Starting July 1, the Reserve Bank of India (RBI) has mandated that all banks process credit card bill payments through the Bharat Bill Payment System (BBPS). This move is intended to tighten regulations and centralize the bill payment process across India, ensuring a more streamlined and secure system. According to a report by ET, currently, 12 banks are operational on BBPS for credit card bill payments, while major players such as HDFC Bank, Axis Bank, Yes Bank, and IDFC First Bank are still in various stages of integration. This shift will significantly impact how banks and payment apps handle credit card transactions.
The Bharat Bill Payment System (BBPS), developed by the National Payments Corporation of India (NPCI), is a unified platform designed to handle all forms of bill payments across the country. The RBI’s directive to route all credit card bill payments through BBPS aims to enhance security, reduce fraud, and standardize grievance redressal processes. By mandating this change, the RBI seeks to bring a higher level of security and control over credit card transactions. Currently, payments via apps are typically settled through Immediate Payment Service (IMPS) or directly with the bank. The new regulation ensures all such transactions flow through the centralized BBPS network.
From a consumer perspective, the change will be largely seamless. Consumers can currently pay their credit card bills through auto-debit facilities, net banking (NEFT or IMPS), or third-party apps. Post-July 1, while the backend processing will shift to BBPS, the front-end experience for consumers will remain largely unchanged. Services offered by apps like Cred, Amazon Pay, and PhonePe will continue through their individual payment settlement channels until all banks go live on BBPS.
The real challenge lies with the banks that have yet to integrate with BBPS. Once banks like Axis and HDFC go live on BBPS, the backend channels for payment processing will shift, potentially posing initial integration hurdles. However, this transition is expected to streamline and standardize credit card bill payments in the long run, bringing significant benefits to the banking system and consumers alike.
