Mumbai/IBNS: Billdesk, Cred, PhonePe, and Infibeam Avenues are among the fintech companies that will be impacted by the latest regulation of the Reserve Bank of India (RBI) requiring credit card bill payments to be routed through the central banks centralised billing network.
This new RBI regulation will take effect on July 1, reports said.
Major Indian private sector banks like Axis Bank, HDFC Bank, and ICICI Bank, which have issued over 50 million credit cards, have yet to enable Bharat Bill Payment System (BBPS) compliance, and as a result, customers will be unable to pay their credit card bills through fintech platforms like PhonePe and Cred after June 30 unless these banks comply with the new mandate.
The RBI has mandated that all credit card payments be processed through the BBPS by June 30.
Despite fintech companies like Cred and PhonePe being members of BBPS, they will be unable to handle credit card payments if the issuing banks fail to comply with the new RBI regulations.
As per reports, for fintech operations to continue smoothly, lenders must adhere to the central banks regulations by the June 30 deadline, while the payments industry has sought a 90-day extension.
Presently, only eight out of the 34 authorised credit card-issuing banks, including Federal Bank, Kotak Mahindra, IndusInd Bank, SBI Card, and BoB Card, have enabled bill payments on BBPS.
The Reserve Bank of Indias move to centralise credit card bill payments aims to help the central bank identify and stop fraudulent transactions while providing greater insight into payment patterns, according to reports.
Industry experts believe this centralisation of credit card bill payments will enhance the central banks ability to monitor and regulate payment activities more effectively.
