NPCI is in Talks with Banks, FinTech for Payment System Integration


Three points you will get to know in this article:

  • RBI governor plans interoperable payment system for net banking in 2024.
  • NPCI Bharat Billpay to enable net banking payments soon.
  • RBI aims to triple digital payments by 2025 and reduce cheque payments to less than 0.25%.

Introduction to NPCI

NPCI, which stands for National Payment Corporation of India, is a government-owned non-bank financial company responsible for managing and regulating various payment systems in India, such as credit and debit cards, internet banking, and mobile payments. Established in 2015, NPCI aims to enhance India’s payment ecosystem and foster wider financial inclusion. The organization has played a key role in introducing themed payment days to encourage the adoption of payment systems at a grassroots level. Across the billion-plus population of India, NPCI strives to bring convenient, transparent, and secure financial solutions to its citizens.

Approval and Implementation of Seamless Payment System

After receiving the green light from the Reserve Bank of India (RBI) to introduce a seamless payment system for online banking, NPCI Bharat Billpay (NBBL), it’s been reported that numerous banks and fintech companies are actively exploring ways to bring this system to life.

According to a report from ET, it’s anticipated that NBBL will pave the way for these transactions as soon as next month.

“We’re currently in talks with major players in the online banking community to figure out the best approach for implementation,” said a banker, as cited in the report.

You’ll find HDFC Bank, ICICI Bank, and SBI among the key players in this field. On March 4, RBI Governor Shaktikanta Das hinted at the launch of a convenient payment system for online banking in 2024. This system aims to speed up fund transfers for sellers, making transactions smoother.

He mentioned that the central bank has already given the green light to NBBL for the project. To give you some context, Bharat BillPay serves as a unified platform that links banks, non-banks involved in bill aggregation, billers, payment service providers, and retail bill outlets.

Influence of the RBI's 'Payments Vision 2025'

This decision aligns with the RBI’s ‘Payments Vision 2025’. According to the official document, the central bank aims to triple the number of digital payment transactions by 2025 and significantly reduce the reliance on cheque-based payments, aiming for less than 0.25% of total retail payments.

Significance of Internet Banking and Digital Transactions

During the announcement, Das emphasized the significance of internet banking for various payments such as income tax, insurance premiums, and mutual fund payments. However, he pointed out that these transactions, managed through payment aggregators (PAs), currently lack interoperability. Das expressed confidence that establishing an interoperable payment system would enhance user trust in digital payments.

Enhancing Interoperability and User Trust in Digital Payments

According to RBI data, banks processed approximately 380 million internet banking transactions amounting to INR 93.8 lakh crore in December 2023. In a recent statement, Das highlighted the remarkable growth of digital transactions in India. He noted that the total digital transactions surged to 14,726 crore in the fiscal year 2023-24 (up to February 2024), marking a substantial increase from just 162 crore transactions recorded in 2012-13, demonstrating a ninety-fold increase.

The Reserve Bank of India (RBI) has approved the NPCI Bharat Billpay (NBBL) system, paving the way for a seamless online banking payment system. Major banks and fintech companies are actively exploring its implementation, with an anticipated launch as early as next month. This initiative aligns with the RBI’s ‘Payments Vision 2025’, aiming to triple digital payment transactions by 2025 and reduce reliance on cheque-based payments. RBI Governor Shaktikanta Das highlighted the remarkable growth of digital transactions in India, citing a substantial increase from 162 crore to 14,726 crore transactions from 2012-13 to the fiscal year 2023-24.

Neha Kamath

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