RBI Mandates BBPS for Credit Card Payments: Major Banks Face New Rules
The RBI now requires all credit card payments via third-party apps to be processed through the Bharat Bill Payment System (BBPS), impacting banks like HDFC and Axis.
The Reserve Bank of India (RBI) has mandated that all credit card payments made via third-party apps must be processed through the Bharat Bill Payment System (BBPS). This change affects customers of banks not yet integrated with BBPS, including HDFC and Axis Bank, and is effective from July 1.
In a significant move aimed at streamlining the payment process, the Reserve Bank of India (RBI) has introduced new guidelines requiring all credit card payments via third-party applications to be routed through the Bharat Bill Payment System (BBPS). This new regulation, effective from July 1, affects credit card holders of major banks not yet integrated with the BBPS platform.
New Rules and Affected Banks
Under the new RBI directive, all credit card bill payments made using third-party applications like CRED, PhonePe, Amazon Pay, and Paytm must now be processed through the BBPS platform. The change primarily impacts customers of banks such as HDFC Bank and Axis Bank, which have not yet integrated with BBPS. This move is expected to streamline and secure the payment process, ensuring that all transactions are processed through a standardized system managed by the National Payments Corporation of India (NPCI).
Understanding BBPS
The Bharat Bill Payment System (BBPS) is an initiative developed by the RBI to provide advanced technological solutions for the payment collection process, benefiting both businesses and customers. BBPS facilitates convenient payments through a wide network of physical outlets, including bank branches and collection stores, as well as digital channels like apps and websites. The system ensures prompt settlements and supports various payment methods, offering enhanced flexibility and convenience to users.
Banks Live on BBPS
As of July 1, several banks have already integrated with the BBPS platform. These banks include State Bank of India (SBI), Kotak Mahindra Bank, IndusInd Bank, IDBI Bank, AU Small Finance Bank, Canara Bank, Bank of Baroda, Federal Bank, ICICI Bank, Union Bank of India, Punjab National Bank, and Saraswat Bank. Customers of these banks can continue to enjoy seamless credit card payment services via BBPS without any disruptions.
Banks Working on Integration
On the other hand, some banks are still in the process of integrating with the BBPS platform. These include Axis Bank, HDFC Bank, IDFC First Bank, Indian Bank, Indian Overseas Bank, and YES Bank. Customers of these banks may experience temporary inconvenience as these institutions work towards complying with the new RBI mandate. However, the integration efforts are expected to be completed soon, bringing these banks in line with the new regulatory requirements.
Impact on Customers and Payment Ecosystem
The RBI’s decision to mandate the use of BBPS for credit card payments through third-party apps is a strategic move to enhance the security and efficiency of the payment ecosystem in India. By ensuring that all transactions are routed through a unified platform, the central bank aims to reduce the risk of fraud and discrepancies, providing a safer and more reliable payment experience for consumers.
For customers of banks already live on BBPS, the transition will be smooth, with no changes to their current payment routines. However, customers of banks still working on integration might need to explore alternative payment methods temporarily. In the long run, the implementation of BBPS is expected to bring significant benefits to the overall payment landscape, promoting greater transparency and operational efficiency.
The RBI’s mandate to route all credit card payments via third-party applications through the BBPS platform marks a crucial step towards a more secure and streamlined payment system in India. As banks work towards integrating with BBPS, customers can look forward to a safer and more efficient payment experience, reinforcing the RBI’s commitment to enhancing the digital payment infrastructure in the country.
By embracing these changes, the Indian banking sector is set to achieve greater standardization and security, ultimately benefiting millions of credit card users nationwide.
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