The Reserve Bank of India (RBI), the country’s central bank announced that is seeking the creation of a country wide electronic bill payment system that will allow consumers to make payments anytime and anywhere.
Bill payments are a critical component of the retail payment ecosystem with more than $504 million payments, amounting to over $9 billion being handled across just the top 20 cities in India, according to RBI. Today, although bill payments can be accepted electronically, the majority are paid for in cash and checks. With this system, the Central Bank states that the existing systems do not fully address the needs of the consumers/customers to pay a variety of bills including utility bills, school/university fee, municipal taxes, because of the lack of interoperability in the payment processes.
Given the move to improve interoperability, the RBI has proposed the Bharat Bill Payment System (BBPS) with an objective to implement an integrated bill payment system. Announcing the plan, the RBI stated in their guidelines, that the new system will “offer interoperable and accessible bill payment service to customers through a network of agents, enabling multiple payment modes, and providing instant confirmation of payment. It has been decided that the existing players in the online commerce segment catering to the requirements of bill payments as well as aggregation of payment services (in relation to bill payments) will be a part of BBPS.”
The Indian government has a long history of trying to improve the electronic payment landscape in the country, as evidenced notably by the launch of the country’s own national payment network, RuPay which has improving financial inclusion as one of its main tenants. With the launch of an integrated and interoperable bill payment system, the RBI will further boost India’s electronic payment prospects moving forward.
Overview by Tristan Hugo-Webb, Associate Director, International Advisory Services
To read the full story, go to the Economic Times.