The BHIM app, which is a digital payments application which uses the Unified Payments Interface has received 2 crore (20 million) downloads, Ravi Shankar Prasad, the Minister of Electronics and Information Technology told Parliament, earlier this week. This was during Zero Hour, and he added that there have been close to 50 lakh (5 million) transactions on the BHIM App, worth Rs 1500 crores (around $235.75 million at current rates).
This statement comes a week after the NPCI had announced that the BHIM App had received 16 million downloads. The NPCI owns and operates BHIM, and perhaps the Minister just rounded off 16 to 20, or BHIM got 4 million more downloads, which is indicative of a hockey-stick growth, because it took almost seven months for it to hit the 16 million mark.
Some data points suggest otherwise, though. For example:
- A KPCB report which was released in May 2017, and lists Indiastack.org and the government of India as sources of information for this, said that the BHIM application received “17MM+ downloads within 2 months of launch (2/17)”. Maybe KPCB didn’t have the correct information, because how could the BHIM app have 17 million downloads in February, and 16 million now? Total number of downloads can’t reduce.
- The NPCI said by March 20th March 2017 that the BHIM app had received 19.16 million downloads. That’s a very specific number. But then the NPCI statement from July 24th said 16 million by end of June. How can the BHIM app have less downloads on July 24th than it did in May and March 2017?
To be fair, we wrote to the NPCI to clarify some of this earlier this week, and they said they’d get back to us, but haven’t. We’ll update in case they clarify. Just to make it clear, here’s the summary of the data that we could find:
- February 1st 2017: 1.25 crore (12.5 million) users. Source: Budget speech
- February 2017: 17 million downloads. Source: KPCB, May 2017, here. (check page 262)
- March 20th 2017: 19.16 million downloads, 5.1 million customers linked their bank accounts. Source: NPCI, here.
- June 30th 2017: 16 million downloads, 4.1 million active users. Source: NPCI, here, dated July 24th 2017.
- July 31st 2017: 20 million downloads, 5 million transactions, worth Rs 1500 crores. Source: Rajya Sabha (end of page 52)
It’s possible that the NPCI data for end of June 2017 was incorrect, in which case the sequence of disclosures would make sense, but the Financial Express reported in July that they reviewed a presentation from NPCI CEO AP Hota, which said that BHIM got:
- Dec 2016: 2.54 million downloads
- Jan 2017: 6.76 million downloads
- Feb 2017: 2.16 million downloads
- Mar 2017: 1.05 million downloads
- Apr 2017: 1.91 million downloads
- May 2017: 0.94 million downloads
- June 2017: 0.55 million downloads
That’s a total of 15.91 million, which, if you account for rounding off, could mean 16 million downloads, which suggests that the June end data is legit.
So which numbers are correct? This is all very confusing.
Update: The NPCI website has data on usage of the BHIM app:
Why is the government funding BHIM?
Well, firstly because taxpayer money is funding BHIM app downloads, and consumers are getting referrals and cashbacks to use BHIM, which has been accounted for in the Union Budget. Now BHIM is a privately owned application: it is run by NPCI, which is a private entity, owned entirely by banks, and is not a public sector unit or agency.
Still, the government announced a promotion scheme for BHIM during the Union Budget, which the Prime Minister launched in April 2017. There were two parts:
- Referral scheme: The PM asked for citizens to get other citizens to download the app: for each person to get at least 125 people to download it. According to the NPCI, “A bonus will be paid to both the referrer and the new user of BHIM (referee) and the referral will be considered successful on completion of minimum 3 unique successful financial transactions totaling to Rs. 50 (to any valid UPI user – “valid receiver”) performed by the referee.” The referee would get Rs 10 and the new user would get Rs 25.
- Merchants get cashback: The NPCI said that “The scheme is to incentivize the users for receiving payments on BHIM App or *99# from their customers. The user will receive merchant cashback on completion of minimum 50 credit transactions of which at least 20 transactions is from valid UPI unique customers including that of BHIM users.” For 50-100 credit transactions per month, they would get Rs 100 at the end of the month, and then subsequently Rs 50 paise per transaction. This would need to be from at least 20 unique customers, with a minimum transaction value of Rs. 25 each, and the cashback to a merchant was up to Rs 300 per month.
In the note, the NPCI says that it “takes the role of implementing agency for the scheme since the BHIM platform is owned and operated by NPCI and uses the transaction data to identify the eligibility and for computation of the cashback.” Update: Another NPCI press release points out that Rs 495 crores is the total outlay for BHIM for a six month period (from April 14, 2017 to October 14, 2017), and this is being administered by the Ministry of Electronics and Information Technology.
To be honest, that kind of promotion is priceless for a private business like the NPCI, but we would still like to know how much money was spent, and many downloads it actually received, and how many users are actually active. We can’t even file an RTI with the NPCI to find out these things, because they’re not a government entity.
Also, even if you ignore the potential conflict of interest in case of a body (NPCI) which owns an exchange (UPI) running a consumer product (BHIM) which competes with other consumer products (many many apps) which rely on the exchange (UPI), the question still remains: why is taxpayer money funding BHIM? From an industry standpoint, especially in case of the startup ecosystem, why would a VC fund a UPI based when the government is funding and promoting BHIM?
My point is that it could have been a promotional scheme for using digital payments in general. Why specifically for BHIM business, and why is the NPCI the implementing agency for this government scheme?
Demonetization photo credit: Aayush Soni
Updates: fixed incorrect date for KPCB report. Added Government budget for promoting BHIM