The process to make your bill utility payments easier began last month with the National Payments Corporation of India (NPCI) launching the pilot project for Bharat Bill Payment System (BBPS). NPCI is an umbrella organisation for all retail payments in the country.

As per the framework, a customer will have a single location—physical or electronic—where she can pay bills such as for electricity, telephone, water, gas, and direct-to-home television. There will be instant confirmation once the payment is made.

Payments can be either made in cash or through any of the various electronic modes of payment. Cheque payments are not a part of the system. Participants who will function as operating units (OUs), will carry out these transactions for the customers.

The initiative is in line with the Reserve Bank of India’s (RBI) vision to facilitate payments for customers anytime, anywhere.

“The primary goal of BBPS is to promote electronic payments. However, given the large number of cash transactions that take place, we cannot ignore the need for an agency network. A customer will be able to connect with any of these outlets to make her payments for utilities," said A.P. Hota, managing director and chief executive officer, NPCI. Banks such as Axis Bank, IndusInd Bank, TJSB Sahakari Bank, and Punjab and Maharashtra Co-operative Bank, and non-bank payment gateways such as BillDesk, TechProcess, Oxigen Services and Euronet have come on board, he added.

The number of service providers currently involved in the pilot project is lower than the total number of utility providers in the country. OUs plan to scale these up eventually after noting the observations from the pilot project.

How does it work?

A customer can either walk into an outlet or log on to an OU’s website, but the pilot project is smaller in scale. “Currently, we have a branch model as part of the pilot project. It is operational in two branches in Mumbai. A consumer can walk into these and make the payment by providing the reference number mentioned on the utility bill. The front-end will display the details of the bill and one can pay the amount," said Shishir Mankad, executive vice-president, and head of corporate and financial institutions sales, Axis Bank. “You don’t have to be an account holder with the bank to carry out these payments," he added. The bank went live on 1 September with the services with eight billers.

“Punjab and Maharashtra Co-operative Bank and TJSB Sahakari Bank have developed a mobile handset that will facilitate such payments," said Hota. TechProcess Payment Services Ltd has functions that are biller-oriented and consumer-oriented. Bill Junction, its consumer-oriented bill payment service, gives access to payment history and informs you about the status of your bills via e-mail or SMS. The company claims to have access to over 85 billers. Currently, it has not yet integrated to the pilot BBPS.

“These services will fall in with BBPS. For a consumer, those billers with whom we don’t have an arrangement will be displayed, making it (Bill Junction) an agent," said Anand Ramachandran, chief financial officer, TechProcess.

OUs such as Itz Cash Card Ltd, a payment solutions company, also offer these services. ItzCash has an e-wallet as well as physical stores that allow you make payments.

The scope and reach of these services are set to increase with companies planning to start their own projects on the BBPS platform. “ItzCash is part of the pilot project and would go live on pilot within the next 5-6 weeks. Post the pilot, NPCI will decide the timelines and plan for the full launch of the BBPS platform," said Bhavik Vasa, chief growth officer, ItzCash.

Hota said that around 10-12 more OUs are likely to go live by the end of this month.


Till now, these firms had bilateral arrangements with billers, so a facilitator would tie-up with a biller for the payments. With BBPS, access to several billers will be shared by all participants. Therefore, a viable business model may be difficult. “Having a business model that is a win-win for a challenge. The ecosystem needs funding. We have also set up a task force to finalise a commercial model," said Hota.

However, OUs are upbeat that the volume of transactions will help their business. “NPCI had done a viability test which revealed that only 25% payments were done online. The opportunity size is much bigger in this case," said Vasa.

All service providers agree that customer experience will play a big role. “For a customer, if the system is a success, the scope is infinite. It...opens up possibilities for newer forms of payments," said Ramachandran.

While a consumer can choose to pay from the basket of offerings, only a full-fledged system in place will reveal the cons as well. For example, chances are that banks would like to charge consumers for the convenience offered, said Hota. Therefore, if you plan to use this service, do take note of the charges.