PayU and Oxigen get RBI nod for setting up Bhar...

PayU and Oxigen get RBI nod for setting up Bharat Bill Payments Operating Unit

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  • Payment companies PayU and Oxigen have got an in-prinicple approval from the Reserve Bank of India (RBI) to setup a Bharat Bill Payments Operating Unit (BBPOU).
    The approval from the RBI will allow BBPOUs to connect with the central bill payments and settlement system called Bharat Bill Payment System (BBPS) of National Payments Corporation of India (NPCI).

BBPOUs are units which can create an agent network and will be responsible for on-boarding billers and aggregators.
In addition, they will be responsible for transaction handling, infrastructure development and application development, including APIs.

The BBPS intends to offer an interoperable and accessible bill payment services to customers through a network of agents, enabling multiple payment modes, and providing instant confirmation of payment.*

  • The RBI had come out with guidelines for BBPOUs in December 2014 and had invitedapplications for BBPOUs in October 2015.
    The RBI said that it is communicating the decision directly to the applicants.
    It added that billing experience for eligibility as a BBPOU does not include activities in which the applicant is only a front-end of a bill aggregator and does not have tie- up with billers.

Oxigen SuperPOS

In August 2015, Oxigen introduced Super PoS, a point of sale terminal which would also facilitate payments under the BBPS.
The Super PoS would also have micro ATMs according to UIDAI/NPCI specifications, a biometric reader for Aadhaar transactions and eKYC, a built in NFC with tap and pay debit card and magnetic swipe for Rupay, VISA, MasterCard debit and credit cards.
It would also support money transfer, IMPS, Oxigen wallet, insurance and mutual fund services, Aadhaar and Jan Dhan accounts, merchant payments and mobile payments via SMS and USSD.

Eligibility criteria of the BBPOUs

A net worth of at least Rs.100 crore as per the last audited balance sheet. This has has to be maintained at all times.
Domain experience in the field of bill collection/services to the billers, and relevant experience in transaction processing for a minimum period of one year.*

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Initially only utility bills can be paid through the BBPS; pilot in mid June, says AP Hota, MD and CEO of NPCI

With the Bharat Bill Payment System (BBPS), a customer of Reliance Energy will be able to pay his electricity bill at any Oxigen outlet even though the two companies do not have a direct agreement for payments, AP Hota, managing director of the National Payments Corporation of India (NPCI) told MediaNama in an interview.

The BBPS is a centralized system where banks and non-banks can allow a network of their agents to access bill payment services in an interoperable manner.

“The billers are connected to multiple banks through bilateral contracts. The signing of them is a painful process with each individual bank and is quite expensive. So if the biller is connected through one operating unit, it will be open to the customers of all operating units. This is how the BBPS will be transformational,” Hota added. Excerpted parts of the interview:

What kind of bills can be paid: “To begin with only the utility bills can be paid through the BBPS. Namely the electricity bill, telephone bill, DTH, water bill and gas bill. We’re talking to 10-15 major power distribution companies in the country. The telcos are well known and a few DTH companies. For water bill, we’ll take a few metro cities.

In a recent meeting with operating units, we decided that the billers need to be sensitized. They need to be told what requirements are needed to be on the BBPS. In Chennai, the water billing system is highly computerized and is available on the web where people can make the payment. I was told that in Mumbai it is not possible and people have to pay the bill at the municipality office.”

How will billers get on the BBPS: “First thing is that the biller will need to be on the computing platform. That means, the biller must have a method of sending out the bill, consumer number, address and the amount. This should be available on the web and should be accessible by the operating units. Either the operating units can take the information from their computers or there should be some connectivity in its computing infrastructure.

For example Reliance Energy has piloted this with quite a few banks. Reliance Energy and the banks have real-time connectivity. On every morning, Reliance Energy would be uploading all the new bills that are generated. So there should be a method of pumping the bills to the operating units.”

Instant confirmation: “One of the hallmark of the BBPS is that, if a customer would like to pay through the BBPS, the transaction should get completed instantly and get a confirmation. If you’re paying via cash, you should get a confirmation immediately on the phone that your personal account is updated.”

Who are the operating units: “Just a few days back, the RBI released the names of the operating units and we are the central unit. As of today, there are 37 banks and 7 non- banks who are operating units. The non-banks are the institutions dealing with bill payments mostly like BillDesk, Oxicash and Euronet.”

Note that PayU and TechProcess payment have got the RBI’s nod to act as an operating unit.

When will the BBPS start operations: “We had a meeting yesterday where all the operating units were called. We would be ready, technically, by the end of June and we were reviewing our position. We will start testing the BBPS in the middle of June. We are examining if we should start the pilot with seven or eight banks or if we should be going with about 20 banks or something. Then the commercial models need to be worked out. But with the operating units who are ready, the technical integration can begin.”

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NPCI has so far not been able to stabilize the ECS payment process and they are trying new things

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