BHIM Us up Jait­ley!

Af­ter the noise and din of Bud­get day dies down, stake­hold­ers take stock BHIM may soon be the right plat­form for small banks to en­ter pay­ment space

The Economic Times - - Disruption: Startups & Tech - Pratik.Bhakta@ times­group.com

Mum­bai: Gov­ern­ment-pro­moted mo­bile app BHIM can pro­vide a per­fect plat­form for smaller banks to en­ter the re­tail pay­ments space with­out de­vel­op­ing their own customer-fac­ing apps.

BHIM, which is be­ing de­vel­oped by the Na­tional Pay­ments Cor­po­ra­tion of In­dia (NPCI) and is pro­moted by the gov­ern­ment as a par­al­lel UPI app, can turn out to be an ideal white-la­bel so­lu­tion, say bankers. This al­lows even smaller banks to en­ter the re­tail pay­ments space by al­low­ing their cus­tomers to down­load BHIM to ac­cess var­i­ous ser­vices like mer­chant pay­ments and bill pay­ments of­fered to them by the bank through its own tie-ups and part­ner­ships. “I think of BHIM as a meta-UPI switch, a ba­sic in­fra­struc­ture be­yond which banks can de­velop a layer of ser­vices and mer­chant pay­ment options in or­der to en­hance customer us­age, loy­alty and stick­i­ness,” said Ra­jeev Ahuja, head of strat­egy at RBL Bank.

Ques­tions sent to NPCI re­mained unan­swered. “BHIM is a min­i­mum white-la­bel ap­pli­ca­tion, be­yond which banks can of­fer ad­di­tional stacks of ex­pe­ri­ences unique to our cus­tomers or per­haps some­times we could also de­velop our own co-branded pay­ment ap­pli­ca­tion,” said Mru­tyun­jay Ma­ha­p­a­tra, chief in­for­ma­tion of­fi­cer, SBI. While BHIM will bring in more in­no­va­tions in the UPI-led pay­ments tech­nol­ogy, bankers feel that there is bound to be some con­sol­i­da­tion in the pay­ments space as a lot of ex­per­i­men­ta­tion is hap­pen­ing to make In­dia a less cash so­ci­ety and many re­dun­dant pay­ment ap­pli­ca­tions can get subsu- med within BHIM.

“With BHIM be­ing there, the pres­sure on smaller banks to come up with their own customer fac­ing UPI apps has dras­ti­cally re­duced and they can get their cus­tomers to use BHIM for ba­sic trans­ac­tions,” said Bhavik Hathi, manag­ing di­rec­tor, Al­varez and Marsal, a Mum­bai-based con­sul­tancy firm.

An­other big con­cern that has emerged around BHIM is re­gard­ing the res­o­lu­tion of pay­ment dis­putes and com­plaints since NPCI

CON­VERG­ING TECH

is not a customer-fac­ing or­gan­i­sa­tion. Prob­lems which cus­tomers face with re­gards to BHIM are be­ing raised with banks who do not have the means to ad­dress such prob­lems on their own.

It is in sit­u­a­tions like these that third-party pay­ment providers like Tru­pay and oth­ers get into the pic­ture. Tru­pay has tied up with var­i­ous banks to al­low cus­tomers to use Tru­pay app and ac­cess UPI through the part­ner banks and also pay at mer­chant lo­ca­tions that have tied up with Tru­pay.

“Mer­chants mostly have mul­ti­ple ac­counts, rec­on­cil­ing with such ac­counts and in­cor­po­rat­ing dif­fer­ent modes of pay­ments can be done by third party ap­pli­ca­tion providers like us,” said Rahul Gochh­wal, co­founder, Tru­pay.

(With in­puts from Mugdha Vari­yar in Ben­galuru)

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