Anindita Nayak
Bhubaneswar, 26 June 2024
Changes to the way credit card bills are paid are in the offing. From July 1, there will be changes in how credit card bills are paid owing to the Reserve Bank of India’s changed norms in this regard.
Fintech platforms such as PhonePe, Cred, BillDesk, and Infibeam Avenues will need to process all credit card payments through the Bharat Bill Payment System (BBPS), which may impact their operations.
Starting July 1, the RBI has mandated that all credit card payments must go through BBPS. This change is intended to improve the efficiency and security of payment processes. Currently, only eight out of the 34 banks authorized to issue credit cards, have enabled bill payments through BBPS. These banks include SBI Card, BoB Card, Kotak Mahindra Bank, IndusInd Bank, and Federal Bank. However, major card issuers like HDFC Bank, ICICI Bank, and Axis Bank have not yet activated BBPS as per reports.
Though these banks have issued more than 51 million credit cards in total, they have not complied with the regulation. Therefore, fintech companies like PhonePe and Cred, which are part of BBPS, won’t be able to handle credit card payments for their customers from these banks after June 30 unless these banks comply with the new regulations.
Against this backdrop, the payments industry has requested for a 90-day extension to help make the transition smoother. Some banks are hesitant to follow the new rule because they’ve already invested in connecting directly to different payment systems, seeing BBPS as an extra layer they need to integrate.
Starting July 1, consumers may face problems paying their credit card bills through popular fintech apps if their banks haven’t joined BBPS yet. It is to be seen whether the central bank gives an extension for compliance with the new rules.
