Credit card payment via apps to hit a hurdle after July 1
BBPS is an RBI initiative and is run by National Payments Corporation of India. It serves as a one-stop ecosystem for all types of bill payments.
If you pay your credit card bill through fintech apps like Cred, PhonePe, or Google Pay, be cautious. Your bill payment may get stuck from next month. From July 1, RBI has made it mandatory to make all bill payments through a centralized billing network. Therefore, payment of your credit card will be done through Bharat Bill Payment System (BBPS). However, out of the 34 banks issuing credit cards, only eight banks are linked with BBPS.
Fintech apps like Cred, PhonePe to go unavailable from July 1
BBPS was developed under RBI’s initiative. National Payments Corporation of India (NPCI) operates it and serves as a one-stop ecosystem for all types of bill payments. You can pay bills from anywhere and anytime through this system. BBPS provides a simple and reliable option for paying bills such as electricity, phone, DTH, gas, water, insurance premiums, SIPs and school fees at regular intervals.
Customers of 26 banks won’t be able to pay credit card bills through third-party platforms after June 30. Customers of these banks can make payments through their bank apps or net banking. Third-party aggregators like Cred, PhonePe, Google Pay, and Paytm are linked to BBPS. When you pay your credit card bill through Cred, the money is deducted from your bank account and reaches the bank issuing your credit card.
Ease of bills & tax tracking
The introduction of centralised billing system will help track all types of bills efficiently. It will facilitate better data for tax trends. It has come to the Income Tax Department’s notice that some individuals understate their annual income and spend significantly more through credit cards. So when payments are made through BBPS, agencies can easily trace where fraudulent funds are getting transferred . This will aid in catching fraudsters and recovering the amount.
While most of the banks are not yet part of this system, but are expected to join soon. Overall, RBI’s new initiative will bring transparency to bill payments. Additionally, it will also curb cyber fraud cases.