BHIM and BharatQR are here. Are you digital yet?

India is slowly but surely walking on the path of replacing a part of its cash payments with digital money


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The 40-plus have a new parlour game. (The first line is also a gentle warning to the 20-somethings to ignore this piece—you’ve been there, done that.) I walk into a room with some 40-plus people one evening and see them looking intently at their phones. Every now and then, someone exclaims: “It works!”, “I got a 100!”, “Hey, mine is not working. What did I do wrong?” “Bhaisaab, give my 100 bucks back!” This is the 40-plus playing with digital apps that push and pull money using smartphones.

I know a group who spent an entire evening pushing a 100 bucks from one account to another using the BHIM (or the Bharat Interface for Money) app. Don’t have BHIM app? Go download it; it’s now available on your Apple App Store as well.

Making a game out of something is the best way to learn and India is slowly but surely walking on the path of replacing some of the cash payments with digital money. It is still a habit to pull out the wallet, especially for petty cash, but we are increasingly remembering to pull out the phone instead. Specially when there is the problem of getting your change back, it is great to pull out the phone and say, “No change, no problem.”

There are 36 banks live on BHIM (you can see the list here: http://www.npci.org.in/BHIM_Live_Members.aspx) and unless you bank with one of the few banks that are not, you just need to download the app, spend some time figuring it out and you can join the digital money world. Go book your address—yourname@upi—fast. I got quite a kick from seeing my own unique barcode on the app.

But it is still difficult to fully make do without the physical wallet because of the credit cards we carry in it. That too will change soon because earlier this week, on 20 February, the National Payments Corporation of India (NPCI), Visa and MasterCard came together and launched BharatQR, a quick response code (that black square with more black squares inside, which you scan before doing a Paytm transaction), which will allow us to use our credit, debit and prepaid cards without worrying about issues of interoperability. 

What it means is this: if you have scanned the barcode of Paytm at a vendor and made a payment, you know that your MobiKwik app will not work on the Paytm barcode. These are called interoperability issues: when the use of a payment gateway is restricted to a particular firm or app. BharatQR is the common interface for Visa, MasterCard and RuPay platforms that does away with this problem of different QR codes for different firms. You will now see just one QR code.

In the back end, different banks, payment wallets, and card companies are configured to figure out where the money is coming from and where it is going. For example, you could use your Visa credit card issued by the State Bank of India to pay a vendor by scanning the BharatQR code at a restaurant. The process of pushing out the QR codes to retail locations will take some time, but it will get there. Currently, there are 15 banks that are on the BharatQR platform. You can see the names of these banks here: bit.ly/2kDRwlw.

How much can you pay using BharatQR? Your bank’s transaction limit is the limit for this. For BHIM, the limit is Rs10,000 per transaction with a maximum cap of Rs20,000 per day. There is a limit of 20 transactions per account in a day (http://www.npci.org.in/documents/BHIM-User-Manual.pdf). Each bank will have its own rules on the limits. But it is an evolving space and we may see industry standards in the future. So look carefully at your transaction limits before you download and use these apps.

The implementation of these payment gateways at a national level is the next step in an ambitious plan that has seen political will (across governments), a nimble regulator and an aggressive and competent aggregator, or umbrella organisation, in the NPCI. Blocking out the cynics is a good idea when you read about what we have achieved in a short time in this space.

I have been following the transformation of cash to digital for the past few years and have told you to hold on before jumping in.

The pace of change has been fast and every few months, innovation, and technology and regulation changes made it difficult for a busy professional to experiment with this (unless you’re a geek and enjoy messing with your phone, as some of us do). 

Should you jump in yet? I think so.

The backbone of technology is in place. The interoperability issues are getting sorted. And now there are two products you can use—BHIM and BharatQR—to carry out your transactions. The clutter in the market earlier made it difficult for us to recommend one app over the other, but with two big-bus industry standard vehicles, you can now come on board. But do remember, it is still early days. There are still many glitches. All the banks are still not on the platforms. The transactions don’t go through sometimes, and BharatQR is yet to be fully tested. The experimenters must download and begin using. I have. But I’d wait some more time before I encourage my dad to get on it.

And do remember to put a chain on your phone and attach it to your wrist. Don’t lose that phone.

Monika Halan works in the area of consumer protection in finance. She is consulting editor Mint, consultant NIPFP, and on the board of FPSB India. She can be reached at monika.h@livemint.com

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