Neha BaruahStarting July 1, all credit card payments through third-party apps must route through the Bharat Bill Payment System (BBPS), as mandated by the Reserve Bank of India (RBI). This restructuring will impact credit card holders of major Indian banks, who will need to use BBPS-integrated platforms like CRED, PhonePe, Amazon Pay, and Paytm for bill payments.
Understanding the Bharat Bill Payment System (BBPS)
Managed by the National Payments Corporation of India (NPCI), the BBPS aims to expedite the payment process for businesses and consumers. It supports a variety of payment methods, both physical and digital, facilitating quick and seamless transactions across a network of banks, apps, and websites. Users can choose from multiple payment options to suit their preferences.
Importance of BBPS in RBI’s Recent Directives
The RBI’s introduction of BBPS aims to enhance the consistency and security of credit card payment processing in India. By directing all third-party app payments through BBPS, the RBI seeks to create a more regulated and transparent environment, reducing risks of unauthorized data access and financial errors. This consolidation simplifies monitoring and streamlines transactions.
BBPS Integration Progress
As of the implementation date, twelve Indian banks, including prominent ones like SBI, ICICI Bank, and Kotak Bank, are active members of the BBPS network. However, major banks such as HDFC Bank and Axis Bank are still working towards integrating their systems with BBPS.
Integration Challenges
The slow integration by some banks is due to the significant investments required to overhaul existing systems serving multiple third-party apps. These platforms also enable banks to gather extensive customer data for personalized services. Transitioning to BBPS demands considerable resources and changes to internal banking operations, which may not yield immediate profits.
Neha Baruah
Izaz Ahmed
Asik Syed
