BHIM is Growing, But Will It be Enough to Match Paytm’s Might?

The PM Modi-promoted mobile payment app is growing but the lack of innovation and interest hurts them.

Mobile payment apps are on the rise, but only a few of them are raking in the moolah. 

(Photo: Harsh Sahani/The Quint)

With over 57% of market share in the digital payments arena, Paytm is the undoubted beneficiary of India’s continued march towards a cashless economy. This move began last year when PM Modi announced that old 500 and 1,000 rupee notes were no longer legal tender.

This sparked huge interest in Paytm, which now caters to over 200 million users on its platform (active users much lower), catching the eyes of the government.

Under the wing of the National Payment Corporation of India (NPCI) the government launched the Bharat Interface for Money or BHIM app on 30 December 2016 that’s based on Unified Payment Interface.

Also Read: United Payment Interface: How Will it Make Life Simpler for You?

Recently, claims have been made by various government spokespersons that BHIM has recorded over 50 lakh transactions, chalking up Rs 1,500 crore in value, but the app has been downloaded by over 2 crore users on Android. It’s also worth noting that:

BHIM has been available on iOS since February this year, but there are no numbers to ascertain how many people have used BHIM on the iPhone.

This gulf in app downloads and payments made became evident when we scanned through NPCI’s press release, which states that by June 2017, BHIM had a mere 4 million (or 40 lakh) active users. Which is the crux of the problem at hand for NPCI and its digital payment app.

In comparison, Paytm’s last recorded numbers clearly show where BHIM lags.

Paytm has over 200 million users on its platform, out of which they’ve got 122 million active users. 70% of them are on Android, while only 4% of them use iPhone. 

A recent Kalagato report has indicated that BHIM has more than just Paytm to worry about. In fact, PhonePe (owned by Flipkart) which is another mobile payment platform, has surpassed BHIM in its reach.

(Photo: Canva/The Quint)

In an unexpected and rather surprising development, the reach of BHIM has fallen below that of PhonePe - another UPI-based payments app that got acquired by Flipkart in 2016. 

Kalagato report

The generic purpose of UPI has enabled multiple payment players to make a case for themselves with the users. The lack of encouragement has resulted in lesser use of BHIM for payments.

(Photo: Canva/The Quint)

The people behind BHIM seem to have taken their foot off the accelerator and the results are plain to see.

Kalagato report

What’s hard to fathom is the delay in launching BHIM or may be even getting it ready in time for when demonetisation struck the country. The first-mover advantage just after demonetisation has enabled Paytm to rake in the moolah, and the relatively late debut of BHIM has worked against NPCI.

In addition to that, the Kalagato report adds that limited knowledge of NPCI in the digital payment space could be another reason for BHIM’s limited growth since its launch.

Paytm - A Bridge Too Far Right Now for BHIM

Safe to say that BHIM has a long way to go before they can think of competing with Paytm in this market. They are trying to imitate certain aspects of the app (and rightly so) with cashback schemes, QR Code enabled payment options, and lending a hand to others without a smartphone (USSD-enabled payment feature).

But the truth is BHIM with a market share of 28% in the P2P banking segment, lags behind Paytm in its course of innovation even though BHIM has a simple, user-friendly setup in place.

What Lies Ahead?

BHIM needs to ensure there are incentives for its 2 crore users to actively make payments via the app, which could potentially take the transaction value to much more than its existing Rs 1,500 crore mark.

NPCI’s head has recently confirmed that a new-look BHIM ( version 1.4) will be rolled out soon, catering to more features, making BHIM more accessible.

But what could really enable BHIM to come up trumps against Paytm, could be WhatsApp’s payment feature going live via UPI, which directly benefits NPCI and Co.