Bharat Bill Payments System

Bharat Bill Payments System

Subject : Economy

Context:

RBI governor bats for expanding scope of Bharat Bill Payment System.

Concept

Bharat Bill Payments System?

• BBPS was conceptualised by the Reserve Bank of India in 2013 and is a product of the National Payments Council of India (NPCI).
• It is an integrated bill payment system or a platform which acts as a connection between various billers and users.
• The Bharat Bill Payment System offers customers the convenience of payment by cataloguing various utility providers under one platform.
• It acts as a central reference for a customer who wants to make different payments — whether utility bills, loan repayments, FasTag recharge, and so on.
• All recurring payments are part of Bharat BillPay ecosystem.
• There are 19 categories of billers and as of November, there are 20,519 live billers (or utility providers) listed in BBPS.
• The current live categories part of Bharat BillPay are as follows:
  • Electricity, Telecom (Mobile Post-paid, Landline Post-paid and Broadband), DTH, Gas-Pipeline, Water, LPG, Gas Booking, Insurance (Life, General, Health), Loan Repayments, FASTag Recharge, Cable, Education Fees, Housing Society, Municipal Taxes, Municipal Services, Hospital Subscription Fees etc..
  • BBPS opened inbound bill payments facility for NRIs.
  • Other categories like mutual funds, credit cards, recurring deposits, clubs and association, metro recharge etc. would be covered under Bharat BillPay shortly.

Key Participants

• Bharat Bill Payment Central Unit (BBPCU)-National Payments Corporation of India (NPCI) has been authorized by RBI as the Bharat Bill Payment Central Unit (BBPCU) and is responsible for setting business standards, rules and procedures for technical and business requirements for all participants. The BBPCU undertakes clearing and settlement activities related to transactions routed through Bharat BillPay.
• Bharat Bill Payment Operating Unit (BBPOU)-Bharat Bill Payment Operating Unit aka BBPOU is the entity that is authorized by the Reserve Bank of India. It can be a Bank or a Non-Bank. BBPOU may choose to integrate either with the customers, (COU: Customer OU) or with the billers (Biller OU) or may wish to participate as both – which means such BBPOU will be integrated with customers as well as billers.BBPOUs adhere to the rules set by BBPCU.
• Agent Institutions-Eligible Entities who wish to offer or those who are currently in Bill payment, collection and aggregation business, would operate under a COU (Customer BBPOU). Customer BBPOU will on-board Agent institutions which may further on-board agents and/ or set up customer service points in various regions and locations.
• Agents- Agents are the customer touch points and service points in the Bharat BillPay ecosystem available in the form of agent outlets, Business Correspondent outlets, Bank branches, collection centres, retail outlets.
• Biller/Utility Company-Service providers, who shall receive payments from customers for services rendered. By participating in the Bharat BillPay scheme, the biller will be able to receive payments from third party channels for the services provided to the customer. A biller may tie up with up to two BBPOUs to access the entire universe of its consumers and all payment channels.

How does it work?

• Customers  have certain utilities such as phone, electricity, gas, and water bills to pay on a monthly basis.
• Under BBPS, all these utilities are listed in a single website.
• Customers choose the payments to make and that will take them to the vendor website for the processing. Hence, they doesnot have to go to each website separately to make the payment. That’s the convenience it offers.
• BBPS is payment mode agnostic and supports IMPS, NEFT, UPI, cheques, wallets and even cash.
  • If a gas bill has to be paid in cash, the website provides the nearest BBPS collection point, one can pay cash to the person at the counter and a receipt is generated. Cheques can also be remitted through these agents.
• However, if a transaction has a settlement duration of T+1 or T+2, as with UPI or cheque payments, BBPS cannot bypass the time taken for payment processing. It only facilitates making and concluding a payment in a common platform.