Is BHIM-UPI discriminatory ?

UPI or Unified Payments Interface is a powerful new inter-bank payment system in India which makes it easy and seamless to pay from one bank account to any other bank account in India. All one needs to do is to download an app that supports UPI , link one’s bank account and then you’re ready to make payments.

The beauty of UPI is that any App -bank or non-bank ( called 3rd party PSP ) company like MobiKwik, Flipkart , Google can implement it as per the standard compliance requirements ( non-banks need to get a bank sponsor) and differentiate on the basis of user experience. Many banks integrated UPI on their banking apps and many non-bank digital companies like Google, PhonePe & Whatsapp have integrated UPI and found good success in last 18 months. Even the Govt has sponsored creation of a special app called BHIM which has found good traction thanks to superb promotions by the Hon’ble Prime Minister himself, so much so that UPI became BHIM-UPI.

MobiKwik also recently launched BHIM-UPI on its App and seen rapid adoption ( 5 Million UPI Accounts is first 2 weeks alone and growing ! ). MobiKwik has also committed to scaling UPI to millions of small merchants that form part of our payments network.

But here’s the catch.

In order to further the promotion of BHIM-UPI, NPCI ( the body that runs the UPI infrastructure) came up with an incentive plan where the incentive is funded by the central Govt.

The original circular is here — https://www.npci.org.in/sites/default/files/circular/Circular27-UPI-Cashback-Referral-Bonus-Scheme.pdf and

the updated one is here

This incentive plan is meant for promotion or adoption of BHIM-UPI but the user incentives are only paid if you use the BHIM app or any Bank app but not applicable if you use any non-bank app ( also called 3rd party PSP). So here’s the thing — you will make 750 Rs month if you’re an ICICI bank user and use the ICICI bank app (or the special BHIM App) to make UPI payments but in case you found the UX of MobiKwik ( or PhonePe or Google Tez or Whatsapp) better, you won’t get any cashback even though you end up using UPI and the same bank account. Its incredible that both private and public sector bank apps get the benefit of Govt promotions but startup apps ( which follow same level of compliance) & which are attracting much valuable FDI, creating new technology & thousands of new jobs are denied this opportunity. Net impact is that Govt is funding installation of bank apps at the cost of non-bank apps whereas both are promoting BHIM-UPI.

What’s incredible is also no one’s aware or talking about this blatant discrimination. I sincerely request PMO to take notice and correct this anomaly in the interest of Digital India.