What is BHIM and How to Use it? - H&R Block| Blog

What is BHIM and How to Use it?

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What is BHIM and How to Use it?

BHIM or Bharat Interface for Money is a digital payment app based on Unified Payment Interface. It was launched by Prime Minister Narendra Modi at Digi Dhan Mela event in New Delhi yesterday. The app is aimed at promoting digital transactions and tackling various hurdles in India’s way to become cashless economy.
This small sized app (only 2 MB) is currently available on android platform only but will soon be made available on iOS and other platforms. Although various digital payments are already available in the market, what really separates this app from others is its unique approach. It solves a very fundamental problem faced by small vendors in India. Several digital payment service providers like Mastercard and Visa charge fees on every transaction while initial set-up for availing such service costs Rs. 5-10k which has kept small vendors away from going digital. With the help of this app, they can receive payments without the need to pay any fees. Since the app is built over IMPS, transactions done through BHIM will only take few seconds to complete. People can transfer money to one another from as low as Re. 1 to as high as Rs. 20,000 in a day. However, a cap of Rs. 10,000 has been put on every single transaction.
You can download this revolutionary app here. Once downloaded, you need to register using your bank details. You can link only one bank account to the app. However, you can change the default account anytime you want. To complete registration, you need to set up UPI PIN after which your mobile number becomes your payment address.
BHIM has the potential to replace all mobile wallets. In case of mobile wallets like Paytm or MobiKwik you store a limited amount of money on the app, that can only be sent to someone who is using the same wallet. So if you have a Paytm account it won’t be possible for you to send money to someone on MobiKwik.
However, BHIM is based on UPI, which is the Universal Payments Interface and thus linked directly to a bank account. Your friend, relative or even a merchant who you’re trying to pay doesn’t necessarily need to be on the BHIM app. All they need is a bank account to receive the payment. If they have UPI activated, you can just ask for their VPA or virtual payment address, and just make a payment to that account. The advantage is you don’t need to remember your account number or share that with everyone. This VPA is all that is needed to transfer funds.
BHIM has the potential to transform the way people do transactions. Government is soon planning to link it with Aadhaar after which you will only need your thumb print to do online transactions.

Neha Joshi
Neha Joshi
Neha Joshi is a Chartered Accountant and an Assistant Manager at H&R Block. She is the Head of Content and is responsible for strategizing the entire content for website, PR and social media. She comes with a rich experience in publishing where she wrote books for various international professional qualifications. She was also a trainer for the subjects she wrote.

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