NPCI Unveils BHIM App Licensing Model To Help Banks Launch Their UPI Apps

The National Payments Corporation of India (NPCI) on Wednesday (November 9) rolled out the open source licensing model for its BHIM app.

Under this, the NPCI will licence the source code of its BHIM app to regulated entities which do not yet have a Unified Payments Interface (UPI) app of their own.

It was not immediately clear if any financial element is involved in the deployment of the licensing model.

BHIM is a payments app developed by the NPCI for making UPI payments in a simple and easy way.

“Presently, many banks do not have their own mobile banking app and are missing out on extending the benefits of the country’s largest retail payment system – UPI, to their customer base. NPCI intends to bridge this gap by extending all the readily available features of UPI to these entities through this BHIM App licensing model which will be an economical and quick-to-market solution for these entities,” NPCI said in a statement.

The initiative will enable these fintech players to launch their own UPI app, without spending large amounts on development and research. Besides, the licensing model will also enable entities to reduce time, efforts, and costs during the course of scaling up their UPI infrastructure. 

The NPCI intends to boost financial inclusion and scale digital payments across the country with the initiative.

The NPCI said that the new features and updates launched on BHIM app will subsequently be extended to entities onboarded under the licensing model. This, the digital payments body said, would incentivise these fintech players to continue using the model and UPI payments. 

The Financial Inclusion Pitch

This follows a series of incentives and initiatives announced by the NPCI to spur digital payments across the country. Last month, the payments body launched a collaborative initiative to scale up strategic partnerships with payments-oriented fintech entities. Earlier this week, reports emerged that the NPCI had sought ‘reasonable incentivisation’ of UPI amid a raging debate on imposition of levies on UPI payments. 

In September, the NPCI launched a slew of niche products such as RuPay credit card on the UPI network, low ticket size focused solution UPI LITE, and Bharat BillPay Cross-Border Bill Payments.

Meanwhile, the body has also ramped up efforts for internationalisation of UPI payments systems. It has signed a slew of pacts with central banks and third-party entities for acceptance of UPI in countries such as France, Singapore, UAE, among others. In October, Finance Minister Nirmala Sitharaman also said that the government was working with many countries to increase the adoption of government-backed fintech products such as RuPay cards and UPI.

UPI has emerged as one of the biggest technological innovations from the government’s stable. It has seen rapid adoption owing to its ease and a robust tech stack, and has been accepted heartily by banks and fintech players.

As described in RBI’s Payments Vision 2025, the government now plans to focus on taking digital payments to the hinterlands and underserved populations. With UPI123Pay, the NPCI has introduced digital payments to feature phones. On the other hand, the RBI’s sandbox initiatives have led to the rise of startups such as ToneTag that have built audio-based payments solutions.

In what best describes the scale of the digital payments system, UPI processed 731 Cr transactions worth INR 12.11 Lakh Cr in October 2022.