Credit card holders from major banks such as HDFC Bank, ICICI Bank, and Axis Bank will no longer be able to pay their bills through popular third-party apps like CRED, PhonePe, Amazon Pay, and Paytm from July 1. This change is due to these banks not being live on the Bharat Bill Payment System (BBPS) platform managed by the National Payments Corporation of India (NPCI).
However, credit card users from eight other banks—SBI, Bank of Baroda, Kotak Mahindra Bank, IndusInd Bank, Federal Bank, Canara Bank, RBL Bank, and AU Small Finance Bank—will not face this issue. These banks are already integrated with the BBPS platform, allowing their customers to continue using third-party apps for bill payments.
The Reserve Bank of India (RBI) has mandated that all third-party credit card bill payments must be routed through NPCI’s BBPS starting July 1. Although apps like CRED, PhonePe, Amazon Pay and Paytm are BBPS members, major issuers such as HDFC, ICICI, and Axis Bank have not yet activated their BBPS services for receiving credit card payments. Out of the 34 banks authorized to issue credit cards, 26 are still pending activation on BBPS.
For now, credit card users of major banks can still make payments via the issuing banks’ websites, net banking, and banking apps. Experts tracking the credit card industry assure that this is a temporary issue and expect all banks to activate BBPS for third-party app payments within a few months.
The Payments Council of India (PCI), representing the payments industry, has requested the RBI to extend the BBPS compliance deadline by 90 days to prevent any service disruptions. Combined, HDFC Bank, ICICI Bank, and Axis Bank have issued over 50 million credit cards in India. One concerned user posted on X (formerly Twitter), “I hope RBI extends the deadline so that bills are not affected. All banks should activate BBPS.”
I hope RBI extends the deadline so that bills are not affected. All banks should activate BBPS.
— Akash Topder (@akashtopder) June 21, 2024
The RBI aims to centralize all bill payments to gain clear insights into payment trends and enhance fraud tracking and control. Currently, third-party apps like CRED settle payments to banks through NEFT/IMPS or direct transfers, a process the RBI finds less reliable than a centralized system.
The RBI’s recent restrictions on peer-to-peer credit card payments via third-party apps follow its discovery of customers using credit cards to pay rents and tuition fees through these apps. The move to centralize payments through BBPS aligns with the RBI’s broader goal of enhancing transaction transparency and regulatory oversight.