[ecis2016.org] Read all about the BHIM mobile application and the various transactions you can use it for, including those connected with property payments
On December 30, 2016, Prime Minister of India Narendra Modi launched the BHIM mobile payments application. BHIM stands for Bharat Interface for Money and has been named after BR Ambedkar. BHIM has been developed by the National Payment Corporation of India (NPCI). It is an app which facilitates instant, cashless payments directly from your bank account to the recipient’s bank account.
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The app also allows the user to request payments. With its easy interface and direct linkage to bank accounts, it is being widely used for paying house rents, society maintenance charge, security deposits, property tax and other real estate transactions if it falls under the prescribed limit of the app. In fact, the BHIM UPI can also be used for paying other household bills which includes electricity bill, water usage bill as well as LPG bill. The transaction is cashless and have minimal chances of failure as compared to any other payment medium.
BHIM can be installed on all smartphones. The BHIM app does not act as a wallet and does not store the user’s money; it only facilitates payments between two bank accounts. Transactions on the BHIM app can be done at any time, including weekends and bank holidays.
The relation between BHIM and UPI
UPI or Unified Payments Interface is a payment system (such as Visa, Mastercard, NEFT, etc.) which has been developed by the National Payment Corporation of India. It is an online payment transfer method which allows money to be transferred from one bank account to another. The UPI system has been developed using the pre-existing IMPS infrastructure. Payments which are made using UPI are instantaneous and can be made at any time. The UPI system is governed and regulated by the Reserve Bank of India. Banks which have participated in the UPI system can release their mobile applications which facilitate payments using UPI.
UPI allows different mobile clients to operate on its system. BHIM is one such app which functions using the UPI payment system. Integration with the UPI system allows BHIM to make deductions directly from the user’s bank account and transfer the amount directly to the recipient’s bank account. Unlike mobile wallets like PayTM and MobiKwik, the UPI system allows BHIM users to transfer money to recipients who are not BHIM users.
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The difference between BHIM and UPI
BHIM and UPI are two different entities. Within the UPI ecosystem, BHIM is a PSP or a Payment Service Provider. UPI is the payment system which enables payment service providers like BHIM to make and receive payments. The UPI ecosystem consists of various players, which are, the payment service providers which forms the interface between the users and their bank accounts, the banks which hold the user’s money in their accounts, and the national payment corporation of India which uses the pre-existing IMPS infrastructure and functions as the central mode through which the transfer is affected.
Hence, there can be many PSPs like BHIM, which use the UPI payment system to enable users to make their financial transactions. BHIM is the mobile application through which users can access and participate in the UPI infrastructure. BHIM is the interface which registers the user’s identificatory information and bank account details and upon verification allows the user to make payments to other participants in the UPI infrastructure. Since BHIM is dependant on the UPI payment system, the payment senders bank account and the payment receivers bank account must both be held by banks which are participating in the UPI payment system.
To Whom can you make payments using BHIM?
A BHIM user can make a payment using BHIM to the bank account of any individual or merchant using the recipient’s bank account details, or any details of the type listed below. To receive payment through the BHIM app, it is essential that the recipient’s bank must be a participating bank to the UPI payment system. A large number of banks in India participate in the UPI payment system, and the updated list can be accessed on BHIM website. A BHIM user can also use BHIM to make payments on e-commerce websites which allow for UPI based payments.
There are multiple ways in which a BHIM user can make a payment to an intended recipient. The intended recipient can receive their payment by informing the BHIM user of any of the following details:
- Virtual Payment Address (VPA);
- Bank Account Number and IFSC;
- Aadhar Number linked with a bank account;
- QR Code.
The intended recipient does not need to have the BHIM app to receive payment through BHIM. The amount is transferred directly into the recipient’s bank account. The intended recipient only needs to provide any of the above information to receive the payment.
Which devices and platforms are compatible with BHIM?
To use the BHIM for making any payment towards any household bill or paying rent, you must download the BHIM mobile app on your smartphone mobile device. The operating system on your smartphone must be either Android 5 or above, or iOS 8 or above. The mobile app can be downloaded from the Google Play Store or the App Store for Android and iOS, respectively. As of now, the BHIM app is not available for desktops or laptops, or Windows or Blackberry phones.
The BHIM mobile app is available in 13 languages which are: English, Hindi, Bengali, Tamil, Telegu, Kannada, Malayalam, Odia, Gujarati, Marathi, Punjabi, Assamese or Urdu.
Can you use your existing bank account with BHIM?
If you already hold a bank account with a bank which is participating in the UPI payment system, then you can use that bank account to make transactions through BHIM. There is no need to have a separate bank account for use with BHIM. A drawback of the BHIM app is that you can only use one bank account at a time with BHIM. However, it is expected that BHIM will allow for multiple bank accounts to be linked with BHIM shortly.
There are currently 113 banks which are participating in the UPI payment system and therefore, can send or receive payments through BHIM for various purposes such as paying rent, security deposit or property tax.
Are wallets compatible with BHIM?
BHIM is a service which allows users to transfer money between bank accounts. Hence, a BHIM user can’t transfer money from their bank account to the mobile wallet of a recipient. The recipient will receive the money in their bank account through BHIM, and they can subsequently transfer money from their bank account to their mobile wallet.
Do you need UPI to use BHIM?
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BHIM is a mobile service which operates using the UPI payment system. To use BHIM, a user needs to have a bank account with a bank which participates in the UPI payment system. As mentioned above, there are currently 113 banks which operate in India which are part of the UPI payment system.
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A BHIM user does not need to do anything in addition to holding a bank account with such a bank. Once the bank account held with a UPI participating bank is linked to BHIM, the user is automatically a part of UPI, and he can transfer his money or receive money through the UPI payment system. Similarly, the recipient to which a BHIM user intends to transfer money must also hold a bank account with a bank which participates in the UPI payment system. A recipient cannot receive money in a bank account of a non-UPI participatory bank through BHIM.
How does BHIM differ from traditional online transaction methods?
Traditionally, to make a payment online, one would have to use net-banking facilities provided by their bank or use their debit card or credit card. These methods are considerably different from the functionality of the UPI-powered BHIM mobile app.
To use their bank’s net-banking facilities, a user would typically have to log in to their net-banking account available on their bank’s website. This would require the user to know or have their customer ID and password available and input the same on the website. Once logged in, the user would have to select between NEFT, RTGS or IMPS services (as and if enabled by their bank) which have their benefits and disadvantages.
For example, NEFT allows a user to transfer an amount in a single day to a beneficiary’s bank account. However, NEFT did not transfer your money instantaneously, and it would take an average of two hours for a transaction to be complete. Furthermore, NEFT transactions only worked during business hours and did not function on Sundays or bank holidays. There is also a service charge levied for every NEFT transaction ranging between Rs. 2.5 to Rs. 25, which is exclusive of tax.
Similar to the NEFT, there is the RTGS system which allows for online transactions between participating bank accounts. However, the RTGS system has a minimum limit. A user can only transfer a minimum of Rs 2 lakhs in an RTGS transaction. A transfer for a value less than Rs 2 lakhs is not accepted in the RTGS payment system. The RTGS also works only during banking hours and is not available on Sundays or bank holidays. The transaction fee for every transaction is also relatively expensive, costing the user anywhere between Rs 30 to Rs 50. The advantage of RTGS over NEFT is that each transaction only takes about half an hour to be completed.
IMPS is the third payment system available to net-banking users. This payment system also allows a transfer between the bank accounts of the sender and the receiver. An IMPS transfer occurs in real-time, and the transfer is completed instantaneously or within a maximum period of half an hour. The cost of IMPS transfer is anywhere between Rs 2.5 to Rs 15, which depends upon the bank from which the transfer is being made. The main advantage of an IMPS transfer, over the NEFT or the RTGS, is that a user can make an IMPS transfer at any time and on any day including Sundays and bank holidays. There is no minimum limit to the transfer, which is allowed by the IMPS payment system.
Once a user chooses between NEFT, RTGS or IMPS, the user must add the payee to their net-banking account. This process involved entering the recipient’s name, account type, account number and IFSC code. For security reasons, most banks allow you to make a transfer to a payee only half an hour or more after a payee has been added to your account. Once the system allows you to make the transfer, you can enter the amount of money to be transferred and click on the payee’s name to affect a transaction.
To make an online transaction using your debit or credit card, you must access the payment gateway of the merchant provided by the merchant on their website. On the website, the user must enter their card number, the expiration date, the CVV number, etc., and subsequently, verify the transaction using the method dictated by their bank. A debit or credit card is primarily used to pay online merchants. These transactions can be made at any time and on any day. There is no minimum limit for such transactions. Friends or family or any other individuals who have not set up their payment information through a payment gateway cannot receive funds through a debit card or a credit card.
Whereas, if a user wants to transfer money using BHIM, then he can use any of the following details of the beneficiary:
- Mobile number of the beneficiary which has been registered with UPI;
- Aadhar number of the beneficiary which is linked to their bank account;
- Virtual Payment Address (VPA) of the beneficiary which has been registered with UPI;
- Account number and IFSC Code of the beneficiary’s bank account.
- Scanning the QR code of the beneficiary
Once a user enters any of the above details and the amount to be transferred, the payment is complete, and the recipient receives their money instantaneously.
Similarly, a BHIM user can pay an online merchant, such as Amazon or Flipkart, for a transaction by entering their BHIM UPI ID and then verifying the same. Some banks charge a nominal fee for any transaction which is made through BHIM. The cost of a transaction made through BHIM is similar to or the same as the cost of using the IMPS payment system.
Limitations of using BHIM
A BHIM user can only make a payment to a merchant who accepts BHIM as a method of payment. As of date, there are a lot more merchants who accept payments made through debit card or credit card or cash. BHIM allows a user to transfer money directly to a beneficiary’s bank account but not to the beneficiary’s mobile wallet like PayTM, or MobiKwik.
There are certain restrictions to the number of transactions which can be made through BHIM. The maximum amount which can be transferred using BHIM is limited to Rs. 20,000 per transaction. In a single day, a BHIM user can only transfer a maximum of Rs. 40,000 using a single bank account. BHIM allows its users a maximum of ten transactions per day. If a user has made ten transactions in a day, then the user must wait at least for twenty-four hours before they can make another transaction.
BHIM allows only one bank account to be added by a user at a time.
How safe is BHIM?
The BHIM mobile app has been developed with a priority to keeping its user’s secure from fraud or cyber-attacks. E-wallets use a one-factor authorisation, and net-banking uses two-factor authorisation, however, in comparison, BHIM uses three-factor authorisation to ascertain the correct identity of its user.
Once you download the BHIM app on your mobile phone, the app checks your device ID as well as your mobile number. The BHIM app cannot be used by two mobile phones. Furthermore, any transaction on BHIM can only be made after the user enters their UPI PIN. Hence, your BHIM account has been made safe using three factors, which are your unique mobile phone, your mobile number as well as your UPI PIN.
Do you need to take any precautions while using BHIM?
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A user should ensure that their UPI PIN has been kept secure from any third-parties. The safest way to keep a UPI PIN safe from unwanted usage is to remember the UPI PIN rather than writing it down. If the UPI PIN must be written down to avoid forgetting the PIN, then the user should ensure that they write it down in a safe place to which only they have access.
Furthermore, if a mobile phone is stolen, then the user should have their SIM-card blocked as soon as possible. Once a SIM-card is blocked, your BHIM mobile account cannot be opened from that mobile phone.
How to use the BHIM mobile app?
A user can install, register and use the BHIM mobile app by following these steps:
- Download the BHIM app from the Google Play Store or the App Store on your smartphone for Android and iOS users,
- Once installed, open the BHIM mobile app where you will be prompted to select a language.
- After a language is chosen, the app will verify your mobile number and your handset. This completes the registration process.
- Upon successful registration, the user will be provided with a default UPI ID.
- The user can then select their bank account. The app automatically detects your bank account details using your phone number, so you do not have to enter or verify these details.
- The user must then set their UPI PIN by providing the last six digits of their debit card and its expiry date.
- The app will then show three options: send money, or request money, or scan and pay.
- The user can transact using any of the above options. To send money, the user must enter the beneficiary’s virtual payment address (VPA) (this is the same as the BHIM UPI ID), or phone number, or account number and IFSC code, or Aadhar number.
What is the BHIM UPI ID and how to create one?
As detailed in section 13, the BHIM UPI ID is provided to a user upon successfully registering their account in the BHIM mobile app. The BHIM UPI ID and the virtual payment address are the same ID and allow users to send and receive funds through the app.
How to set up or change your UPI PIN?
After registering their account on the BHIM mobile app, the user is provided with a UPI ID and prompted to select their bank account. Upon selection of the bank account, the user can set their UPI PIN. To set their UPI PIN, the last six digits of your debit card and its expiry date must be entered into the app.
Once the UPI PIN has been set, the user has the option to change this PIN at any time. To change the PIN, the user has to follow these steps:
- Select the bank account option on the BHIM app.
- Choose the option “Reset UPI PIN”.
- Enter the last six digits and the expiry date of the user’s debit card.
- Bank OTP is generated, which is auto-detected on your mobile phone.
- The user must enter the new UPI PIN.
- The user must re-enter the new UPI PIN to confirm.
- The new UPI PIN has been set.
What is BHIM UPI limit?
There is a limit to the number of transactions which can be made through BHIM. The maximum amount which can be transferred using BHIM is limited to Rs. 20,000 per transaction. In a single day, a BHIM user can only transfer a maximum of Rs. 40,000 using a single bank account. BHIM allows its users a maximum of ten transactions per day. If a user has made ten transactions in a day, then the user must wait at least for twenty-four hours before they can make another transaction.
What to do when the registration on BHIM fails?
The registration process on BHIM may fail, and the user will get a “UPI Registration Failed” error on their app. To avoid such an error, the user should ensure the following:
- Their mobile number is registered with their UPI-enabled bank account.
- Their internet connection is working properly.
- They have enough network balance to send an SMS to verify your phone number.
- If the user has a dual SIM phone, ensure that you select the correct SIM card from which to send the message. If this error persists, then switch your SIM cards in their slots and try again.
Is BHIM available on desktops or laptops?
Currently, BHIM is only available as a mobile app for Android or iOS smartphones. BHIM is not available on desktop or laptop computers.
What methods are available on BHIM to send money?
If a user wants to send money for rent using BHIM, then he can use any of the following details of the beneficiary:
- Mobile number of the beneficiary landlord which has been registered with UPI;
- Aadhar number of the beneficiary landlord which is linked to their bank account;
- Virtual Payment Address (VPA) of the beneficiary landlord which has been registered with UPI;
- Account number and IFSC Code of the beneficiary’s bank account.
- Scan the QR code of the beneficiary.
Once a user enters any of the above details and the amount to be transferred, the payment is complete, and the recipient receives their money instantaneously.
Is BHIM available for all handsets and operating systems?
Currently, BHIM is only available on mobile handsets which run on Android v. 5 and up or iOS v. 8 and up.
How can BHIM be used if the user’s bank does not participate in the UPIsystem?
The BHIM mobile app uses the UPI payment system to make transactions. If the user’s bank does not participate in the UPI payment system, then the user cannot use BHIM to make transactions.
How to use the BHIM app to pay utility bills?
To pay utility bills on the BHIM mobile app, the user must follow these steps:
- Login to the BHIM mobile app using UPI PIN.
- Select the “Bill Pay” option on the app.
- Choose the “Biller Category” – which is electricity/gas/DTH/water/telecom.
- Select the “Biller” to be paid.
- Enter your customer and relevant bill details.
- User shall be shown the bill amount.
- Select the “Pay” option.
- Input the UPI PIN again for confirmation.
The BHIM app will then pay the bill, and you should get a confirmation for the same.
What is the maximum amount allowed for bill payment?
The maximum amount which can be transferred using BHIM is limited to Rs. 20,000 per transaction, which includes payment of bills. In a single day, a BHIM user can only transfer a maximum of Rs. 40,000 using a single bank account. BHIM allows its users a maximum of ten transactions per day.
Can BHIM be used for real estate transactions like purchasing property or paying rent?
As mentioned above, the BHIM mobile app has a limit of Rs. 20,000 per transaction and a maximum amount of Rs. 40,000 can be transferred from the app in a single day. Keeping these figures in mind, if the user’s real estate transaction amount can be covered within these limitations, then BHIM can be used for such a purpose.
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