The project, called Bharat Bill Payment System, is an integrated platform connecting banks and non-bank entities in bill aggregation business like billers, payment service providers, retail bill outlets etc..
The system consists of four participants — the consumer, the biller, a payment collecting intermediary and a central clearing agency.
The Reserve Bank of India must approve all entities that function as ‘operating units’ within the system. At present, a total 62 entities have received in-principle approval from RBI to function as operating units, including 10 non-banking entities.
The non-banking companies who have qualified to be operating units under the new bill payment system include Avenues India, Euronet Services, Billdesk, ITZ Cash Card, Paytm, Oxigen Services, PayU, Spice Digital and TechProcess.
Some of the banks that have been selected as operating units under Bharat Bill Payment System are Axis Bank, HDFC Bank ICICI Bank, Indian Bank, Kotak Mahindra Bank, Punjab National Bank, State Bank of India and YES Bank.
The responsibility for processing and clearing the payments rests with the National Payments Corporation of India or NPCI, a government-controlled body.
The operating units are free to collect bill payments from consumers in any fashion, including manually. The payments are then routed through the NPCI to the original company or organization — such as a power company or a gas company — that issued the bill, and a receipt is provided to the customer.
“Currently the volume of bills being paid by cash is so large that even if 25 percent of the bills get paid electronically, impact would be visibly enormous,” said A P Hota, MD & CEO, NPCI (pictured).
Last week NPCI had announced the rollout of UPI mobile application which allows money transaction between banks without sharing any details like account number, mobile number etc.
National Payments Corporation of India (NPCI) was set up in 2009 as the central infrastructure for various retail payment systems in India and was envisaged by the Reserve Bank of India as the payment utility for all banks in the country.