 "Anytime, anywhere: Paying bills just got easier")
Paying for your investments, fees and bills just got easier. Instead of going to the individual websites of utility providers, mutual funds, insurance companies, the municipal corporation and school and colleges, you can now log onto your bank account and pay all of them at one place.
Banks have now started going live with the Reserve Bank of India’s (RBI) Bharat Bill Payment System (BBPS). The platform allows customers to pay multiple bills from a single platform without the hassle of visiting multiple websites or issuing individual cheques. At present private banks are offering the service on their net banking page, but they plan to make it available on their mobile apps soon.
Besides banks, many wallets, payment gateways, finance companies and technology firms have received in-principle approval from RBI to launch this service. As these payers innovate to distinguish their offerings from each other, you can expect add-on services such as alerts on bill generation, reminders as the due date comes close, and so on.
For those who prefer to pay by cash, they will soon be able to use this facility at a nearby bank branch or even a kirana store. At present, there are around 124 billers whose payments can be made using the service.
Bill payment is a major component of retail payment transactions in the country. There are a large number of billers, who provide a variety of payment options to their customers. According to information available on the RBI website, the top 20 cities generate Rs 6.22 lakh crore in bill payments every year. Over 70 per cent of these transactions are still carried out through cash or cheques. In addition, the present bill payment infrastructure is largely biller-specific in terms of modes of payment accepted and channels supported.
Anytime, anywhere
Bharat Bill Payment System collates bills from various utility services and allows you to pay them through any of the participating banks, mobile wallets and other intermediaries. You also get multiple payment options, such as by cash or cheque at agent outlets, internet banking, debit cards, credit cards, mobile wallets, National Electronic Funds Transfer (NEFT), Immediate Payment Service (IMPS) and even ATM kiosks.
The system also sends you an instant confirmation of payment on receiving the payment. BBPS is based on the concept of “anytime anywhere”: you will be able to pay your bills from any part of India at a time that is convenient to you.
To make the system interoperable, each service provider is given a unique Biller ID. All that you need to do is provide your own Customer ID, verify details, and the payment is done.
At present BBPS allows you to pay your electricity, telephone, water supply, gas and Direct-to-Home (DTH) bills. However, its scope will be gradually expanded in the future to include other payments like school and university fees, government taxes, insurance premiums, mutual fund investments and even credit card bills.
Although there is a provision of interchange fee chargeable at the biller and/or customer end, NPCI is yet to explicitly state what those charges will be. Banks and other operating units may charge a convenience fee to make their services viable.
Multiple benefits
BBPS has been designed as a two-tiered system with a Bharat Bill Payment Central Unit (BBPCU) managing and operating the system and Bharat Bill Payment Operating Unit (BBPOUs) servicing the customers. National Payment Corporation of India (NPCI) functions as the BBPCU, setting all the necessary technical and operational standards along with undertaking clearing and settlement activities between the various BBPOUs.
Single gateway: The platform allows you to pay bills from any biller at a single point. Unlike the present scenario, you do not need to have an account with a particular bank or a mobile wallet in order to pay a bill of a particular utility service provider. You are free to choose any agent outlet, bank or wallet unit to pay your bills.
Wide reach: While mobile wallets such as PayTM, MobiKwik and Freecharge and banks have been offering bill payment services, their coverage was limited mostly to tech-savvy customers in major cities. BBPS comes with additional payment options, such as bank branches, ATMs, business correspondents and agent outlets for non-tech savvy customer segments.
Higher reliability: With a centralised operation and clearing system managed by a government agency, customers will have greater trust and confidence about the safety and reliability of their transactions.
Better grievance handling mechanism: BBPS has a standardised complaints management system for handling customer grievances. You can register your complaints about transactions and service quality at either the NPCI website or at any of BBPOU websites or outlet/branch of agents. Unresolved complaints can be further escalated to the Dispute Management System under the BBPS.
Discounts: Until now, bill-issuing utilities had to enter into bilateral contracts with multiple banks and wallets in order to receive bill payments. Alternatively, they had to deploy their own staff to receive customer payments. All these options made bill collection an expensive and time-consuming process for them. Now that all the utilities will be connected through one system, billers will just need to connect through one operating unit. This will reduce their cost of bill collection. Many service providers could offer a discount of 2-5 per cent for payments through this platform.
Charges versus benefits
The platform’s success will mainly depend on how fast utility services (both from the public and private sector), state and municipal authorities embrace digitisation. Also, if your bank or agent charges a fee for using this platform, many customers may not adopt it.
The introduction of BBPS system is another step towards transforming India into a less cash society. With BBPS, even those who are not internet savvy can now pay digitally. This system can create a huge impact in the payments landscape as more billers come to the platform. In the future, credit bureaus will also be able to use BBPS data to evaluate the credit quality of customers. They will be able use their payment history to generate a more holistic score for borrowers.
Key benefits
Banks have now started going live with the Reserve Bank of India’s (RBI) Bharat Bill Payment System (BBPS). The platform allows customers to pay multiple bills from a single platform without the hassle of visiting multiple websites or issuing individual cheques. At present private banks are offering the service on their net banking page, but they plan to make it available on their mobile apps soon.
Besides banks, many wallets, payment gateways, finance companies and technology firms have received in-principle approval from RBI to launch this service. As these payers innovate to distinguish their offerings from each other, you can expect add-on services such as alerts on bill generation, reminders as the due date comes close, and so on.
For those who prefer to pay by cash, they will soon be able to use this facility at a nearby bank branch or even a kirana store. At present, there are around 124 billers whose payments can be made using the service.
Bill payment is a major component of retail payment transactions in the country. There are a large number of billers, who provide a variety of payment options to their customers. According to information available on the RBI website, the top 20 cities generate Rs 6.22 lakh crore in bill payments every year. Over 70 per cent of these transactions are still carried out through cash or cheques. In addition, the present bill payment infrastructure is largely biller-specific in terms of modes of payment accepted and channels supported.
Anytime, anywhere
Bharat Bill Payment System collates bills from various utility services and allows you to pay them through any of the participating banks, mobile wallets and other intermediaries. You also get multiple payment options, such as by cash or cheque at agent outlets, internet banking, debit cards, credit cards, mobile wallets, National Electronic Funds Transfer (NEFT), Immediate Payment Service (IMPS) and even ATM kiosks.
The system also sends you an instant confirmation of payment on receiving the payment. BBPS is based on the concept of “anytime anywhere”: you will be able to pay your bills from any part of India at a time that is convenient to you.
To make the system interoperable, each service provider is given a unique Biller ID. All that you need to do is provide your own Customer ID, verify details, and the payment is done.
At present BBPS allows you to pay your electricity, telephone, water supply, gas and Direct-to-Home (DTH) bills. However, its scope will be gradually expanded in the future to include other payments like school and university fees, government taxes, insurance premiums, mutual fund investments and even credit card bills.
Although there is a provision of interchange fee chargeable at the biller and/or customer end, NPCI is yet to explicitly state what those charges will be. Banks and other operating units may charge a convenience fee to make their services viable.
Multiple benefits
BBPS has been designed as a two-tiered system with a Bharat Bill Payment Central Unit (BBPCU) managing and operating the system and Bharat Bill Payment Operating Unit (BBPOUs) servicing the customers. National Payment Corporation of India (NPCI) functions as the BBPCU, setting all the necessary technical and operational standards along with undertaking clearing and settlement activities between the various BBPOUs.
Single gateway: The platform allows you to pay bills from any biller at a single point. Unlike the present scenario, you do not need to have an account with a particular bank or a mobile wallet in order to pay a bill of a particular utility service provider. You are free to choose any agent outlet, bank or wallet unit to pay your bills.
Wide reach: While mobile wallets such as PayTM, MobiKwik and Freecharge and banks have been offering bill payment services, their coverage was limited mostly to tech-savvy customers in major cities. BBPS comes with additional payment options, such as bank branches, ATMs, business correspondents and agent outlets for non-tech savvy customer segments.
Higher reliability: With a centralised operation and clearing system managed by a government agency, customers will have greater trust and confidence about the safety and reliability of their transactions.
Better grievance handling mechanism: BBPS has a standardised complaints management system for handling customer grievances. You can register your complaints about transactions and service quality at either the NPCI website or at any of BBPOU websites or outlet/branch of agents. Unresolved complaints can be further escalated to the Dispute Management System under the BBPS.
Discounts: Until now, bill-issuing utilities had to enter into bilateral contracts with multiple banks and wallets in order to receive bill payments. Alternatively, they had to deploy their own staff to receive customer payments. All these options made bill collection an expensive and time-consuming process for them. Now that all the utilities will be connected through one system, billers will just need to connect through one operating unit. This will reduce their cost of bill collection. Many service providers could offer a discount of 2-5 per cent for payments through this platform.
Charges versus benefits
The platform’s success will mainly depend on how fast utility services (both from the public and private sector), state and municipal authorities embrace digitisation. Also, if your bank or agent charges a fee for using this platform, many customers may not adopt it.
The introduction of BBPS system is another step towards transforming India into a less cash society. With BBPS, even those who are not internet savvy can now pay digitally. This system can create a huge impact in the payments landscape as more billers come to the platform. In the future, credit bureaus will also be able to use BBPS data to evaluate the credit quality of customers. They will be able use their payment history to generate a more holistic score for borrowers.
Key benefits
- Service available on internet banking, but will become available on their mobile apps soon
- Mobile wallets, payment gateways, fintech companies will also offer this service soon
- Those who prefer to pay by cash will be able to use this facility at a nearby bank branch or kirana store. Other options include ATMs and business correspondents
- 2-5 per cent discounts may be available to customers using this platform
The writer is CEO and co-founder, Paisabazaar.com
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