In a strategic move to increase its market presence in the Unified Payment Interface (UPI) transactions, the Bharat Interface for Money (BHIM) app is set to join the government-supported Open Network for Digital Commerce (ONDC). This initiative aims to broaden BHIM's utility by venturing into the ecommerce sector through a specialized division, as reported by ET citing undisclosed sources.
With this integration, BHIM app users will gain the ability to purchase food and beverages, groceries, fashion, and apparel directly through the ONDC platform. "The integration into ONDC is expected to significantly boost the adoption of the BHIM app, offering a competitive edge against prominent players like Google Pay and PhonePe," a source explained.
As of now, Inc42 has reached out to ONDC for further comments on this development and will update the story accordingly upon receiving a response.
Since its inception in 2016 by the National Payments Corporation of India (NPCI), BHIM has lagged behind in UPI transaction volumes compared to its competitors. In March 2024, while PhonePe led with 650.2 crore UPI transactions, Google Pay followed with 506.1 crore, and Paytm recorded 123 crore transactions. In contrast, BHIM processed only 3 crore transactions, according to NPCI data.
The concentration of UPI transactions among a few players has sparked concerns, highlighted by a February report from a parliamentary panel. The report stressed the need for supporting indigenous fintech solutions to create a more balanced competitive landscape.
Moreover, in March, NPCI conducted a meeting with various digital payment startups and enterprises to discuss strategies for promoting the growth of smaller third-party application providers (TPAP).
On another front, ONDC continues to expand its reach by integrating large corporations and startups into its network. It is currently poised to include news media platforms, with Dainik Jagran reportedly nearing full integration. Additionally, major ecommerce platforms like Flipkart and Amazon are exploring opportunities to establish ONDC storefronts on their home pages, signifying a broad acceptance of the ONDC framework.
