New RBI Rules: No More Credit Card Payments via Apps Like PhonePe, Amazon Pay & Paytm

Major banks like HDFC and Axis will discontinue third-party apps for credit card bill payments starting July 1 due to BBPS integration, impacting customers significantly.

Key Points

• Major banks like HDFC Bank and Axis Bank will discontinue third-party apps for credit card bill payments starting July 1.
• This change is due to the lack of integration with the Bharat Bill Payment System (BBPS).
• RBI mandates all credit card payments be routed through BBPS from July 1, 2024.
• Banks live on BBPS include ICICI Bank, Bank of Baroda, and others.
• HDFC Bank, Axis Bank, and others are still integrating with BBPS.
• BBPS offers integrated, reliable, and secure bill payment services.

As of July 1, customers with credit cards from major banks such as HDFC Bank and Axis Bank will no longer be able to use third-party applications like PhonePe, Amazon Pay, and Paytm to settle their credit card bills. This significant change arises due to the lack of integration of these apps with the Bharat Bill Payment System (BBPS), managed by the National Payments Corporation of India (NPCI). Consequently, customers will need to find alternative methods or use the banks’ own platforms for their credit card bill payments.

The Reserve Bank of India (RBI) has mandated that all credit card payments must be routed through the BBPS starting from July 1, 2024. This mandate is expected to substantially impact how credit card bill payments are processed in India. Fintech companies such as PhonePe and BillDesk are among those anticipating significant disruption.

According to a June 2024 report by The Economic Times, HDFC Bank, which has 20 million credit cards, and Axis Bank, with 14 million, have not yet enabled the BBPS. Industry insiders revealed that fintech companies are concerned about a potential substantial decline in transaction volumes due to this change.

Currently, credit cardholders have three main options for paying their monthly bills: auto-debit requirements, net banking (NEFT or IMPS), and third-party applications. With the discontinuation of third-party applications from June 30, customers will have to rely on the first two methods for their credit card payments.

The following banks are live on the Bharat Bill Payments under the credit card category as of July 3, 2024:

• AU Small Finance Bank
• Bank of Baroda
• Canara Bank
• Federal Bank
• ICICI Bank
• IDBI Bank
• IndusInd Bank
• Kotak Mahindra Bank
• Punjab National Bank
• Saraswat Bank

The following banks are still in the process of integrating with the Bharat Bill Payment System:

• Axis Bank
• HDFC Bank
• IDFC First Bank
• Indian Bank
• Indian Overseas Bank
• YES Bank

The Bharat Bill Payment System (BBPS) is an RBI-mandated system that offers integrated and interoperable bill payment services to customers across geographies with certainty, reliability, and safety of transactions. This system aims to streamline the bill payment process and enhance the user experience by ensuring that all transactions are secure and efficient.

With this transition, the BBPS system is expected to provide a more robust and reliable platform for credit card bill payments, ensuring that customers can manage their payments with ease and security. However, the immediate effect will be the inconvenience to customers who are accustomed to using third-party applications for their credit card bill payments.