National Payments Corporation of India (NPCI) is set to spin off its bill payments business into a separate subsidiary, people aware of the development told FE. The company is at present looking for a new chief executive to head the new company, to be called NPCI Bharat BillPay.
Bharat BillPay will be NPCI’s second subsidiary firm after NPCI International Payments (NIPL), which takes care of deployment of the RuPay card scheme and Unified Payments Interface (UPI) outside of India. The Reserve Bank of India (RBI) has approved the transaction. To start with, the new subsidiary will be owned fully by NPCI. Korn Ferry is running the search to find a new CEO for Bharat BillPay.
Sources said that the bill payments platform is being spun off into a separate entity so that it can be managed better at a time when it is in the growth stage. “The systems are growing and this is the right time for NPCI to create a dedicated focus. For them the objective now is to grow Bharat BillPay exponentially without any dependence on NPCI,” said a senior industry executive. NPCI will make a fresh investment into Bharat BillPay, but the quantum of investment could not be immediately ascertained.
All recurring payments are a part of the Bharat BillPay ecosystem. The current live categories include bill payments for electricity, telecom, direct-to-home (DTH), gas pipeline, education fees, municipal taxes and hospitals. During November, the BBPS platform clocked over 22 million transactions worth Rs 3,438 crore, according to data from NPCI’s website.
The move to create a separate entity structure for recurring bill payments could be significant at a time when several large players in the payments ecosystem are gearing up to compete with NPCI by applying for an umbrella entity licence. In order to stave off the challenge from these new players, NPCI last month broad-based its shareholding by allowing small finance banks, payments banks and fintech entities to become shareholders in the organisation. It placed 4.63% of its equity shares worth Rs 81.64 crore with 19 RBI-regulated entities. The new shareholders include Amazon Pay, PayU Payments, PhonePe and One Mobikwik Systems.