Now, users can’t make credit card repayments on third party apps | Banking
Now, users can’t make credit card repayments on third party apps | Banking
Beginning July 1, credit card users will be unable to make repayments on third party fintech applications for banks that have not come on board Bharat Bill Payments System (BBPS).
Many players that Business Standard spoke to said they will pause credit card payment for banks that have not gone live.
Some of the fintechs that will get impacted include Cred, Paytm, Phonepe and Amazon Pay, among others.
“In line with RBI guidelines, we will facilitate credit card bill payments only for banks that are part of the Bharat Bill Payment System (BBPS) starting from July 1st, underscoring our commitment to adhering to regulatory guidelines and providing compliant payment solutions to our users,” a Paytm spokesperson said.
“Some of the industry players have decided that they will not process such payments for non-compliant lenders. Third party entities will not be able to process such transactions or use any other alternative to do so,” a senior executive at a fintech major said.
Senior fintech executives said some firms may process credit card transactions for non-compliant banks, but doing so would be a violation of RBI norms.
“It will depend on the risk appetite of a player if they continue, but it will be in violation of the RBI regulations. Ideally, most banks could have come on board by now, but with the deadline closed in, the industry expects they will fast-track the process,” an industry executive added.
HDFC Bank, ICICI Bank, Axis Bank, among a few other major credit card issues in the country have not activated BBPS yet, sources said.
However, they are in the process of getting on board, people familiar with the matter said.
Another executive at a fintech major added that the RBI circular on BBPS dated February this year is aimed at banks and fintechs going live with the bill payment system.
“There is no problem with us processing credit card payments for banks that are not live yet, through other rails till the time they come on BBPS,” an executive with a fintech firm added.
Meanwhile, companies like Cred, who have their business models based on credit card payments may see short term disruption, sources added, until all banks are live.
The Bengaluru-based unicorn did not respond to Business Standard’s queries till press time.
An email sent to Paytm did not elicit response at the time of going to press.
The payments industry has requested a 90-day extension for the banks to get themselves live with BBPS. However, sources added that the banking regulator has not extended the June 30 deadline.
Fintech players bearing the brunt of the development were expecting a relaxation.
Meanwhile, credit card customers of major banks such as SBI Card, Kotak Mahindra Bank, IndusInd Bank, among four others would be able to process credit card dues on apps such as Cred, Paytm, PhonePe, among others since these banks have gone live on BBPS.
A shorter window to comply and delayed prioritisation of technology systems may have hindered banks’ efforts to comply with the BBPS interface, Business Standard reported last month.
BBPS is an integrated bill payment platform that enables payment and collection of bills through multiple channels including mobile apps, bank branches, among others.
First Published: Jun 30 2024 | 9:37 PM IST
