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Credit card payments through Cred and PhonePe to be unavailable after this date
Major banks, including Axis Bank, HDFC Bank, and ICICI Bank, which collectively have issued over 50 million credit cards, have yet to comply with BBPS regulations.
As a result, customers will be unable to pay their credit card bills through fintech platforms like Cred and PhonePe after June 30 unless these banks meet the new mandate.
Fintech companies such as PhonePe, Cred, BillDesk, and Infibeam Avenues are among those affected by the latest RBI regulation requiring credit card bill payments to be routed through the RBI’s centralized billing network, effective July 1.
RBI’s Directive for Centralized Payments
The Reserve Bank of India (RBI) has mandated that all credit card payments must be processed through the Bharat Bill Payment System (BBPS) by June 30. Although fintech companies like PhonePe and Cred are members of BBPS, they will be unable to facilitate credit card payments if the issuing banks do not comply with the new regulations.
Industry Requests Deadline Extension
To ensure the smooth continuation of fintech operations, lenders must adhere to RBI regulations by the June 30 deadline. The payments industry has requested a 90-day extension, according to the CEO of a major payments company.
Currently, only eight out of the 34 authorized credit card-issuing banks have enabled bill payments on BBPS. These compliant banks include Federal Bank, Kotak Mahindra, IndusInd Bank, SBI Card, and BoB Card.
Reason Behind RBI’s Centralization Requirement
The RBI’s initiative to centralize credit card bill payments aims to enhance the detection and prevention of fraudulent transactions while providing greater insight into payment patterns.
Industry participants believe this centralization will significantly improve the RBI’s ability to monitor and regulate payment activities more effectively.
Source: zeebiz.com
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