As Indian consumers and businesses continue to embrace the digital economy, the flow of digital payments is well underway and showing no signs of slowing down. With the increasing penetration of internet and smartphones in rural India, this trend is only increasing.
During Covid, digital payments transformed from a utility to a necessity. This led to an increase in the use of digital payment modes among customers, especially when it comes to bill payments for electricity, water, gas, DTH, and telephone bills and other utilities.
To facilitate and accelerate the adoption of cashless payments, the Reserve Bank of India has set up a one-stop platform for payment of all recurring bills. Bharat Bill Payment System (BBPS) is managed by the National Payments Corporation of India (NPCI).
Current Status in the Payments Ecosystem
The shift from an economy predominantly using cash as the primary payment mode and debit cards for cash withdrawals has been anything but incremental.
Prior to 2010, the growth in digital transactions was only in single digits, and between 2010–2016 the growth was 26%. But subsequent demonetisation efforts pushed growth to 56% annual growth in 2016-18.
The Indian payments ecosystem is still unorganized on many fronts with too many players involved, and technical knowledge among end users is not uniform.
With the meteoric rise in adoption of digital devices and acceptance of digital payments as a default, there is also the element of fraud risk. Strengthening cyber security and tightening KYC norms can be starting points to address these issues.
Government of India and RBI have been instrumental in creating a positive environment to encourage non-traditional players to provide innovative solutions to shape the Indian bill payment ecosystem.
Participants in the BBPS Ecosystem
The Bharat Bill Payment System ecosystem consists of five key players:
#1. Bharat Bill Payment Central Unit (BBPCU)
NPCI itself will act as the central entity that can set standards and regulations in terms of operational and business standards for the entire bill payment ecosystem.
# 2. Bharat Bill Payment Operating Units (BBPOU)
BBPOU is an authorized operational unit that follows the standards and procedures laid down by BBPCU. It can be a banking or non-banking institution that handles bill payments and related other aggregator services.
#3. Billers/Utility Companies
Billers refer to the service providers who are collecting the bill from the customer for the services provided. These include all providers of your utilities like gas, water, electricity, telecom, DTH etc.
#4. Agent Institute
These are any entities which are already involved in bill payment and collection business or want to provide such services. Currently there are more than 20 agent institutes authorized to do so.
#5. agents
Agents are customer service points in the form of bank branches, retail outlets, agent outlets and business correspondents to name a few.
Adoption and development of BBPS in India
The utility billing system, which was a fragmented market with multiple players, each functioning as a standalone system, has slowly started to fuse as an ecosystem.
BBPS started its pilot phase on 31 August 2016 and went live on 17 October 2017.
With over 20,000 billers already on the system, Bharat Bill Payment System (BBPS) processes over 80 million transactions every month. Currently, BBPS is accessible only to residents of India.
According to MEIT data, BBPS is estimated to grow at a rate of 500% CAGR since 2018.
While there was a significant decline in the number of payments through BBPS in April 2020, the 20% drop has grown to an increase of 65% by August 2020.
Other factors such as continuous onboarding of new billers to existing categories, addition of new billers categories and integration of BBPS with banking and mobile apps are also contributing to this growing trend.
Why FIN BBPS?
With the knowledge and expertise of being a leading FinTech service provider for banks and financial institutions, Finacce provides a BBPS solution for banks.
Fin BBPS is an application that provides access to the BBPS system and the facility to set up customer touch points to handle bill payments. These payments can be made through various delivery channels, including self-service, agent assisted, electronic and offline modes.
Some of the salient features of BBPS are:
Interoperable - FIN BBPS will act as a unified bill payment system making it easy to use, secure and convenient.
• Accessibility - FinBBPS will facilitate seamless payment of bills through any digital and physical channels, anytime and anywhere.
Standardization – FinBBPS will adhere to the operational and business standards set by NCPI for BBPOUs across the country.
• Multiple Modes of Payment - To facilitate bill payments, Fin BBPS allows multiple modes of payment including net banking, credit and cards, e-wallets and even cash in case of offline mode.
• Instant Confirmation - FIN BBPS API interacts with BBPS system and provides instant confirmation of payment after transaction is completed.
Bhushan Kondurkar, CEO, Finaucus Solutions, said, “We are accredited by NPCI as a certified partner for BBPS as well as UPI, IMPS, NFS and RuPay. It is great to see that our hard work and innovative products are getting recognized by NPCI. Finacus has been authorized by NPCI to provide BBPS technical support to both new and ongoing participants as both customer and biller. ,
ground level
BBPS is a robust system that can provide hassle free bill payment solutions. Looking for BBPS Service Provider? Finacus provides a FinBBPS solution that is reliable and innovative, and helps it function effectively as a BBPOU in compliance with the norms laid down by NCPI.
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