With reference to digital payments, consider the following statements:
- 1.BHIM app allows the user to transfer money to anyone with a UPI-enabled bank account.
- 2.While a chip-pin debit card has four factors of authentication, BHIM app has only two factors of authentication.
Which of the statements given above is/are correct?
Answer & explanation
Answer: (a) 1 only
Only statement 1 is correct: BHIM is a UPI-based app for direct bank-to-bank transfers. Statement 2 fails because a chip-and-PIN card does not use four factors of authentication; UPI, and so BHIM, uses two.
- ✓ 1. BHIM was launched in December 2016 to enable digital payments using UPI, and it allows direct bank-to-bank transfers from a mobile phone. Because UPI is interoperable, the receiver only needs a UPI-enabled bank account.
- ✗ 2. The official description of UPI says it uses two-factor authentication: the registered mobile phone and the secret UPI PIN. A chip-and-PIN card also works on two things, the card itself and its PIN, so it does not have four factors.
Remember · BHIM is the NPCI's UPI app (launched December 2016). UPI uses two-factor authentication: the registered mobile device plus the UPI PIN.
Sources
- PIB Factsheet: UPI, Transforming India's Payment Landscape (Ministry of Finance) ↗ “The BHIM application was launched in December 2016 to enable digital payments using UPI. It allows users to make direct bank-to-bank transactions through mobile devices. … Uses two-factor authentication and end-to-end encryption to enhance transaction security.”
Question and answer: UPSC's official GS Paper I (2018, Series A) — paper ↗ · answer key ↗. Explanation: Minimalist IAS, checked 30 Sept 2026 (how we verify). ·