Industry experts believe that RBI has expanded the scope and coverage of Bharat Bill Payment System because it could help improve security in bill payments. BBPS refers to the Bharat Bill Payment System, which was launched in 2015 by the Reserve Bank of India to facilitate bill payment across banks. The system uses an e-billing platform to allow users to pay utility bills from their bank accounts and mobile numbers. The ability to pay bills online has made consumers more comfortable with these transactions and, at the same time, has opened up other avenues for them besides just credit card payments.
What is Bharat Bill Payment System?
The Bharat Bill Payment System (BBPS) is a Reserve Bank of India (RBI) approved bill payment service that offers an integrated and interoperable system to pay your bills. You can use it to make almost any bill payment, be it utilities, telecom, insurance premium payments, school fees, or donations. You can also use this system to pay the bill of multiple service providers at a single location. This allows you to make all your payments in a single visit at a designated BBPS agent location.
Who can become a member?
- Any bank (commercial bank, small finance bank, or payment bank) meeting the eligibility criteria specified in BBPS Regulations.
- Any non-bank entity having a net worth of INR 50 crore or more and meeting other conditions as may be specified in the regulations.
- A payment system operator or a payment service provider engaged by any of the above entities
Why was Bharat Bill Payment introduced in India?
BBPS is a one-stop solution for all recurring payments. It will allow customers to make utility bill payments like electricity, gas, water bills, direct-to-home (DTH) service provider payments, telephone bills, etc., through a network of agents in their communities or internet banking or mobile banking services offered by banks.
As the process is electronic and paperless, BBPS will make payments more convenient and efficient than transactions in cash. Payments can be made instantly, and there is no need for customers to maintain an account with each utility service provider to make timely payments.
As BBPS offers multiple payment channels – bank branches, bank business correspondents (BCs), ATMs, internet banking, and mobile banking – it will increase the choice of payment channels available to consumers for making recurring bill payments. Further, banks offer other value-added services like auto-debit facility from customer accounts that can be customised based on the customer’s requirements, such as frequency of payment (monthly/quarterly), last date for payment, etc., that can help consumers manage their finances better.
What is the scope and coverage of the Bharat Bill Payment System?
The BBPS is the RBI conceptualised system driven by the National Payment Corporation of India (NPCI) to facilitate interoperable bill payment services to customers across geographies with certainty, reliability, and safety of transactions.
It is a one-stop platform that enables multiple online and offline payment modes. It will provide instant confirmation of the payment status from the biller’s end. The service will be made available through more than 100,000 Agents/Business Correspondents (BCs), 50+ banks & Non-Banking Financial Companies (NBFCs), multiple payment methods like internet banking, debit/credit cards, IMPS, and Unified Payments Interface (UPI).
As BBPS or scope and coverage of Bharat Bill Payment System offers multiple payment channels – bank branches, bank business correspondents (BCs), ATMs, internet banking, and mobile banking – it will increase the choice of payment channels available consumers for making recurring bill payments. Further, banks offer other value-added services like auto-debit facility from customer accounts that can be customised based on the customer’s requirements, such as frequency of payment (monthly/quarterly), last date for payment, etc., that can help consumers manage their finances better.
Further, billers are facing increasing challenges in managing agent networks as they cannot provide adequate incentives and commissions, due to which agents are unwilling to accept this type of low-margin business. This has led to poor availability of retail touchpoints where consumers can pay their bills resulting in inconvenience. It has also prompted many utility service providers such as Reliance Energy Mumbai and Tata Teleservices Maharashtra Ltd to move bill collections in-house. Shifting recurring bill collection activity out of their core business areas into BBPO. That is exclusively focused on providing such services makes it possible for utility service providers to reduce costs and focus on their core business competencies.
While a biller can consolidate its collection efforts through the Bharat Bill Payment System, customers benefit from paying multiple bills in different categories at the same location. It makes it convenient for customers to make payments as per their convenience and choice of platform. The interoperable platform makes it easy for banks to access and implement, thus expanding the reach and enabling billers to serve a wider customer base through a single payment system. In this Article, We learned about What is BBPS? Why was Bharat Bill Payment introduced in India? Scope and coverage of Bharat Bill Payment System.