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?

Statement 1 is correct. BHIM is built on the Unified Payments Interface, run by NPCI. Any customer with a UPI-enabled bank account can send money to another UPI-enabled account using a virtual payment address or mobile number, so the transfer is not restricted to one bank or a fixed list of payees.

Statement 2 is wrong. Both systems use two factors. A chip-pin debit card needs something you possess (the card and its chip) and something you know (the PIN). BHIM needs the registered mobile device (possession) and the UPI MPIN (knowledge). The claim of four factors for the card and two for BHIM has no basis.

• Option A is correct, since only statement 1 holds.
• Options B, C and D fail because statement 2 is incorrect.

Core concept: the three categories of authentication (knowledge, possession, inherence) and the interoperable architecture of UPI. For Mains, this connects to financial inclusion, digital payment security and NPCI's role. UPI has expanded since 2018, with features such as UPI Lite and newer authentication options, so check current rules, but the two-factor structure of both systems remains the core point.

Trap: Candidates count screens or steps instead of authentication categories. Ask whether each factor belongs to a different category before you count.