The central bank has mandated credit card bill payments through Bharat Bill Payment System (BBPS), but only eight of 34 banks are live on the network, causing concern among payment companies.
The Reserve Bank of India (RBI) wants credit card bill payments through third-party payment platforms to stop from next month. The plan is to get all these bill payments through the central bill payment network, the Bharat Bill Payment System (BBPS). But there is a problem — only a handful of banks are live on BBPS presently.
Among the 34 banks that are allowed to issue credit cards, only eight are live on BBPS. So this means that after June 30, the customers of all the other 26 banks will be left to pay their credit card bills through auto debit mandates or net banking. The industry body for payment companies, the Payments Council of India (PCI), has petitioned the regulator for an extension, which is yet to be granted.
The conundrum: The RBI wants credit cards to be brought completely under NPCI Bharat Billpay (NBBL). However, a bunch of large banks like Axis Bank, HDFC Bank, and ICICI Bank have not joined the ecosystem. Only the SBI Card and BoB Card, along with a few private sector lenders, are live on BBPS. For the likes of Cred, PhonePe, and others, they can only process bill payments for BBPS members, which means they stand to lose major transaction volumes from next month.
Rationale: There is a reason why the RBI wants all bill payments to be centralised. This gives the central bank better visibility over payment trends. It also helps them track and arrest fraud. In terms of data, the RBI can bring in more transparency and higher public accountability. But like in many previous instances, the industry participants seem to be struggling to keep pace with regulatory mandates.
