What's the story?
Bharat Interface for Money (BHIM), a government-backed payment application, is set to enter the e-commerce space.
according to economic timesthe move is aimed at challenging the dominance of Google Pay and PhonePe in India's digital payments market.
Developed by the National Payments Corporation of India (NPCI), BHIM will use the Open Network for Digital Commerce (ONDC) platform to expand its e-commerce reach.
Strategies to increase your user base and market presence
BHIM plans to launch this initiative through a separate division with the aim of expanding its user base.
This strategy involves offering a number of products and services such as food and beverages, fashion items, groceries, and apparel.
The move comes amid increased downloads of BHIM due to regulatory restrictions on Paytm, another major player in the space.
To strengthen BHIM's market position, NPCI has appointed Rahul Handa, former executive vice president of strategic initiatives at ONDC, as BHIM's chief business officer.
NPCI’s efforts to improve BHIM user experience
Since its founding in 2016, BHIM has struggled to gain traction due to limited marketing resources and low consumer awareness.
To address this, NPCI plans to launch a BHIM 2.0 project aimed at improving user experience and accelerating adoption through strategic partnerships like ONDC.
However, industry experts warn that relying on ONDC alone may not be enough to change established consumer habits and preferences.
NPCI's diversification strategy to reduce trading concentration
To reduce the risks associated with over-reliance on dominant players such as Google Pay and PhonePe, NPCI is encouraging investment in new third-party payment apps on the Unified Payments Interface (UPI).
This diversification strategy aims to reduce the concentration of transactions on these platforms.
According to reports business standardaround 25% or 5 million to 7 million of Paytm's merchant base has started migrating to competing platforms, including BHIM, creating a significant opportunity for BHIM to expand its reach.
