Out of the thirty-four banks that can issue credit cards, only eight have reportedly opted for the process through BBPS.
Fintech start-ups such as Cred, PhonePe, BillDesk, and Infibeam Avenues are preparing for major disruptions due to a new regulation mandating that credit card bill payments be processed through a centralised billing network starting July 1. This is as per a report by the Economic Times.
HDFC Bank with 20 million cards, ICICI Bank with 17 million, and Axis Bank with 14 million have not yet integrated with the Bharat Bill Payment System (BBPS). Thus, platforms that are members of BBPS, such as PhonePe and InCred, won’t be able to process the card dues for them. As a result, fintech companies are fearing that they will suffer a major drop in transactions, industry executives told the Economic Times.
According to the National Payment Corporation of India (NPCI), “BBPS is a one-stop ecosystem for payment of all bills, providing an interoperable and accessible “Anytime Anywhere” bill payment service to all customers across India with certainty, reliability, and safety of transactions.”
The ecosystem allows for the following payment methods: cash, wallets, NEFT Internet banking, Aadhar-based payments, credit, debit, and prepaid cards. The live categories that are part of BBPS are electricity, telecom, DTH Gas-Pipedline, loan repayments, FASTag recharge, cable, education fees, and others. Interestingly, credit card payments account for only 1.5 percent of all BBPS transactions each month. The remaining amounts are used to pay for things like power bills and tolls using FASTag.
The central bank of India has issued a direction where it mentions that all credit card payments must be processed via BBPS after June 30. However, as of now, out of the 34 banks that can issue credit cards, only 8 have opted for the process through BBPS, according to the report. These include banks such as Kotak Mahindra, Federal Bank, SBI Card, and BoB Card.
The report adds that the payment industry has asked for a deadline extension of 90 days. While the extension might come in 90 days, there is no confirmation as of now.