December 30th, 2016 was a watershed moment, not just in the history of eWallets but also in bringing digital transaction to the reach of common citizen of this country. Prime Minister Narendra Modi launched Bharat Interface for Money, or BHIM, app that allows bank to bank funds transfer between any two parties, through UPI as its backbone. The app is developed by National Payments Corporation of India (NPCI) and currently is available for Android and is slated for launch on iOS in near future. Product overview can be read here. The app has a dedicated Twitter handle and already has over 5M downloads. Unfortunately, even after the high-profile launch and sustained push by the government, the power of app is still not appreciated well enough.
I installed the app very next day of the launch and configured it within minutes. I could easily send money to another account, as well as place request to receive money from another account. The debit and credit happened instantly, followed by an SMS. All as expected. I spoke about it within the family and friends, highlighting the ease of use and promptness of fund movement. Two days later, the milkman arrived with coupons for the month. When I offered to pay through BHIM, he readily accepted the offer and left within a minute with his bank account credited duly. Next, I safely presumed that it would be the same with the rest.
Yesterday, however, I got a puzzled look back from a boutique owner when wife offered to pay via BHIM as her card machine was out-of-order. “er… What’s BHIM?”, was the question. I explained briefly and asked to share her name, account number and IFSC code. Like of milkman, her account was credited within seconds of I pressing the send button, alerted by SMS receipt. Out of curiosity, we asked if she used PayTM for her domestic purchases. She denied saying, “Why should I keep my money, howsoever little, with a third party?”. I explained that as BHIM uses UPI, the money gets credited directly from my bank to hers instantly, without any intermediary. All is needed is a bank that supports UPI. One can choose from multiple banks where they have activated UPI. Mighty impressed, she noted the name of the app and promised to install it by end of the day.
On the way out of the shopping arcade, we went to the Patanjali retail store and inquired about BHIM. To our surprise, the shopkeeper was not aware about it. He accepted card and said that he was going to register with PayTM soon. We evangelized about the app and left bemused wondering how come it is still not well understood. This is when BHIM also has a scan and pay option similar to other eWallet apps like PayTM, FreeCharge, etc.
Today, we tried to check the knowledge of BHIM at the neighboring restaurant, only to get a puzzled look yet again. He happily said that we could pay by PayTM, if not BHIM. I asked if I pay 500/- will he get full amount? “No, 488.55/-“, was the reply. This happens as PayTM charges 1.99% transaction fees, plus 0.3% service tax (not charges). Then I asked if the restaurant will get the funds instantaneously? “No, tomorrow. It used to be within a week. But after demonetization, it has improved to next day.” This is true and can be verified here on PayTM’s website.
This lead me to think of a few pertinent points:
Glitzy launch is not sufficient. Government needs to evangelize the benefits of BHIM more aggressively unlike the shoddy communication by RBI/MoF during demonetization. That would include:
For individuals/customers:
- Your money stays with you till the last moment. No loss of interest. In fact, the eWallet apps like Pockets by ICICI and PayZapp by HDFC bank have this as their USP. Further, prominent banks are already supported and more will get added.
- No need to install multiple eWallets, not even of different banks. No need to remember password of umpteen eWallets.
- The app has double protection. PIN to open the app followed by PIN set by the bank for UPI transaction. If you have screen lock, that’s triple protection.
- You can get money transferred to a mobile number if it is connected to your bank account. If not, account + IFSC works too.
- Icing on the cake: one can check bank balance. No trips to ATM needed for this.
For merchants:
- The money credit is instant, irrespective of type of bank account.
- There are no annual maintenance charges or setup charges imposed by a few eWallets.
- There are no transaction charges yet. And if the government wants it to succeed, it should never think about introducing it.
- The transaction time is negligible. Faster than cash exchange if short change is involved. More favorable for merchants, actually.
- You can request money from people with electronic trail, for instance, society maintenance, shop rent, parking charges, etc.
Further suggestions for the Govenment:
- All government entities taking challan across glass windows should comply with Scan and Pay option in BHIM by April 1, 2017. They can start with Indian Railways, then municipal corporations, RTO, etc. This will avoid endless queues that waste precious hours of citizens and productivity of their employers. Of course, a byproduct of that will be disappearance of touts.
- Government can promote the app through celebrities, not limiting to that of Bollywood.
- Government emporiums, Khadi bandars, ASI protected monuments, etc. can make scan and pay as default mode, may be, sprinkled with percentage or value discount offers.
Some more:
If you note BHIM completely obviates the need of all the eWallets including those offered by banks like State Bank Buddy, Pockets by ICICI and PayZipp by HDFC, etc. as one can choose a bank within the app and can pay to mobile number, directly into an account or even by scan and pay. It’s truly a one stop app for carrying out digital transactions.
But then I suddenly recalled the allegation CM of India had labelled on the PM of India.
Paytm biggest beneficiary of PM's announcement. Next day PM appears in its ads. Whats the deal, Mr PM? https://t.co/lfP0PrQICQ
— Arvind Kejriwal (@ArvindKejriwal) November 10, 2016
Or the one from the 50 year old youth leader? PayTM means:
#WATCH: Congress VP Rahul Gandhi says, PM Narendra Modi's so-called bold decision (#DeMonetisation) was a "foolish" decision. pic.twitter.com/rO1BxNsW3p
— ANI (@ANI) December 8, 2016
Indeed.
