93. Bharat BillPay → Bharat Connect

Recently, Jaguar, the car maker, changed its logo.

Special note: my heart weeps silently for one of my favorite brands.

Usually companies change their name and/or logo to send a message that

• Things are going well (will come to that later)
• Things are not going so well (name change is the ‘best option’ they could think of’)
• It will do something else or more than what it is doing now (Twitter → X)
• Just following a trend (Adding prefix ‘Unified’ after the success of UPI (e.g., Unified Lending Interface or adding suffix ‘Pe’ or adding ‘AI’ everywhere)

To sum it up… company’s keep changing their logo/name. (What’s in a name, isn’t it?)

Recently, NBBL (NPCI’s subsidiary), renamed BBPS (Bharat Bill Payment System) as Bharat Connect.

Let’s take a step back… and go back to basics.

What is NBBL?

Here is the group company structure of NPCI group companies and their products/charter.

NBBL is incharge of BBPS (Bharat Bill Payment) and building interoperable net-banking.

What is BBPS?

Read this article to know the evolution of BBPS, and read this article about the latest on BBPS.

BBPS is one of the important payment platforms.

As of now, there are:

• 67 Customer Operating Units,
• 36 Biller Operating Units,
• 22,097 live billers,
• 1649 Agent Institutes.

In Q3 (Jul-Aug-Sep) of FY 2024–25, 239.31 million bills were processed of value Rs.104694 Crore… wow!

That’s why they say, “we work to pay our bill” 🙂

NBBL earns a switching fee for all Off-Us transactions — where COU and BOU are different)

All in all, things are going well for BBPS… oops, Bharat Connect platform (It will take me some time to get used to the new name).

Did you notice the red part of the bar chart?

The Credit Card bill repayment category has seen a significant jump since July 2024.

CC bill payment represents 62.6% of total bill payments value and 17.92% of 42.89 million transactions.

This super jump is due to the RBI mandate that all credit card bills be paid either on bank portal or via BBPS platform from 1st July 2024. [Read Here]

This impacted the FinTechs who are into CCBP (Credit card bill payments) (CRED, CHEQ etc.). Although moving to the BBPS was not simple as many credit card issuing banks were not present on BBPS as biller and the bigger challenge was regarding NDC limits and pre-funding amounts, that was in the hundreds of thousands of crores.

In simple maths, to process Rs.1 via BBPS, these FinTechs have to keep Rs.2–3 as deposit with their sponsor banks. So these CCBP FinTechs have to organise funds and ODs.

You will be surprised (if that is your thing when you read about payments stats) that mobile recharges contribute Rs. 182 Crore (0.17% of total value) of Bill Payment platform.

Three big telcos (Jio, Airtel, Vodafone) do direct integration with bill payment agent institutes (via COU entities or directly).

So when you pay an electricity bill on your TPAP (e.g., PhonePe, GPay), it goes via the BBPS route, if you recharge your airtel prepaid mobile, it goes via direct integration.

Agent Institutes (3rd party Apps where you pay bills) prefer direct integration because they can add convenience fees (= good revenue).

Telcos do not report to RBI, they come under TRAI, so it is a bit difficult to enforce them to go via the BBPS route only. But eventually, things may change.

What is the difference between Telcos and Payment Aggregators?

When one Telco increases tariff, others increase the tariff (read here). Whereas if one PA increases MDR/fees, others go offer lower rates :)

All this Bill payment thing sounds good… but why rename Bharat Billpay as Bharat Connect?

BBPS is a powerful platform and it can cater to many use cases.

When you say ‘bill payment’, one will assume that you are talking about utility bills.

But… if you think about it, every payment we make is against a ‘bill’.

When you are done eating at a restaurant — what do you ask the waiter?

• “Cheque please” (if you are one of those hi-fi types)
• “What’s the damage?” (if you want to sound cool)
• “Please, get the bill”

As per RBI Master Direction, ‘Bill’ means any notice for payment raised by a biller for recurring or non-recurring payments. Bill also includes notice or advice for recharge of prepaid services.

See… eCommerce purchase to utility payment is about ‘payment against a bill’.

And, there are other types of payments which do not have a proper channel of payment. Example: B2B vendor payments, rent repayment etc.

And there were quite a few FinTechs operating in this grey area. RBI stopped the BPSP model (Card to vendor payment) in Feb 2024. Read the article ‘Who Moved My Money?’ for details.

The RBI is restricting the entities that can operate the bill payment system. As per the RBI’s Master Direction (Link to doc),

‘Any entity, other than a biller, operating a system for payment of bills outside the scope of BBPS is a ‘payment system’ under Section 2(1)(i) of PSS Act 2007 and will require authorisation as per Chapter III of the Act to undertake the activity’.

That means, Bharat BillPay (oops again.. Bharat Connect) can be a solution for such models and beyond.

Today, there is next to zero (Actually 0) traffic on Bharat Connect for B2B or Rent Repayment segment. But keep checking this space and numbers will increase in the coming months.

Talking of ‘beyond’, Bharat Connect platform enables NRIs of a couple of Middle East countries to make bill payments. (Read Here).

And recently, RBI announced that the FX-Retail platform will be linked to Bharat Connect.

Look at all those good things happening and big things that are about to happen… of course, anyone would change the name.

Bharat Connect aims to process 1 billion transactions per month in next 2–3 years (Article).

So, Congratulations, Goodluck & Godspeed… BHARAT CONNECT 🙂