Previous Year Question
With reference to digital payments, consider the following statements.
BHIM app allows the user to transfer money to anyone with a UPI-enabled bank account.
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?
Only 1
Only 2
Both 1 and 2
Neither 1 nor 2
Correct Answer: A
Detailed Solution
Statement 1 is correct. BHIM stands for Bharat Interface for Money. It was developed by the National Payments Corporation of India as a digital payment application based on the Unified Payments Interface.
Through BHIM, a user can send money to a UPI-enabled bank account using a Virtual Payment Address, UPI ID, mobile number, account number and IFSC or a QR code. The sender and recipient are not required to hold accounts in the same bank.
UPI enables instant fund transfers between accounts maintained with different banks. The system is generally available round the clock and is used for both person-to-person and person-to-merchant payments.
Statement 2 is incorrect. A chip-PIN debit card does not involve four independent authentication factors. Generally, the physical card or its embedded chip is a possession factor, while the PIN is a knowledge factor. Thus, a chip-and-PIN transaction is essentially an example of two-factor authentication.
Several details such as the card number, expiry date, CVV and PIN may be requested, but the number of separate credentials is not treated as the number of independent authentication factors. Multiple pieces of information of the same type may fall under the knowledge factor.
In BHIM-UPI as well, the registered mobile number and device binding provide a possession-related factor, while the UPI PIN is a knowledge factor. Therefore, it is incorrect to state that a chip-PIN debit card has four factors while BHIM has only two.