BHIM gets more powerful, now playing catch-up with UPI rivals

In January this year, barely 29 months after its launch, at Rs 109,932 crore for the month, UPI transactions beat both debit and credit card transactions at merchant outlets (`105,520 crore); the same success, however, eluded the public sector NPCI’s BHIM, the original UPI app. While BHIM accounted for 45.7% of all UPI transactions by value in August 2017, this fell to a mere 4% in August 2019. Perhaps it didn’t matter as much then since, with the prime minister having just announced demonetisation, NPCI’s main aim was to quickly showcase what was possible via BHIM and then to let others build upon it. And build upon it, they did—PayTM was the first off the block, and users could pay all manner of utility bills, for instance; indeed, most petrol pumps were quick to use PayTM and got to BHIM-UPI only recently, and even Mother Dairy outlets allowed PayTM before moving to BHIM-compatible QR codes.

Generous cashbacks and merchant discounts helped make other payment apps more popular—BHIM, which recorded 10 million downloads in the first 10 days, gave just Rs 105 crore of cashbacks till September 2018—since, at the end of the day, if the merchant accepts certain payments, customers automatically download that app.