NPCI hives off BHIM UPI app as a subsidiary

Mumbai: BHIM (Bharat Interface for Money), the payment app launched by the National Payments Corporation in December 2016 in the wake of demonetisation, has been carved out as a separate subsidiary by the National Payments Corporation of India. The corporation said that move will help develop ’a sovereign digital payment framework’ and take financial inclusion across India and abroad.

The objective behind the carve-out is to promote the domestic app, given that the NPCI is finding it a challenge to enforce a ceiling on market share for UPI transactions at 30%. Currently, Google Pay and Walmart-owned PhonePe dominate the payment landscape with a share of over 85%.

“This development aims to meet the growing demand for digital transactions and evolving market expectations, while keeping pace with innovation and rapidly shifting customer preferences. Additionally, it aims to promote financial inclusion,” said NPCI in a statement.

The new arm will be known as NPCI BHIM Services and will be headed by Lalita Natraj, who was formerly with IDFC First Bank and ICICI Bank. She will be joined by Rahul Handa chief business officer who was formerly part of the team at ONDC (Open Network for Digitial Commerce).

Besides being a standalone payment application, BHIM is offered by NPCI as a white-label payment app for banks that do not have their own payment app but want to retain their branding.According to bankers, considering that NPCI has been constituted as a non-profit company, the subsidiary will have much more flexibility in offering services.

Initially, the BHIM app had dominated the UPI landscape with a 40% marketshare however after the entry of Google Pay (then marketed as Google Tez) and PhonePe the market share began to decline.

Originally, NPCI had decided to provide only the platform and let banks and third parties develop the payment application. However, to hasten the uptake of UPI apps, Prime Minister Narendra Modi launched the government-owned app during the inauguration of DigiDhan Mela in December 2016.


Ready to Master Stock Valuation? ET’s Workshop is just around the corner!