Behind the BBPS push—RBI’s safety moat for payments

Global monetary regulators harbour significant concerns regarding the payment sector, particularly about the rapid proliferation of digital and decentralised payment methods. These concerns revolve around security, fraud prevention, and the potential for systemic risks arising from unregulated or poorly monitored transactions. 

The emergence of cryptocurrencies, peer-to-peer payment platforms, and fintech innovations has added layers of complexity, making it challenging to maintain comprehensive regulatory oversight. Regulators worry that without stringent controls and centralised monitoring, the financial system could become vulnerable to money laundering, cyberattacks, and other illicit activities, ultimately jeopardising consumer protection and global financial stability.

This caution has shaped the Reserve Bank of India’s (RBI) February 2024 mandate to centralise credit card bill payments through the Bharat Bill Payment System (BBPS). The directive, which went into effect at the start of July, rendered many credit card users unable to use one-step-process repayments via third-party fintech applications since their banks haven’t integrated with BBPS.

The BBPS is an advanced integrated bill payment platform facilitating payments through various channels, including mobile apps, bank branches, and physical agents, using diverse payment modes like UPI, wallets, cash, internet banking, and more. Covering categories such as electricity, telecom, DTH, loan repayments, and others, BBPS ensures broad reach and flexibility in payments, which is crucial for India's vast and diverse population. Given the velocity of changes that RBI has pushed for across payment categories, one would assume that this scope would only continue to expand.