearly all the commercial banks support BHIM. Unlike e-wallets, money can be directly transferred to bank accounts via BHIM.
  • Aadhaar based payments at the scan of a “thumb” (biometric authentication) are also possible by the app.

Security features:

  • The BHIM app is tied to the mobile number and device ID. So using the app on a different handset will require a separate authentication process.
  • Three-point authentication via mobile number, device ID and UPI PIN.
  • Fingerprint-based biometric verification of transactions via Aadhaar will prevent fraudulent transactions.
  • UPI PIN is needed for both opening the app as well as for transactions.
  • Resetting UPI pin requires debit card details and OTP SMS to authenticate.

BHIM vs Paytm-like mobile wallets:

  • The BHIM app gives serious competition to existing mobile wallets. BHIM app would appear as comparatively reliable option as it is made by the NPCI and is directly synced to the bank account.
  • Since the transactions happen directly from the bank accounts, there is no need to recharge the wallet.
  • No commissions and hidden charges for using the app.
  • BHIM allows bank to bank transfers unlike other e-wallets.
  • With the BHIM UPI app, the upper limit of a single transaction is Rs. 10,000 and one can transfer Rs. 20,000 in 24 hours. But, with PayTM, one can receive up to 25,000 rupees in a month.



BHIM has the potential to demolish private mobile wallets owing to the various advantages over the latter. Nevertheless, the challenge of advertising and creating awareness about the app and getting the merchants on board prevails. It would be difficult to make an impact unless BHIM is accepted at physical stores, public transport, etc,



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