Science & Environment
Explained: What are RBI’s new rules for credit card…
According to an ET report, as of now, 12 banks are operational on BBPS for credit card bill payments.Major players like HDFC Bank, Axis Bank, Yes Bank, and IDFC First Bank are still in various stages of integration. This shift is set to bring significant changes to how banks and payment apps handle credit card transactions.
What is Bharat Bill Payment System (BBPS)?
Developed by the National Payments Corporation of India (NPCI), BBPS is a unified platform designed to handle all forms of bill payments across the country. The RBI’s directive to route all credit card bill payments through BBPS aims to enhance security, reduce fraud, and standardize grievance redressal processes.
By mandating that all credit card bill payments be routed through BBPS, the RBI seeks to bring a higher level of security and control over these transactions. Currently, payments via apps are typically settled through Immediate Payment Service (IMPS) or directly with the bank. The new regulation ensures all such transactions flow through the centralized BBPS network.
From a consumer perspective, the change will be largely seamless. Currently, consumers can pay their credit card bills through auto-debit facilities, net banking (NEFT or IMPS), or third-party apps. Post-July 1, while the backend processing will shift to BBPS, the front-end experience for consumers will remain largely unchanged. Services offered by apps like Cred, Amazon Pay, and PhonePe will continue through their individual payment settlement channels until all banks go live on BBPS.
The real challenge lies with the banks that have yet to integrate with BBPS. Once banks like Axis and HDFC go live on BBPS, the backend channels for payment processing will shift. This transition may pose some initial integration hurdles for these banks, but it is expected to streamline and standardize credit card bill payments in the long run.
