BHIM App

The BHIM App (Bharat Interface for Money) is a mobile-based digital payment application developed to enable fast, secure, and interoperable electronic transactions through the Unified Payments Interface (UPI). It occupies a central position in India’s banking and financial ecosystem by promoting cashless transactions, strengthening digital payment infrastructure, and supporting the formalisation of the Indian economy. The application has emerged as a key public digital platform for advancing financial inclusion and efficiency in retail payments.
The BHIM App is developed and operated by the National Payments Corporation of India and is designed to facilitate direct bank-to-bank transactions without intermediaries. It supports peer-to-peer as well as peer-to-merchant payments and is available in multiple Indian languages, enhancing its accessibility across diverse population groups.

Background and Launch

The BHIM App was launched in December 2016 as part of India’s broader Digital India initiative and the national push towards a less-cash economy. Its introduction followed the development of the UPI platform, which was created to simplify interbank fund transfers and improve interoperability within the banking system.
The app gained rapid adoption during the post-demonetisation period, when reducing dependence on physical cash became a policy priority. As a government-backed digital payment solution, BHIM helped build trust among users who were new to electronic transactions and encouraged widespread acceptance of UPI-based payments.

Operational Framework of the BHIM App

The BHIM App functions on the UPI infrastructure, enabling real-time fund transfers between bank accounts using a smartphone. Users link their bank accounts to the app and generate a virtual payment address (VPA), which allows transactions without disclosing sensitive banking details.
The main operational features include:

• Instant bank-to-bank money transfers
• QR code-based merchant payments
• Full interoperability across participating banks
• Secure authentication through UPI PIN

These features ensure speed, transparency, and convenience for individuals, businesses, and service providers.

Role in the Banking System

Within the banking system, the BHIM App acts as a common digital interface connecting multiple banks through a unified platform. It reduces reliance on traditional banking channels such as branches and ATMs, thereby lowering transaction costs and improving operational efficiency.
The app also encourages active use of bank accounts, which is essential for sustainable financial inclusion. Regular digital transactions generate reliable financial data, supporting better credit assessment, customer profiling, and innovation in banking products and services.

Contribution to Financial Inclusion

Financial inclusion is a core objective of the BHIM App. By offering a low-cost, user-friendly, and interoperable payment solution, the app enables participation in formal financial systems across urban, semi-urban, and rural areas.
The BHIM App facilitates:

• Easy access to digital payments for smartphone users
• Inclusion of small merchants, street vendors, and self-employed individuals
• Reduction of entry barriers for first-time digital payment users

Its multilingual interface and simplified transaction process have helped overcome linguistic and technological barriers, particularly among new adopters of digital finance.

Impact on the Indian Economy

At the macroeconomic level, the BHIM App contributes to the formalisation and transparency of the Indian economy. Increased adoption of digital payments reduces cash circulation, limits unaccounted transactions, and enhances traceability of financial flows. This supports improved tax compliance and more effective economic governance.
The app has also played a significant role in supporting micro, small, and medium enterprises by enabling low-cost acceptance of digital payments. This integration of small businesses into the formal economy strengthens entrepreneurship, improves income visibility, and supports employment generation.

Advantages of the BHIM App

The BHIM App offers several advantages in the context of banking and finance:

• Interoperability across banks and regions
• Security ensured by the regulated UPI framework
• Cost efficiency for both users and merchants
• Transparency through real-time transaction records