The NPCI (National Payments Corporation of India) had launched a mobile application for Aadhaar-based payments through Bharat Interface for Money (BHIM) app for merchants.

The service was launched on the occasion of Dr. B.R. Ambedkar by Prime Minister Narendra Modi. The new feature will provide customers to make purchases using their Aadhaar number that is linked with their bank account. The transaction will require customer’s fingerprint for authentication.

This facility directly caters to about 40 crore bank account customers spread across the country whose account is linked with their Aadhaar numbers. It is a large opportunity for expanding digital transactions as over 99 per cent of adult population is now possessed with aadhaar cards.

Currently, over 30 banks are participating on BHIM Aadhaar and more member banks shall be associating with it. For now, BHIM Aadhaar would not be applicable for corporate merchants but only for retail merchants. BHIM is a smart mobile phone based app based on Unified Payments Interface (UPI) that allows simple, easy and quick payment transactions using UPI.The app is now available on Google Play store and iOS.

The Indian Prime Minister Narendra Modi, originally launched the BHIM app in the vision of digital India, to encourage cashless transactions. BHIM is based on UPI, which is the Universal Payments Interface and thus linked directly to a bank account. Anyone or a merchant, whom you’re trying to pay doesn’t necessarily need to have the BHIM app. All they need is a bank account to receive the payment.

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BHIM also provides transfer via IFSC, MMID as well for non-UPI banks. It also means the government has decided to go with one app that will enable digital payments via UPI.

What else can BHIM do?

You can send and receive money to other UPI accounts or addresses through BHIM app. You can also send money via IFSC (Indian Financial System Code) and MMID (Mobile Money Identifier) Code to users who don’t have a UPI-based bank account. Also the users have the option of creating your own QR (Quick Response) code for a fixed amount of money, which the merchant can scan to make the deduction.

Is BHIM then just another mobile wallet?

No. You can store a limited amount of money in a mobile wallet like Paytm or MobiKwik, which you can send only to someone who is using the same wallet. But BHIM is UPI-based, and thus linked directly to a bank account. All the payee needs is a bank account. If this account is UPI activated, you can just ask for the payee’s VPA or virtual payment address, and make the payment to that account.

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