Netbanking switch to provide better visibility into transactions: NBBL CEO

NBBL's Banking Connect aims to streamline netbanking by standardising bank-aggregator ties, giving regulators better visibility and improving settlement, success rates and grievance management

A new netbanking switch, Banking Connect — developed by NPCI Bharat BillPay (NBBL) — is expected to standardise netbanking partnerships and give the central banking regulator greater visibility into transactions and grievance management, said Noopur Chaturvedi, the entity’s managing director and chief executive officer (CEO).

  Additionally, as an entity processing bill payments, business-to-business (B2B) transactions and now operating a netbanking switch, NBBL is targeting 1 billion monthly transactions in the next three to four years, up from the current 260 million.

 

How does the new netbanking switch improve interoperability?

 

Bharat Connect, the netbanking switch launched this year, provides interoperability between Reserve Bank of India (RBI)-licensed payment aggregators (PAs) and different banks.

 

“There was no real-time visibility to the regulator on how many transactions are happening, if a customer had a grievance, its resolution and in how many days. There was no transparency around which segments were the netbanking transactions happening... All of this needs to be systematically monitored and wherever possible, controlled,” Chaturvedi said at a media roundtable.

 

In the legacy netbanking model, every payment aggregator had to forge individual partnerships with each bank to process transactions. As aggregators multiplied, banks were left managing a complex web of integrations.

 

As a result, collating data from each participant in the ecosystem would take at least a week’s time to monitor and supervise.

 

What benefits will Banking Connect bring to banks and merchants?

 

Banking Connect simplifies this by serving as a central switch, enabling interoperability through a single connection instead of multiple bilateral tie-ups.

 

Chaturvedi explained that the switch further enables better success rates for merchants, ensures same-day settlement and standardises error codes for any examination or dispute resolution.

 

“Banks have control in terms of which categories they want to quickly disable. Earlier it used to be a one-on-one conversation with multiple PAs that they were working with. So, turning payments off for a category becomes simpler,” she added.

 

The option to disable payments can enable banks with faster control over risky categories such as real money gaming or crypto-based payments, among others.

 

She added that the entity will do the “heavy lifting in terms of operations, reconciliation, grievance tracking, standardisation and monitoring of the entire system”.

 

Which banks and PAs are already live on the switch?

 

Chaturvedi said that Banking Connect was live with banks such as HDFC Bank, ICICI Bank, SBI, Yes Bank, AU Small Finance Bank and Federal Bank.

 

Payment aggregators such as Infibeam Avenues (CCAvenue), PayU, Pine Labs, Cashfree Payments, Razorpay, HDFC Bank Smart Gateway, Zoho, Easebuzz, Juspay, OPEN and SBI ePay were live with the switch.

 

More banks and payment aggregators are expected to implement the switch over the next few weeks.

 

How significant is netbanking in India’s payments ecosystem?

 

Netbanking, a preferred mode of payment for high-ticket transactions, records over 300 million monthly transactions with a cumulative value of over Rs 6 trillion.

 

In 2024, the RBI approved the implementation of interoperability for netbanking transactions aimed at addressing delays in the actual receipt of payments by merchants.

 

NBBL is a wholly owned subsidiary of the National Payments Corporation of India (NPCI).