Credit card users can still use third-party apps for repayment: Know more

Customers of banks already live on the BBPS platform can continue using third-party apps for payments

Starting today, credit card holders of major banks including HDFC Bank and Axis Bank will no longer be able to pay their bills through third-party apps such as CRED, PhonePe, Amazon Pay, and Paytm. This is because these apps are not yet integrated with the Bharat Bill Payment System (BBPS) platform managed by the National Payments Corporation of India (NPCI).

BBPS integration for other banks

For those with credit cards issued by SBI, Bank of Baroda, Kotak Mahindra Bank, and others, there is no need for concern. These banks are already live on the BBPS platform, allowing customers to continue using third-party apps for payments.

12 banks that are live on BBPS, as of July 1, 2024 (Note: List of activated banks are updated on a real-time basis)

1) SBI

2) Kotak Bank

3) IndusInd Bank

4) IDBI Bank

5) AU Small Finance

6) Canara Bank

7) Bank Of Baroda

8) Federal Bank

9) ICICI Bank

10) Union Bank

11) Punjab National Bank

12) Saraswat Bank

How third-party payments work

Unlike regular credit card transactions, payments made through third-party apps involve the app itself settling the amount to the bank via NEFT/IMPS or direct transfer. This intermediary step necessitates integration with BBPS to streamline the process.

What is BBPS?

The Bharat Bill Payment System (BBPS) was conceptualised by the Reserve Bank of India (RBI) to offer technological solutions for integrating businesses and customers into a unified payment collection system. Adhil Shetty, CEO of Bankbazaar.com, explains, "This system allows customers to make payments through both physical outlets, such as bank branches and collection stores, and digital channels, including apps and websites across India. It ensures fast settlements and supports multiple payment methods."

RBI's crackdown on credit card payments

The RBI has mandated that all credit card bill payments by third-party apps be routed through NPCI’s BBPS starting July 1. This follows the central bank's crackdown on peer-to-peer (P2P) credit card payments via third-party apps, after discovering instances of customers using credit cards to pay rents and tuition fees through these apps.

Request for extension denied

The payments industry had requested a 90-day extension to allow banks time to integrate with BBPS. However, Business Standard reported that the RBI did not extend the June 30 deadline. Fintech players, affected by this development, were hoping for some relaxation.

Major banks remain unaffected

Major banks are unlikely to face significant issues as their customers can still make payments through the banks’ websites, net banking, and mobile apps. "This is a temporary situation, as all banks are likely to activate BBPS for credit card bill payments through third-party apps within a few months," says Shetty.