What is BHIM Mobile UPI App? And How Does it Work?



The year 2017 saw the heavy implementation of digital payments in India. This made the year 2017 a milestone in the history of Indian economy. Post the demonetization drive in 2016, cashless transactions were the closest one could attempt in order to transfer money, check for balance details or pay for expenses. Loan Singh’s digital lending platform was ever ready to provide financial support to salaried individuals during the demonetization drive.

To further enhance the effect of digitalization in Indian economy, an interface was set up that could umbrella in all multiple banks into one mobile application. The Unified Payments Interface hence can be called the driving force for the mobile application called BHIM.


Unified Payments Interface

Unified Payments Interface, or UPI, is a single window mobile payment system created by National Payments Corporation of India (NPCI). It is regulated by the Reserve Bank of India which facilitates the instant fund transfer between two bank accounts, over a mobile phone network. Any bank can use UPI by integrating it into their existing smartphone applications. Banks can also develop their own UPI app.

The objective of UPI is to offer architecture to facilitate online payments – thanks to the smartphone boom. It is expected to improve instant payments via mobile – providing security and convenience. This security is to be achieved using facets such as Aadhaar integration, secure credential capture, 1-click-2-factor authentication (one-click transaction which is authenticated at two levels), phishing protection and Virtual Payment Addresses.

UPI thrives to make the application as simple to use as making a call from your phone. UPI needed to be innovative in such a way that both the payer and payee stay on their smartphone, taking advantage of newer authentication services and enhancement in mobile devices. UPI needs to be scalable to billion users and also be adoptable by the Indian population.

Anyone who uses a smartphone, and operates a bank account, can benefit from UPI either for transferring or receiving money. Currently one needs a bank’s IFSC code to be an identifier of your financial information, but with UPI all you need is a virtual address – that is unique and conceals your financial information.

UPI is built over the Immediate Payment Service (IMPS) facility for transferring funds using a virtual payment address, account number, mobile number, Aadhaar and MPIN (Mobile banking Personal Identification Number). These are required for customer verification & payment confirmation. UPI is a system designed to provide a simple, secure and convenient ‘single interface’ to enable sending and receiving of money using smartphones, via a ‘single identifier’. The identifier can be a virtual address like an email ID, mobile number or Aadhaar.

UPI enabled banks are those which facilitate fund transfer through the UPI payment system. These banks let their bank accounts to be linked with the UPI based app. If you, as a bank customer, link your account to the UPI app, the bank would then be your UPI enabled bank. UPI consolidates and integrates multiple systems with varying service levels into one nation-wide platform for all retail payment systems.



The ‘Bharat Interface for Money’ mobile application was developed by the National Payments Corporation of India and is based on United Payment Interface (UPI). It was launched by Prime Minister Narendra Modi on 30th December 2016. The main purpose of BHIM is to facilitate e-payments directly through banks.

BHIM App Process

  • Install the app on your smartphone
  • Register your bank account on the app.
  • Set up a pin for UPI which will act as your login credentials.
  • Your mobile number acts a payment address.
  • You can register all your bank accounts onto the app.
  • To transfer money to someone, select your bank account, choose the mobile number of the recipient from your phone, scan the QR code and send the money.
  • You can also check for your account balance

Features of BHIM

  • Fast, secure, reliable, convenient
  • Registration of multiple bank accounts
  • The per transaction limit is Rs.10000 and per day limit is Rs.20000
  • Still not widely used in rural India
  • Not much awareness created for the app
  • A few banks do not support it yet
  • Available on both – Google Play Store and Apple iTunes
  • Simplest and fastest among the available UPI apps
  • Great user experience in accessing services such as Send and Request money, change UPI PIN, generate QR codes, etc.


BHIM in 2018

BHIM has been promoted as a UPI based application to compete with bank led UPI apps such as Axis Pay, SBI Pay along with non-bank UPI players like Flipkart’s PhonePe or Google’s Tez. The current rebranding makes them BHIM SBI Pay, BHIM Axis Pay and BHIM RBL Pay. The coming year could see more banks in India display BHIM as a prefix to their respective UPI applications. This will remove any confusion among app users. This will also aid users to embrace UPI as a single means of payment for small value transactions.

The past year saw the BHIM UPI App allow more than 8 million transactions per month around November of 2017. BHIM is currently live on close to 60 banks and has seen over 20 million in downloads. All this is set to gradually increase as 2018 wears on.


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