In An Attempt To Foster Cashless Economy, NPCI Launches Bharat Bill Payment System Pilot Project

National Payments Corporation of India (NPCI), the organisation that governs the retail payment sector has launched a pilot project for theBharat Bill Payment System (BBPS) across the country with 26 operating units.

BBPS is the Reserve Bank of India-mandated system which will provide interoperable bill payment services to customers. In the first phase, BBPS will cover repetitive payments for everyday utility services such as electricity, water, gas, telephone and direct-to-home (DTH).

A P Hota, Managing Director and CEO, NPCI said, “In due course, BBPS, would link all major billers in the country with all their consumers which will simplify bill payments electronically. Currently, the volume of bills being paid by cash is so large that even if 25% of the bills get paid electronically, the impact would be visibly enormous.”

To allow customers to use this unified bill payment platform, RBI has devised a tiered structure of operation for the system. The BBPS will have two components: Bharat Bill Payment Central Unit (BBPCU) andBharat Bill Payment Operating Unit (BBPOU). The BBPCU will be a central controlling body and will connect all the billers.

The RBI has authorised the NPCI to act as BBPCU for the system, under which operational, technical and business standards for the system will be NPCI’s responsibility. Meanwhile, the operating units will be responsible for facilitating bill payments, both online and offline.

Customers can use any payment method they prefer like Net Banking, credit/debit cards or e-wallets. They can even pay in cash if paying at an offline outlet. Eventually, the scope of this payment system can also be expanded to municipal taxes, school fees and more. It will also allow consumers to send and receive money through popular social channels like Facebook, WhatsApp, Twitter, SMS and email.

For the pilot edition, the participating BBPOUs are:

Bank BBPOUs: AP Mahesh Co-operative Urban Bank, Axis Bank, Gopinath Patil Parsik Janata Sahakari Bank, HDFC Bank, ICICI Bank, IDBI Bank, Indian Bank, IndusInd Bank, Kotak Mahindra Bank, Punjab & Maharashtra Co-operative Bank, Punjab National Bank, RBL Bank, State Bank of India, The Saraswat Co-Op Bank, TJSB Sahakari Bank, and YES Bank.

Non-Bank BBPOUs: Avenues India Pvt. Ltd, Common Service Centre, Euronet Services India Pvt. Ltd, IndiaIdeas.com (Billdesk), ITZ Cash Card Ltd, One97 Communications Ltd (Paytm), Oxigen Services India Pvt. Ltd, PayU Payments Pvt. Ltd, Spice Digital Ltd, and TechProcess Payment Services Ltd.

In August 2015, RBI awarded payments bank licences to entities including Airtel M Commerce, Aditya Birla Nuvo, Vodafone m-pesa, Tech Mahindra, National Securities Depository Limited (NSDL), Fino PayTech, and Paytm. Also, in May 2016, the RBI granted PayU India and Oxigen  in-principle approvals for operating as Bharat Bill Payments Operating Units.

While many of these entities already provide multi-utility bill payment services, now all of them can operate under a single unified platform. This step is taken towards making India a cashless economy. It is also expected to make transactions easier, facilitate micro-payments and instantly recognise transactions.