Industry professionals believe the UPI and BHIM channels may become more popular as the use of quick response (QR) codes become more widespread.
The volume of transactions made through the Bharat Interface for Money (BHIM) app fell on a month-on-month (m-o-m) basis for the third straight month in February, with the share of the app in the Unified Payments Interface (UPI) pie slipping to under 2%.
As per data released by the National Payments Corporation of India (NPCI) on Friday, users of BHIM made 12.83 million payment transactions, down 8% M-o-M, worth `5,624.21 crore, down 9% M-o-M, during February.
The total number of UPI transactions during the same month was 674.19 million and their value added up to `1.07 lakh crore. The rate of M-o-M growth in UPI transactions was a muted 0.2%, while the value of transactions actually dropped 3% from its January level.
BHIM was developed by the NPCI and launched on December 31, 2016 at the peak of the demonetisation exercise. The launch of the app was aimed at pushing the use of UPI as a channel and non-cash payments in general. While it had a promising start, ratcheting up volumes by a million every month in its early days, it began to lose steam in mid-2017, with the likes of Google Pay (then Tez), Paytm and PhonePe taking away share from it.
Part of the reason for BHIM transactions tapering may also have been the scaling down of cash backs and other incentives for transactions made through the app in July 2018, months after they were bundled into the app. The NPCI had told banks that cash backs for BHIM transactions would be restricted to new users and incentives for merchants accepting UPI payments would be withdrawn altogether. The notification was issued amid reports that incentives were being misused.
Industry professionals believe the UPI and BHIM channels may become more popular as the use of quick response (QR) codes become more widespread. Dilip Asbe, managing director (MD) and chief executive officer (CEO), NPCI, recently said there are 50-60 million unique consumers transacting on UPI and a proportionate acceptance infrastructure must be developed. “On the supply side, most QR codes are proprietary ones. So unless there is ubiquitous two QRs — one is Bharat QR and the other is BHIM QR – we are not going to see much effect on cash in circulation. So we need to have 10-20 million ubiquitous QR codes,” he observed.