BHIM plans to foray into the e-commerce sector through ONDC

On By Vaseline

Next article

A timeline has not been announced

What’s the story

The Bharat Interface for Money (BHIM), a government-backed payment application, will foray into the e-commerce sector.

According to The Economic TimesThe move is aimed at challenging the dominance of Google Pay and PhonePe in the Indian digital payments market.

Developed by the National Payments Corporation of India (NPCI), BHIM plans to use the Open Network for Digital Commerce (ONDC) platform to expand its reach in e-commerce.

Strategy to increase user base and market presence

BHIM plans to launch this initiative through a separate division, with the aim of increasing its user base.

The strategy involves offering many products and services, such as food and beverages, fashion items, groceries and clothing.

The move comes at a time when BHIM downloads are increasing due to regulatory restrictions on Paytm, another major player in the industry.

To strengthen BHIM’s market position, NPCI has appointed Rahul Handa, former executive vice president for strategic initiatives at ONDC, as BHIM’s Chief Business Officer.

NPCI’s efforts to improve BHIM user experience

Since its inception in 2016, BHIM has struggled to gain traction due to limited marketing resources and low consumer awareness.

To address this, NPCI will be launching the BHIM 2.0 project, aimed at improving user experience and driving adoption through strategic alliances such as ONDC.

However, industry experts warn that relying solely on ONDC may not be enough to change established consumer habits and preferences.

NPCI’s diversification strategy to dilute transaction concentration

In an effort to reduce the risks associated with over-reliance on dominant players like Google Pay and PhonePe, NPCI is encouraging investments in new third-party payment apps on the Unified Payments Interface (UPI).

This diversification strategy aims to reduce the high transaction concentration on these platforms.

As reported by Business standardAbout 25% or 5-7 million of Paytm’s merchant base has started migrating to competing platforms, including BHIM, presenting a significant opportunity for BHIM to expand its reach.