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Credit card payments through Cred and PhonePe to be unavailable after this date

Fintech companies such as PhonePe, Cred, BillDesk, and Infibeam Avenues are among those impacted by the latest RBI regulation requiring credit card bill payments to be routed through the RBI’s centralised billing network. This regulation takes effect on July 1.

Major banks like Axis Bank, HDFC Bank, and ICICI Bank, which have issued over 50 million credit cards, have yet to enable BBPS compliance. Consequently, customers will be unable to pay their credit card bills through fintech platforms like Cred and PhonePe after June 30 unless these banks comply with the new mandate.

RBI’s Directive for Centralised Payments

The Reserve Bank of India (RBI) has mandated that all credit card payments be processed through the Bharat Bill Payment System (BBPS) by June 30. Despite fintech companies like PhonePe and Cred being members of BBPS, they will be unable to handle credit card payments if the issuing banks fail to comply with the new regulations.

Industry Requests Deadline Extension

For fintech operations to continue smoothly, lenders must adhere to RBI regulations by the June 30 deadline. The payments industry has sought a 90-day extension, as stated by the CEO of a major payments company.

Currently, only eight out of the 34 authorised credit card-issuing banks have enabled bill payments on BBPS. These include Federal Bank, Kotak Mahindra, IndusInd Bank, SBI Card, and BoB Card.

Reason Behind RBI’s Centralisation Requirement

The RBI’s 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.

Industry participants believe this centralisation will enhance the RBI’s ability to monitor and regulate payment activities more effectively.

Content Source: www.zeebiz.com

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