Payments industry hoping for an extension of the deadline
Ajinkya Kawale Mumbai
A shorter window to comply and delayed prioritisation of technology systems may have hindered banks’ efforts to comply with the Bharat Bill Payment System (BBPS) interface.
BBPS is an integrated bill payment platform that enables payment and collection of bills through multiple channels including mobile apps, bank branches, among others.
Click here to connect with us on WhatsApp
At present, only eight banks are eligible to process credit card payments on the BBPS. This includes BoB credit card, SBI Card, IndusInd Credit Card, among others.
HDFC Bank, Axis Bank, ICICI Bank, and Yes Bank are among the major banks that have not gone live on the BBPS so far.
Meanwhile, the payments industry is planning to extend the deadline by about 90 days after June 30.
“Banks have their tech prioritisation that is done in advance, and is typically a planning exercise that is done for the year. As a result, for most banks, it is more about the alignment between regulation, tech prioritisation, and the timeline to abide by it,” a person aware of the development said.
The person explained that such challenges may have caused the delay for banks to go live on the BBPS for processing credit card payments.
A senior executive of a payment firm gave an instance of such delays at a large bank.
“Last year, a major bank was to go live with BBPS. However, some internal developments led to the bank acquiring another bank’s consumer business in India. As a result, the entire tech team was tasked with the integration following the acquisition, causing delays in getting live with BBPS,” the person quoted above added.
Fintech players who will bear the brunt the most are hoping for some relaxation. “We are asking for an extension from the RBI, let us again talk to them and get the banks on board. Technology is a never-ending issue at banks, it continuously goes on at banks,” an executive at a payments company said, requesting anonymity.
However, if the banking regulator denies the extension of the deadline and banks fail to go live with processing credit card payments on BBPS, it could raise concerns among fintechs that rely on credit card payments and reminders as part of their business models.
“Companies like Cred may face an issue since their entire model is built on credit card repayments. Banks get their credit card dues from customers. As a credit card issuer, if I am getting paid back, that is what is important even if the volume of transaction moves to an app like Cred,” the person added.
Cred did not respond to a request for a comment sent by Business Standard.
“It is now dependent on the bank’s side when they will get themselves live on BBPS for this purpose. Some of them have done it, however, many are pending and that can have some impact on credit card repayment volumes at some fintech companies,” a third person said.
With media reports about the major lenders not going live on BBPS for credit card transactions, multiple banks have approached the central bank backed network for now.
“Several banks have reached out to BBPS after media reports and said that they will prioritise it. We’ll now see if there is a requirement for any extension,” one of the people quoted above said.
Out of the Loop
> BBPS is an integrated bill payment platform that enables payment and collection of bills
> Currently, eight banks eligible to process credit card payments on BBPS
> In February, RBI directed that all credit card payments should be processed on BBPS interface after June 30
> HDFC Bank, Axis Bank, ICICI Bank among lenders that are not yet live on BBPS
> Payments industry planning to seek deadline extension by 90 days
