After demonetization, the government has launched BHIM app in order to promote digital economy and to fight against black money. But this step doesn’t prove out to be fruitful since it has failed to attract consumers. Therefore, Banks and the National Payments Corporation of India have asked the finance ministry to increase the referral bonus to attract users. The government has considered their requests and may announce revised incentives soon.
Currently, if any person refers BHIM to another, gets ₹10 as an incentive and the person who starts using it gets ₹25 as an initiating cashback. The BHIM app enables payment transactions using the Unified Payments Interface (UPI). Users can make instant bank-to-bank payments and pay and collect money using their mobile phone numbers or virtual payment addresses.
The chunk of UPI transactions comes from BHIM and PhonePe. According to the reports, 45% of the transactions are happening through BHIM and 40% is being driven by Phone Pe. While only 15% share of UPI transactions has been enforced by the thirty-six banks together, which is very low.
UPI clocked 10.2 million transactions in June, a fivefold increase since December. It had a share of only about 1% of the total electronic payment system transactions. According to AP Hota, MD, NPCI, “We are short of our target of 40 million transactions for the first quarter via UPI”.
In the first three months of this financial year, UPI has only clocked 26 million transactions. Bankers said they have apprehensions over the ability to reach the target of 25 billion transactions.