In the last five years, ever since its launch in 2017, Bharat Bill Payment System (BBPS) has been the one-stop solution for merchants to pay recurring bills.
While this bill payment infrastructure has done a commendable job, the only drawback till now is that it doesn’t handle non-recurring payments nor does it deal with payment of fees for professional services, education fees, tax payments, rent collections, etc. for individuals – even if those are recurring in nature. But that is going to change.
RBI in its statement said, “The scope of BBPS is being enhanced to include all categories of payments and collections, both recurring and non-recurring, and for all categories of billers (businesses and individuals).”
This change, which is to be rolled out soon, will make the BBPS platform accessible to a wider set of individuals and businesses who can benefit from the transparent payments experience, faster access to funds, and improved efficiency.
What is Bharat Bill Payment System?
Bharat Bill Payment System (BBPS) is an RBI-approved bill payment system. It connects banks, non-banks in the bills aggregation business, billers, payment service providers, and retail bill outlets to process bill payments.
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It is an integrated and interoperable offering for customers to pay bills online and offline irrespective of where they live. For example, someone living in Bangalore can pay the electricity bills of their offices in other cities.
BBPS lets customers choose from an array of payment modes to pay their bills. Once the payment is processed, customers get instant confirmation. BBPS also allows individuals to pay bills at physical retail bill outlets as well.
How will the change in BBPS help merchants?
The recent changes in BBPS, which the RBI governor announced during his bi-monthly monetary speech will have a long-lasting impact on businesses.
Since BBPS is going to facilitate bill payments irrespective of whether they are recurring or non-recurring, businesses can add themselves to the list of existing billers. Till now companies that fall into the bucket of recurring utility bills could only add themselves as billers.
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Here are a few industries that can benefit from the proposed change:
- Educational institutes: Tuition centres, schools, colleges, and online education companies rely on recurring payments. One of the biggest challenges for them is customers defaulting on payments. Very often parents miss payments because they either forget or it’s a hassle to make the payment. By becoming one of the billers on BBPS, educational institutions can provide parents and students with easy access to online payment facilities.
- OTT: Recharging the subscription for OTT platforms will become simpler once the scope of BBPS widens. For OTT companies, a large number of customers drop off because of payment failure or missing the payment date.
- Professional services: Individuals who offer professional services can also add themselves to the list of billers and accept money from the BBPS ecosystem. This is a big boon for individuals who run small and medium-sized businesses.
Conclusion
With the slew of changes seen in the recent past, it is certain that the Indian government wants to simplify the digital payment process for all the stakeholders. The best part about this is that the government does not want to compromise the security features to push the ease of digital payments. This means that the adoption of digital payments will be deeper in the long term.
With BBPS widening the ambit of businesses that can leverage its platform, merchants should definitely make the most use of it.
Frequently Asked Questions
Question: When was Bharat Bill Payment System started?
Answer: The Reserve Bank of India came up with the concept of Bharat Bill Payment System (BBPS) in 2013. The pilot was launched in 2016, and went live for the public the next year. BBPS supports all payment modes including bank cheques, NEFT, IMPS, UPI, and cash. It was created to handle recurring payments for utility bills and other kinds of payments that are to be made periodically.
