Budget 2017: What Arun Jaitley can do to breathe fresh life into BHIM
BHIM, the government aided mobile wallet, seems to have lost its steam after its initial prime ministerial marketing campaign. With the union budget round the corner, and with all the enthusiasm around cashless and digital money, finance minister Arun Jaitley might throw in some benefits for BHIMunion budget Updated: Jan 24, 2017 11:30 IST
BHIM, the government supported mobile wallet, seems to have lost its steam after its initial prime ministerial marketing campaign.
With the union budget round the corner, and with all the enthusiasm around cashless and digital money, finance minister Arun Jaitley might throw in some extra linkages and benefits for BHIM.
“In the budget, Jaitley might waive-off the transaction fee for payments made through the BHIM app,” sources in the government, said.
The finance minister, the sources added, can also give special benefits to merchants for using the app for transactions – though the extent of benefits on BHIM is not yet clear.
BHIM’s launch was untimely. It missed the early bus of cash crunch after the demonetisation announcement – that was the time when other mobile wallets such as Paytm, MobiKwik and SBI Buddy added users in hordes. Paytm alone added 50 million. BHIM’s last disclosed numbers were 10 million total downloads.
Named after Bhimrao Ambedkar, the father of the Indian constitution, BHIM’s role is to remove cash transactions in day-to-day business, help buyers pay to merchants at the click of a button.
Based on the Unified Payment Interface (UPI), the application is linked with a bank account, and directly debits or credits the account during a payment. Once payment gateways, e-commerce firms and banks, adopt UPI, BHIM can be used to make payments regardless of any tie-up.
The government is also considering linking BHIM with the unique identification number, Adhaar, which will allow signing-up on the app without the requirement of documentation or biometric, and also send and receive payments on the Adhaar-linked bank account directly.
More than 100 crore people in the country have Adhaar, and many of these are linked to a bank account.
More than in cities, where Paytm and MobiKwik are well penetrated, BHIM is for the hinterland. “It is for the small merchant, farmers in far-flung areas, and tribals,” Modi said during the launch.
Meanwhile, Adhaar is slowly becoming the backbone for the government to pay subsidies, pensions, NREGA card holders their wages, scholarships or any other kind of government-linked payments.
Once BHIM is linked with Adhaar, the money in the Adhaar-linked bank account will be available for BHIM users, and make retail purchases, and get further benefits.
BHIM will also help in reducing the cost of a cashless payment, and the government can plough that money back to the app user as an incentive. ““We are working on a mechanism to bring down transaction costs… We are speaking to all stakeholders,” sources quoted Reserve Bank of India governor Urjit Patel saying at an internal meeting, HT had reported.