From 1st July 2024, credit card users cannot make repayments through fintech apps if their banks are not yet live on the Bharat Bill Payments System (BBPS). This change will affect uses of several fintech platforms including Cred, Paytm, PhonePe, and Amazon Pay.
A Business Standard report on Monday (July 1) quoted a Paytm spokesperson as saying that the fintech platform will facilitate credit card bill payments only for banks that are part of the Bharat Bill Payment System (BBPS) starting from July 1st. This is in line with the guidelines issued by the Reserve Bank of India.
The newspaper also quoted a senior executive at a fintech major as saying that some industry players have chosen not to process payments for banks that are not compliant with regulations. Third-party entities are unable to handle such transactions or find alternative methods to do so.
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He further said that certain companies might proceed with credit card transactions for banks not meeting compliance standards, which would violate RBI regulations.
HDFC Bank, ICICI Bank, Axis Bank, and several other prominent credit card issuers in India have not yet activated BBPS, according to the report. However, they are currently in the process of joining the system, as indicated by individuals familiar with the situation.
Another executive at a leading fintech company was quoted as saying that the RBI’s February circular on BBPS mandates banks and fintech firms to integrate with the bill payment system.
Meanwhile, companies like Cred, whose business relies on credit card payments, may face temporary disruptions until all banks integrate with BBPS.
The payments industry has urged a 90-day extension for banks to comply with BBPS. However, the RBI has not made any announcement about the extension till the time of writing.
Fintech firms affected by these changes were hoping for a relaxation in the implementation timeline.
Also Read: Why Are Banks Seeking Clarity on Credit Cards from RBI?
Meanwhile, customers holding credit cards from major banks like SBI Card, Kotak Mahindra Bank, and IndusInd Bank, among others, can now pay their credit card bills through apps like Cred, Paytm, and PhonePe, as these banks have integrated with BBPS.
BBPS is a unified bill payment platform facilitating bill payments through various channels, including mobile apps and bank branches.
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