Words: VN Balakrishna & Siddharth Iyer

With cash-hungry India still coping with the demonetisation shock of last November 8, Prime Minister Narendra Modi soon launched BHIM, the Aadhaar-based mobile payment application known as Bharat Interface for Money on December 30. As Unified Payment Interface (UPI) it allows paying money from smart phones without entering details like credit card/IFSC code or using net banking. All one needs is a smartphone. A modified BHIM is on way to facilitate cash withdrawal by mere swipe of fingertips.

Like Aadhaar, BHIM is a biometric and can hasten technological revolution bringing onto its digital bandwagon the poor left out in race of development. It is innovative as the Direct Bank Transfer meant to plug loopholes in welfare schemes. BHIM already had seen 1.20 crore downloads by January end.

With Narendra Modi at Centre(stage) there is a paradigm shift in political ethos with development mantra for waging war against poverty.

Urban development cannot be at the cost of rural poor who have to be integrated into national mainstream. Digitalisation of economy is a path breaking effort that is set to change interface between haves and have-nots apart from making banking reach doorstep of unbanked.

India’s growth story mostly mixed confined to urban areas and urban elite. With prime minister trying to integrate Bharat (rural) into India (urban) through cashless digital world a laggard economy is revving up.

Indian Postal Payment Banking system too targeting those below poverty line by helping them access bank accounts. Postal network through postal banks can be a game changer in penetrating remote areas. Over one lakh Bank-Mitras or agents have been appointed in addition to over 2.5 lakh Gram-Dak Sevaks acting as banking correspondents for rural areas.

Switchover to cashless or “less cash” lifestyle by launching innovative steps like BHIM are among the several measures to usher digital access to hitherto untouched groups. It helps further the consumer awareness so that a cashless economy can account for every single penny.

Maybe this could be the magic bullet Indian economy was waiting for and prime minister could in fact be clearing the cobwebs of socialist past that led to haphazard growth with poor remaining at the bottom of the pecking order.

Aadhaar pay

BHIM paved way for another biometric called Aadhaar Pay. Meant for merchants it is a cashless mode of payment without mobile phones or ATM cards. All that is need is Aadhaar card linked to bank account and investment of `2,000 for a biometric reader. Nor does it involve basis point leverage by banks.



Sceptics question the revolutionary digital concept arguing most of India’s population remains unbanked.

Some contest even the electronic biometric system saying it can neither be 100% foolproof as even a minor fault can lead to security breach. Obviously, these are not economic problems to worry.


BHIM was developed by National Payments Corporation of India (NPCI) in association with JUSPAY, a Bengaluru-based mobile payments startup. Thought the app was not designed by any one man JUSPAY’s Vimal Kumar and Ramanathan had a greater role to play bringing this concept to fruition so that Prime Minister Narendra Modi could launch it by December end.

NCPI role assumes significance because it is the umbrella organisation for all retail payment systems. It was set up in 2006 at the behest of the Reserve Bank of India.

However, security was a major concern and for nearly two months till the eve of the launch dozen men of Lucideus Tech, a New Delhi based company, were sweating it out to plug security loopholes.

“We literally worked all night for nearly two months exclusively on the app,” said Saket Modi, CEO, Lucideus.


Technical upgradation is a continuous process security concerns can always be addressed and parameters redefined.

Cash-less society can never be achieved overnight merely switching over to it.

With smart phone technology things could change and a cashless society concept became feasible and economical. For those living in the past it is a question of “change or perish.”And with online transactions being per se transparent government can check payments and prevent black money accumulation.

Removing old `1,000 and `500 notes and putting a cap on withdrawals from banks and ATMs was not an easy task as never had Independent India attempted such a feat. With smart phone technology things could change and a cashless society concept became feasible and economical.

For those living in the past it is a question of “change or perish.”And with online transactions being per se transparent government can check payments and prevent black money accumulation.

Yet the painful interregnum was a bitter pill for the nation to swallow though the country desperately needs a new economy that is free from past ills like black money and corruption.

Certainly this wasn’t an easy task.

Those unbanked — be it owing to illiteracy or poverty — are bound to learn cheaper mode of payment transfer. Once the DBT concept prevails with new accounts being created for rural poor the cash-less mode will be simply an extension to the DBT.

In any case as things stand the poor are not real beneficiaries of the erratic welfare system of cash payment that vanishes into the hands of middle men.

Be it accessing food grains or kerosene or any other amenities cash had way of disappearing before it reached the poor beneficiaries kept waiting and wanting.

Prime Minister Modi has taken the proverbial bull by its horns and charted a new roadmap for a long-suffering deprived sections of Indians.

Prime Minister Modi’s “technological revolution” is turning into economic empowerment of poor.

Initiatives like Stand-Up India with `490 crores being allocated for empowering three lakh SC/STs and women entrepreneurs through recently launched National Schedule Caste and Schedule Tribe (SC/ST) hub and the Zero defect and Zero effect (ZED) scheme for Micro, Small and Medium Enterprises (MSMEs) India is waiting for the much needed change.