New Delhi: A major push is required by the government to formalize the bill payment system in the country by bringing more customers and billers under the ambit of digital bill payment services.

The Bharat Bill Payment System (BBPS) is an evolving platform and its scope can extend far beyond the current set of utilities, said a report by KPMG on Monday.

BBPS is the Reserve Bank of India’s (RBI) conceptualized system, managed by the National Payments Corporation of India (NPCI), which offers integrated, accessible and bill payment services to consumers.

The use cases of Bharat Bill Payment System (BBPS) can be extended to any routine and repetitive payments such as insurance premiums, institution fees such as school or college fees, subscriptions, credit card bill payments, government taxes, loan EMIs etc to transform it into a comprehensive and cost-effective payment solution, said the report.

Currently, customers can pay several bills such as electricity, telephone, water, gas, and direct-to-home television on the BBPS platform.

“Though, the current list of utilities provides just enough transaction volumes required for operations. However, for bringing more players into the ecosystem to ensure profitability and growth, there is a need for stronger business case in terms of customer satisfaction, revenue opportunities, growth and cost savings," said the report titled BBPS-KPMG in India’s perspective.

Currently, 68 large billers in five utility sectors have been on-boarded.

As of December 2017, there are 7.5 lakh entities registered as BBPS agents. There are 11 national billers and 48 state-specific billers over 18 states, the report said.

NPCI ran a pilot from April to October 2017 across different channels (digital and physical) to evaluate the efficiency, robustness and challenges of the system. In July, it received the final nod from RBI to function as the Bharat Bill Payment Central Unit and operate the BBPS.

The report showed month-on-month growth of 7.51% for transaction value and 4.29% for transaction volume during the period April 2017 to December 2017, pertaining to transactions on BBPS. The ease of making instant bill payments to any registered biller of any state/city/region from anywhere in India through various modes of payments was the reason for the growth, it added.

The transaction can be initiated through multiple payment channels like Internet, Internet banking, mobile, mobile-banking, POS (Point of Sale terminal), mobile wallets, MPOS (Mobile Point of Sale terminal), kiosk, ATM, bank branch, agents and business correspondents.

Telecom postpaid bill payments is the most popular transaction on BBPS in terms of total volume of transactions (around 47%) followed by DTH (around 32%) and electricity bill payment transactions (around 19%).

However, electricity bill payments are the highest value generating transactions amongst all transactions happening on BBPS (around 55%), followed by telecom postpaid (around 29%) and DTH bill payment transactions (around 14%), the report said.

According to the report, the size of bill payments market in India is projected to reach Rs9.4 trillion by the year 2020. By the end of 2016, the size of bill payments market in India was more than Rs5.85 trillion, out of which 70% of the bill payments were done using cash or cheque.