BharatQR, UPI, BHIM, NUUP: How these digital payment apps, services work

The growth of digital payment services is fueled by introduction of apps and services by the NPCI

As India leaps toward a digital economy, the adoption of digital payment platforms is on the rise as well. Before the demonetisation drive, which started on November 8, 2016, there were a handful of digital wallet services -- PayTm, FreeCharge and MobiKwik. But, none of them offered comprehensive digital payment structure and had their own limitations.
 
As the government shifts focus toward cashless society, it also pushed a bouquet of digital payment options in the form of apps and services like BharatQR code, Unified Payments Interface (UPI), BHIM app, and National Unified USSD Platform. These services were introduced alongside existing banking services such as internet banking, mobile banking and immediate payment service (IMPS).

 
Let’s take a look at these digital payment options and how they function:
 

BharatQR code
 
BharatQR code is a National Payments Corporation of India (NPCI) and payments companies, Mastercard and Visa led initiative to enable digital payments without card or card swiping machines.
 
Quick response (QR) codes carry information that could only be decoded with the help of a QR code scanner and that is exactly what BharatQR does. Banks have been integrating BharatQR services to their existing mobile apps and therefore no extra app or service is required to exercise BharatQR.
 
To use BharatQR code for digital payments, user need to have an internet enabled smartphone and bank app compatible with BharatQR code. Using the bank app to scan the QR code eliminates the need of entering required information like phone number or card number manually to make the transaction. Rather, all it takes is to scan the QR code and the amount gets transferred within bank accounts.

 
Unified Payments Interface (UPI)
 
Just like BharatQR, UPI is not an app but a service. The UPI significantly reduces the steps involved in fund transfer process like typing card details, net banking password, IFSC code etc. and facilitate instant fund transfer facility via virtual payment address (VPA) using mobile platform.
 
To use UPI services, all you need is an internet enabled smartphone equipped with UPI supported banking app that supports UPI services. Also, to use UPI services, the user need to create VPA, which is sort of an e-mail ID like khalid@icici or sunainaa@kotak. These VPAs acts as the address to direct payments and can be used to receive or transfer money. Also, these VPAs eliminated the need to add/enter any information like account number, IFSC code etc. before transferring funds and therefore simplifies the whole fund transfer process significantly.

 
Bharat Interface for Money (BHIM)
 
BHIM, unlike BharatQR and UPI, is a service based on app developed by the National Payments Corp. of India (NPCI) to promote digital transactions using UPI.
 
To use the BHIM app, the user need to have an internet enabled smartphone and UPI compatible bank account. The BHIM app works on UPI protocols and thus require mobile number linked to the bank account to make transaction. With the help of BHIM app, the user can manage multiple bank account that support UPI services in one single app. The app also enables other features – user can check bank balance, switch accounts and send money to non-UPI supported banks with the help of IFSC code, account number. The app also supports fund transfers to Aadhar registered bank accounts.

 
National Unified USSD Platform (NUUP)
 
Unlike above mentioned services that require internet enabled smartphone and an app, NUUP is based on unstructured supplementary service data (USSD) codes. The USSD codes doesn’t require any internet connection or smartphone and can simply work by transmitting information using GSM network.
 
Because NUUP services are based on USSD codes, the service is limited to check account balance, generate mini statement, fund transfer via MMID (a code allotted by banks on mobile banking registration), IFSC code or Aadhaar number, and generating OTPs, M-PIN.
 
Different banks follow different protocol to use NUUP service, and therefore the user need to follow up with the bank to confirm the USSD code for various services.