While wallet services brought about a payment revolution with customers paying their DTH, mobile and internet bills through mobile wallets, Reserve Bank of India (RBI) is now trying to replicate that success for all utility payments. According to RBI, India’s top 20 cities generate R6,223 billion in bill payments every year with about 70% being cash or cheque transactions. Till date, 33 companies including banks such as Axis Bank, IndusInd Bank and wallet services such as PayTM, Mobikwik and PayU have been granted licences to function as operating units under the Bharat Bill Payment System (BBPS).
National Payments Corporation of India (NPCI), the organisation behind RuPay and Unified Payments Interface, has been granted the authority to work as a Bharat Bill Payment Central Unit. NPCI will work as a standard setting body and as a medium to connect multiple billers and agents through various operating units. It launched its pilot with select banks and payment services last month and is ready for a full roll-out.
What is BBPS?
It is an integrated payment platform, i.e., a one-stop shop for all bill payment needs. BBPS offers interoperable and accessible bill payment services to customers through a network of agents, allows multiple payment modes and provides instant confirmation of payments. It is a single platform which works either online or through a window and provides anytime, anywhere payment option to customers. More important, it is bank agnostic, so you can go to any of the affiliate banks or service providers that have been provided with a licence by RBI to make all your payments without even having an account with that bank or service provider.
How it differs from mobile wallets?
While PayTM and some other wallets have already been offering these services through their online channels, their coverage has been limited to major Tier I and Tier II cities. BBPS can make this a national phenomenon, such that a person in a rural area can also pay her bills via the BBPS operating units, be it a bank or an online service provider. Also, once fully operational, it would provide access to payments via ATMs, MPOS machines, business correspondents and agents allowing full integration of services even in the remotest of regions.
What about charges?
While the NPCI does not specify any charges for these services, in order to make it viable, banks may charge a fee. Wallet providers have been luring customers with discounts, but the whole model might pivot to banks charging a convenience fee.
What more to expect?
While the system in its launch phase is offering payments for utilities like water, gas, electricity, telephone and DTH bills, it will ultimately integrate schools, colleges, insurance, mutual funds, credit card bill payments, tax payments, payouts to charity, one-time payments and a whole gamut of services. BBPS may come to integrate every service available under the sun for the ease of customers. Moreover, as the system evolves one can also expect new payment options. For instance, UPI at some point of time will offer payment options.