Experts believe that the Bharat BillPay (BBPS) platform for businesses will help create an interoperable, universal system. The impact of this on businesses will be similar to that of UPI on consumer transactions
RBI Governor Shaktikanta Das launched a new product named Bharat BillPay (BBPS) for businesses at the Global FinTech Fest 2024 on August 28, 2024. The product built by the National Payments Corporation of India (NPCI) aims to simplify bill systems for business-to-business transactions by creating a unified system. The aim of the partnership is to cater to corporations and MSMEs.
Soon after the announcement, B2B payments company PayMate and fintech platform Enkash partnered with NPCI Bharat BillPay Limited (NBBL), to launch their own BBPS-B2B platform.
As per the NPCI, “This development is expected to change the landscape of business payments across the country through a single, centralised, interoperable platform.”
Speaking about the launch in a statement, Noopur Chaturvedi, CEO of NPCI Bharat BillPay Limited said that many businesses have relied on old payment methods. These conventional methods in turn lead to delays in the flow of goods and payments throughout the sales cycle. Let’s understand in detail what Bharat BillPay is for B2B platforms.
What is the Bharat BillPay B2B Platform?
The Bharat BillPay B2B platform allows sellers to register as billers so their buyers (like retailers or shopkeepers) can pay for goods and services using various Bharat BillPay-enabled channels and methods.
The main purpose of this service is to make the process of B2B transactions simple. “This solution will empower businesses to seamlessly digitalise the existing manual processes, and enhance the services offered by B2B players by on boarding these businesses on a comprehensive and interoperable digital invoice and payment solution,” as per the NPCI.
The platform also offers several other features that are inbuilt in the platform such as business onboarding, search and add business, purchase order (PO) creation, invoice management, automated reminders, guaranteed settlement. Further, online dispute resolution is also inbuilt in this platform.
Partnership Aims to Meet Needs of Indian Business Payments Market, Says PayMate Founder
While highlighting that the aim of the partnership is to meet the diverse needs of India's business payments market, Ajay Adiseshann, founder, MD and CEO of PayMate said in a company statement, “This [partnership] aligns perfectly with our mission to empower corporates and MSMEs by streamlining B2B transactions, driving growth, and paving the way for a more efficient future for Indian businesses.”
PayMate will work with NBBL to manage both the supplier and customer sides of business transactions. Additionally, PayMate will help its clients connect with various lenders through the BBPS-B2B platform to secure financing and capital for business growth.
As per Yadvendra Tyagi, co-founder of EnKash, previously, B2B payments were confined to a closed-loop system, but with RBI and NPCI integration, the process is now interoperable, broadening opportunities for sellers.
“With the NBBL platform, you can now manage the entire invoicing process from purchase order to payment. This digital system ensures transparency by making all transaction details, including billing, goods supply and GST numbers, readily available,” says Tyagi to Outlook Business.
How it Will Help Small Businesses
MSMEs often suffer from delay of payments. The Income Tax act was amended by the Finance Minister in February 2023 under which payments should be made to MSME sectors within 45 days of the purchase. However, complaints about delay of payments due to regulatory hurdles/dispute resolution and other reasons still persist.
Just to give an example, data from the MSME Ministry's Samadhaan, highlights that since its launch in October 2017, Rs 20,413 crore has been tied up in 82,215 pending payment applications as well as cases that are filed by MSE.
“Globally, small businesses often face challenges, especially with working capital, as the average standing period is 92 days. Transparency and data can help lenders provide better financing and ensure buyers pay suppliers on time,” says Tyagi.
Tyagi believes that with this launch, it will become a universal, synchronised and interoperable platform, much like a democratic system, designed to enable seamless transactions for MSMEs.
“Our goal is to create an interoperable, universal system for MSMEs, similar to UPI's impact on consumer transactions,” he adds.
At the Global Fintech Fest, the RBI governor also launched UPI Circle. Through UPI Circle, users can delegate payments to their trusted sources such as friends and families. So basically, a primary user can give permission to a secondary user to initiate and complete a UPI transaction. Under full delegation, the maximum monthly limit is Rs 15,000 per delegation. While the maximum per transaction limit for the same is Rs 5,000.
Now, with the launch of BBPS B2B platform, the RBI has made its entry into the B2B segment. Speaking about the central bank’s entry into the segment, Tyagi says that initially, the focus of the RBI was on consumer payments. After mastering that, it made sense to move into more complex areas like B2B payments, he adds.
“This progression is similar to what other countries have done, such as Brazil with their PIX system [instant payment system]. They started with consumer payments and then expanded into more complex sectors,” he adds.
With diverse experiments being made in the digital landscape, it will be interesting to note how the B2B segment navigates the fintech payment landscape.
(With inputs from Pushpita Dey)