BHIM: Aadhaar-based app launched to simplify digital payments

BHIM is biometric version of UPI, USSD and expected to minimise role of plastic cards, PoS machines

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Prime Minister Narendra Modi on Friday launched an Aadhaar-based mobile payment application called BHIM (Bharat Interface for Money).

On day 50 of the window provided by the government to citizens to exchange or deposit old currency notes of Rs 500 and Rs 1,000 denominations, the Prime Minister at a 'Digi Dhan Mela' event in the capital, asked citizens to make at least five digital transactions, so as to understand the concept behind e-payments, and then use it extensively.

"Download it on a smartphone or on a feature phone. It is not necessary to have the internet for this app. In the next two weeks, one more work is being done, which will increase the power of BHIM so much that you would be able to withdraw money even with your fingerprints," he said.

BHIM is a biometric and rebranded version of UPI (Unified Payment Interface) and USSD (Unstructured Supplementary Service Data). It is expected to minimise the role of plastic cards and point-of-sale machines, once believed essential for a less-cash society.

"In two weeks, we will make one more accomplishment; its security is being worked on. It will empower BHIM; you'll only require your thumb to pay," said Modi. He added this app would empower the poorest of the poor, with the thumb becoming the new identity.

The app is supposed to aid in digital payments of people who have a bank account but either do not have debit or credit cards or are unable to use these. At present, it is available only on the Android mobile operating system. It can be downloaded by merchants and used with a biometric reader, currently available for Rs 2,000. A customer only needs to use his or her fingerprint to pay from an Aadhaar-linked account.

The app would eliminate the fee payments for service providers like card companies such as MasterCard or Visa.

Jump in digital payments

Digital payment channels, such as mobile wallets, USSD and RuPay, have seen a massive uptake and rise in transactions with the demonetisation drive.

According to government data, the number of USSD transactions saw a 5,135 per cent jump, from 97 such deals a day on November 8 to 5,078 on December 25. The value of transactions on USSD -- mobile short code message, used mainly for banking services on feature phones -- during the same period grew 4,061 per cent, from Rs 1 crore a day to Rs 46 crore on December 25.