Bharat Bill Payment System

Bharat Bill Payment System : Complete Notes | Banking Awareness

Banking Awareness
Origin : The term Bharat Bill Payment System originated in 2013 when the Committee under the chairmanship of RBI Executive Director G. Padmanabhan was set up to study the feasibility of implementation of Giro (payment transfer from one bank account to another bank account) in India. Bill payments form a major component of India’s retail transactions constituting over Rs. 6223 billion each year merely in top 20 cities of the country and over 70% of these transactions were routed through cash or by cheque. With large number of billers and variety of payment options, need for a unified bill payment system offering inter operable and accessible bill payment services was felt.
BBPS is an economical, enhanced and convenient substitute to the existing system with additional features.

Brief Notes on Bharat Bill Payment System :

With the increase in e-commerce sites in India, people also like to buy products online and pay for them online only through debit cards, credit cards, net banking and some platforms. Under the retail payment transactions, bill payments like electricity, water, phone bills, etc. also form a major component.

With a need of bill payments system, various organizations decided to provide a single platform to make all these payments. So an integrated bill payment system called Bharat Bill Payment System (BBPS) was proposed for which the policy guidelines were issued by the Reserve Bank of India on November 28, 2014.

National Payments Corporation of India (NPCI) had been identified to act as Bharat Bill Payment Central Unit (BBPCU) which will be a single authorized entity for operating the BBPSThe BBPCU will set necessary operational, technical and business standards for the entire system and its participants, and also undertake clearing and settlement activities. It will work only as a medium to connect multiple billers and agents through various Operating Units.

BBPS will operate on entities called Bharat Bill Payments Operating Unit (BBPOU). BBPOU will be authorised operational entities, which can fulfill the standards set by the BBPCU for facilitating bill payments online as well as through a network of agents, on the ground. Banks and non-bank entities presently engaged in any of the above bill payment activities falling under the scope of BBPS can apply for approval from RBI under the Payment and Settlement Systems (PSS) Act 2007.

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Some facts about Bharat Bill Payment System :

  • The biggest advantage is that the bill can be paid anywhere and anytime.
  • The system will provide multiple payment modes and instant confirmation of payment.
  • Payments may be made through the BBPS using cash, transfer cheques, and electronic modes.
  • Retail points will be set up for bill payments across the country who would be able to accept all kinds of bills payments made through credit cards, debit cards, mobile wallets, net banking (IMPS, NEFT).
  • The BBPS outlets would include banks, ATMs, business correspondents, kiosks etc.
  •  Payments would be made securely through the NPCI network with instant receipts getting generated.
  • PayU India is the first non-bank entity which got RBI approval to set up and operate Bharat Bill Payment System (BBPS).

Salient Features of Bharat Bill Payment System :

  • Dispute Management System
  • Integrated and Interoperable System
  • Complaint Management System
  • Standardized Process for entire System

Benefits : 

  • Reliable and transparent transactions
  • Instant Payment Confirmation
  • Integrated platform
  • Timely and guaranteed settlements between parties
  • Dispute Management and Complaint Management System
  • Faster settlements will improve liquidity position of Billers
  • Convenient and Time Saving System
  • Enhancement of Customer’s confidence and experience
  • Multiple Payment Modes, Options and Channels
  • Anytime Anywhere Payment option to customers
  • Migration of Bill Payment from cash to electronic channel leading to cashless society.

Major Participants :

  • Customers
  • Agents
  • BBPOU (Bharat Bill Payment Operating Units)- Banks & Non-Banks (and their sponsors)
  • BBPCU (Bharat Bill Payment Central Unit- NPCI)
  • Billers
  • Service Providers

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