RBI Mandates Credit Card Bill Payment via BBPS only from 1 July!

The Reserve Bank of India (RBI) is set to cease the use of third-party platforms for credit card bill payments from 1 July 2024 (next month), redirecting all such transactions to the Bharat Bill Payment System (BBPS). However, this shift presents a challenge, as only a limited number of banks are currently integrated with BBPS.

credits: Economic Times

Of the 34 banks authorized to issue credit cards, just 8 have joined the BBPS network. Consequently, from July 1, customers from the remaining 26 banks will need to rely on auto debit mandates or net banking for their credit card bill payments. The Payments Council of India (PCI), the representative body for payment companies, has requested an extension from the RBI, but approval has yet to be granted.

The RBI's objective is to bring all credit card transactions under the NPCI Bharat BillPay (NBBL) umbrella. Despite this directive, major banks such as Axis Bank, HDFC Bank, and ICICI Bank have not yet integrated into the BBPS ecosystem. Currently, only SBI Card, BoB Card, and a few private sector banks are operational on BBPS. For payment platforms like Cred and PhonePe, this means they can only process transactions for BBPS-affiliated banks, potentially resulting in a significant reduction in transaction volumes starting next month.

The centralization of bill payments under BBPS is driven by the RBI's desire for improved oversight of payment trends and enhanced fraud detection capabilities. Additionally, it aims to foster greater transparency and public accountability in financial transactions. However, as seen in previous regulatory implementations, the industry is struggling to keep pace with these new requirements.