BHIM Can Trump E-Wallets With Referral & Cashbacks

By | February 27, 2017

BHIM Can Trump E-Wallets With Referral & Cashbacks

Since its launch, the Bharat Interface for Money application (BHIM) has witnessed a huge number downloads and popularity with the public.

Apart from a few technical glitches in the initial days after its launch, BHIM has delivered as per expectations. After the demonetisation, people have been transacting heavily through e-wallets and BHIM too has fit right into the mobile transaction space.

Additional Reading: BHIM – Straightforward And User-Friendly

When we compare BHIM with other mobile wallets, there are some areas where it has significant advantages. But at the same time, there are areas where it needed to catch up.

BHIM vs Mobile Wallets

BHIM gained quick popularity because it offers the facility of instant transfers from one bank to another. For example, if you hold a bank account with SBI and want to transfer an amount to ICICI, it can be easily done with the BHIM app. But with a wallet, you can’t make a transfer from Wallet A to Wallet B. There is no interoperability. You can only transfer or receive funds from users of the same wallet.

BHIM now offers the facility to make transfers through Aadhaar Pay. You need to mention the Aadhaar details of your payee to send money to the payee’s Aadhaar-linked bank account. You do not get this facility with wallets.

Additional Reading: Bhim To Be Integrated With Aadhaar

Wallet companies offer discounts and offers via merchant tie-ups. For some products, you also get a cashback amount. BHIM lacked these special offers at the start. But with the announcement in the latest Union Budget, BHIM too will now have some rewards for its users: referral bonuses and cashback schemes for merchants. Though wallet companies have a strong foothold in the offers and discounts place, once BHIM provides similar offers, it will most likely pose challenges to wallets.

The other thing that BHIM lacks now, in comparison to wallets, is integration with the Credit Cards. Most mobile wallets allow you to load funds through Credit Cards. This way, users enjoy an extra 30 or more days of an interest-free period. Regular and disciplined use of Credit Cards help improve a user’s Credit Score. Since BHIM needs you to spend only from your bank account, there is no element of credit.

Will Referrals And Cashback Prove To Be Gamechanger?

The referral code will likely work this way – if you refer the BHIM app to another person and that person starts using BHIM through your referral, you’ll be awarded with cash incentives. Though the exact referral framework has not yet been declared, this is the way it works for other referral schemes.

The cashback scheme would target the merchants; the merchants would be incentivised with cashback for transacting through the BHIM App. This will promote non-cash transactions and the merchant may also pass on some cashback benefit to the customers to promote their sales.

BHIM’s gain may not immediately signal the end of e-wallets. Customers may continue to use both UPI applications and wallets. What could be seen as BHIM’s greatest achievement is the creation of a government-backed project that may bring more users into the digital payment system. This may be good for all the ecosystem as a whole, even e-wallets.

For now, it looks like people are continuing to download and use the BHIM app and the number of users are growing.

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