Government promoted mobile app BHIM can provide a perfect platform for smaller banks to enter the retail payments space without developing their own customer-facing apps.
BHIM, which is being developed by the National Payments Corporation of India (NPCI) and is promoted by the government as a parallel UPI app, can turn out to be an ideal white-label solution, say bankers.
This allows even smaller banks to enter the retail payments space by allowing their customers to download BHIM to access various services like merchant payments and bill payments offered to them by the bank through its own tie-ups and partnerships.
"I think of BHIM as a meta-UPI switch, a basic infrastructure beyond which banks can develop a layer of services and merchant payment options in order to enhance customer usage, loyalty and stickiness," said Rajeev Ahuja, head of strategy at RBL Bank. Questions sent to NPCI remained unanswered.
"BHIM is a minimum white-label application, beyond which banks can offer additional stacks of experiences unique to our customers or perhaps sometimes we could also develop our own co-branded payment application," said Mrutyunjay Mahapatra, chief information officer, SBI.
While BHIM will bring in more innovations in the UPI-led payments technology, bankers feel that there is bound to be some consolidation in the payments space as a lot of experimentation is happening to make India a less cash society and many redundant payment applications can get subsumed within BHIM.
"With BHIM being there, the pressure on smaller banks to come up with their own customer-facing UPI apps has drastically reduced and they can get their customers to use BHIM for basic transactions," said Bhavik Hathi, managing director, Alvarez and Marsal, a Mumbai-based consultancy firm.
Another big concern that has emerged around BHIM is regarding the resolution of payment disputes and complaints since NPCI is not a customer-facing organisation. Problems which customers face with regards to BHIM are being raised with banks who do not have the means to address such problems on their own.
It is in situations like these that third-party payment providers like Trupay and others get into the picture. Trupay has tied up with various banks to allow customers to use Trupay app and access UPI through the partner banks and also pay at merchant locations that have tied up with Trupay.
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