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Bharat Interface for Money (BHIM), developed by the National Payments Corporation of India (NPCI), was among the first Unified Payments Interface (UPI) facilitator apps in India, but its adoption remained muted with lower transaction volumes. In contrast, Walmart-backed PhonePe, Google Pay and Paytm, which were also launched in the early years of UPI, gained leadership position in overall transaction volumes.
After years of existence, though, the BHIM app is finally getting higher traction. In June this year, the volume of UPI transactions on the BHIM app rose to 79.58 million, sharply higher than the 25.52 million transactions seen a year ago. In fact, UPI volumes on the BHIM app remained in the range of 16-25 million between June 2018 and June 2024. So, what’s driving the surge of UPI transactions on the BHIM app?
Government push
BHIM’s first app version was launched by Prime Minister Narendra Modi in December 2016, a month after he announced the demonetisation of ₹500 and ₹1,000 banknotes. The idea was to push digital payments in a country where cash remained king and to curb unaccounted banknotes.
While the app was able to attract a sizeable number of UPI users in the initial year, it could not compete against rivals like PhonePe, Paytm or Google Pay. Poor UI/UX experience and frequent technical glitches drove users away from the BHIM app to the other deep-pocket, tech-savvy players. The BHIM app was then revamped with added features and improved UI in 2019. Yet, transaction volumes greatly lagged those of the other large UPI mobile apps.
Recognising the need to enhance user experience, BHIM 3.0 app was launched earlier this year. The latest version has new user-friendly features such as cashback, discounts, spend analytics, split expenses, ‘refer friends & family’ option, hyper-personalisation and ‘family mode’. To be sure, banks and payment apps already provide a chunk of the newly added features of the BHIM 3.0 app.
Innovative solutions
The ‘family mode’ in BHIM 3.0 allows users to onboard family members, track shared expenses and assign specific payments. UPI Circle is a delegation feature, allowing a primary user to authorise a secondary user to transact from their account with approval, real-time notifications and limits.
Interestingly, BHIM is also among the top UPI platforms used for initial public offer (IPO) mandates, where a user’s UPI ID can be used as a payment option when subscribing to IPOs on the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE).
Lalitha Nataraj, CEO of NPCI BHIM Services Limited (NBSL), told businessline that ever since the company was hived off as a new subsidiary, it has wanted to focus heavily on understanding user behaviour and preferences.
“We did some amount of user research because, till some time ago, BHIM had a big role to play in ensuring that use cases or the new innovations are nurtured, stabilised and then handed over to the ecosystem. Now, we also have a role to play in users enjoying our app without any glitches,” she said.
As BHIM was among the first major UPI apps, Nataraj says it had a “huge early-user base”. However, the users did not return to the app as they were not aware of newer updates or that the app was evolving gradually.
User survey
Accordingly, before launching the revamped BHIM 3.0 app, the company conducted user research and surveys across cities. “We asked users about the services that are expected from BHIM, whether they will return to the app and whether they understand BHIM as an app,” she said. After taking into account public feedback, Nataraj said the BHIM 3.0 app was launched with improved user experience, day and night modes, and the ‘balance check’ option right at the top of the app. The app also sends prompts to users to top-up their UPI Lite account or link their RuPay credit card with their UPI IDs.
“We have a very huge early-user base. But just, for example, if you tried using the app in 2023 and faced two failed transactions, you will not come back to the app. So, to attract them back to the app, we have to provide them offers (discounts and cashback),” she said.
“We started doing this when we were sure that our app is resilient enough to ensure there are no failed transactions. We now want to grow across categories, including P2P (person-to-person), P2M (person-to-merchant), bill payments, mandates and IPO. We don’t want to be skewed towards any one category that provides certain incentives but, when the incentives stop, the customer goes away,” she said.
Going ahead, BHIM 3.0 could explore launching features such as loan services, insurance referrals, savings options, travel and transit and DTH/cable TV recharge options, like the other top UPI apps do, for further growth of the UPI ecosystem, experts said.
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Published on July 21, 2025
