A revolution in internet banking transactions is coming soon

A revolution in internet banking transactions is coming soon:

NPCI In Talks With Banks, Fintechs To Implement Interoperable Payment System for Net Banking

The NPCI Bharat Billpay is likely to enable interoperable payment system for net banking as early as next month

The development comes weeks after the RBI governor said that an interoperable payment system for net banking was likely to be launched in 2024

The RBI plans to bolster the number of digital payment transactions by over 3X by 2025 and curb the volume of cheque-based payments to less than 0.25% of the total retail payments

Following the Reserve Bank of India’s (RBI’s) approval for the launch of an interoperable payment system for net banking, NPCI Bharat Billpay (NBBL), various banks and fintech firms have reportedly started discussions to implement the same.

As per an ET report, the NBBL is likely to enable such transactions as early as next month.

“Currently, conversations are happening with the large participants in the net banking ecosystem to find the right implementation strategy,” a banker was quoted as saying.

It is pertinent to note that HDFC Bank, ICICI Bank, and SBI are among the major players in this space.

On March 4, RBI governor Shaktikanta Das said that an interoperable payment system for net banking was likely to be launched in 2024 to facilitate quicker settlement of funds for merchants.

He said that the central bank has already granted the approval to NBBL for the project For reference, Bharat BillPay is an integrated ecosystem connecting banks and non-banks in bills aggregation business, billers, payment service providers and retail bill outlets.

The move was a part of the RBI’s ’Payments Vision 2025’. In the document, the central bank said it was aiming to increase the number of digital payment transactions by over 3X by 2025 and curb the volume of cheque-based payments to less than 0.25% of the total retail payments.

Das noted during the announcement that though internet banking is a preferred mode for payments including income tax, insurance premiums, and mutual fund payments, these transactions processed through payment aggregators (PAs) are not interoperable currently. The interoperable payment system would boost user confidence in digital payments, he said.

As per the RBI data, about 380 Mn internet banking transactions worth INR 93.8 Lakh Cr were processed by banks in December 2023.

Overall, digital transactions in India grew to 14,726 Cr in 2023-24 (till February 2024), a 90X jump from 162 Cr transactions in 2012-13, Das recently said.