Get ready for single-window payment for all bills

RBI's proposed centralised bill payment system is set to revolutionise how you pay your bills. This is the way it will work

Are you still paying your bills the old way? Still writing cheques and having these delivered to your biller for clearance? Or standing in long queues and making cash payments? All that will change soon. When the new system of bill payment mooted by the Reserve Bank of India (RBI) goes on stream, users will be able to pay bills - of all kinds - by the click of a button or anywhere through other third-party vendors.

RBI is in the process of setting up an Indian Bill Payment System, a centralised payment gateway to make all kinds of bill payments smooth. The payments process will be instituted through a GIRO (government internal revenue order)-based system, where all the billers such as utility payments, taxes, university fees, examination fees and insurance premiums, among others, come on a common platform that will enable payers to make payments directly to billers.

Bill payers typically have to make multiple bill payments by either setting individual online accounts on billers website, using cards, visiting billing companies or dropping cheques, which can be cumbersome and time-consuming. Besides, billers have to set up multiple options for accepting all kinds of payment methods. This makes it difficult to keep tabs on bills that are paid, both for the billers and the payers.

PAYMENTS AT YOUR FINGERTIPS

• RBI is setting up Bharat Bill Payment Services, a not-for-profit organisation which will list all the billers in one place
• Individuals can make all the payments of all billers from one place anywhere in the country.
• Billing for various services such as subscriptions and educational institutions will also be allowed
• Individuals will not have to remember passwords and payment due dates of various billers; at the same time the history of payments will be updated automatically

A committee set up by RBI called the GIRO Advisory Group has given a report which proposes to set up two organisations - the Bharat Bill Payment Services and the Bharat Bill Payment Operating Units.

Says Pramod Saxena, founder and managing director, Oxigen Services, a payment solutions company: "The new entity will have connectivity to all billers through a single standardised platform. We don't have to use multiple interfaces. This will increase bill payments online and make it real time, a very small amount today."

This entails setting up a centralised infrastructure, by bringing all the billers and banks to the new bill platform. This new organisation will be created on the lines of the National Payments Corporation of India, which handles inter-bank transfers.

The new centralised bills system allows all bills to be listed at one location, where you can go and pay. This is a part of the ongoing effort of the central bank to improve the payment and settlement systems as laid out in the Payment Systems Vision (2012-15).

RBI wants to develop this system because a lot of bills are paid through cash or cheques at billers' locations, while bill payment centres are not easily available in rural areas. There is also no single website where all bills can be accessed and paid.

How it will help
At the moment, to pay your bills, you have to visit multiple vendors such as insurance or telephone companies and multiple agencies. In the new system, people will have access to all utilities and all the bill payment operating units. You can make payments to all utilities and education institutions across the country through a single platform.

Paying online at individual billers' websites is tedious - you have to remember the website addresses and different passwords. Besides, you also have to provide your bank account or credit card details to multiple billers, which increases your risk online. In the new bill pay service, you can pay all your bills with one user name and one password.

Some banks have tied up with individual bill payment gateways where you can pay many different billers through your individual bank account. Facilities such as Bill Pay, have listed various billers. However, most of these billers are either telephone, insurance or utility companies. Educational institutions, universities, maintenance bills, school fees, and subscriptions are not a part of the system, especially where bills are paid once a year or so.

Paperless and hassle-free
Further, banks bill for such payment facilities. Fees vary between banks, depending on the number of billers, which could range from a fixed monthly fee to variable fees. One mode of payments banks encourage is setting up of an electronic clearance system or ECS, where the biller directly debits your bank account of the charges towards your bill.

Says Saxena: "For payments of bills in Delhi, you have only in 20-30 outlets. A lot of service points can open that are serviced by us, accepting cash towards bill payments. One can also pay bills across cities. And, many other different types of billers can come online as this system progresses. The bulk of the bill payments happen in cash, and you can bring all of these into this new system."

The new system will also help you and the billers to keep things electronically safe and essentially reduce hassles. While how the consumer will be charged is not known, more and more types of payments could be added. It will also help keep a history of your payments to various billers and tabulate your payments for future reference. Your credit and payments history will be easily available to you, while it will reduce your paperwork.