NPCI To Spin-Off Bharat BillPay Into A Separate Entity

• National Payments Corporation Of India (NPCI) is set to make Bharat BillPay a separate entity.
• The new entity will be wholly-owned by NPCI.
• NPCI recently announced a 30% cap on the total volume of UPI transactions through Third-Party App Providers (TPAPs).

The National Payments Corporation Of India (NPCI) is planning to spin off Bharat BillPay payments business into a separate subsidiary.

Bharat BillPay will be a wholly-owned second subsidiary after NPCI International Payments (NPIL), which takes care of deployment of the RuPay card scheme and Unified Payments Interface (UPI) outside of India.

With this development, NPCI will make a fresh investment into Bharat BillPay. Meanwhile, The Reserve Bank Of India has approved the transaction.

The bill payments platform is being spun off into a separate entity so that it can be managed better at a time when it is in the growth stage, said sources to Financial Express.

"The systems are growing and this is the right time for NPCI to create a dedicated focus. For them the objective now is to grow Bharat BillPay exponentially without any dependence on NPCI," said a senior industry executive.

NPCI is currently looking for a new CEO (Chief Executive Officer) to lead Bharat BillPay and its operations.

In mid-November 2020, NPCI (National Payments Corporation Of India) had announced the 30% cap on the volume of transactions via NPCI introduced UPI (Unified Payments Interface) through third-party app providers (TPAPs), starting from January next year. This was done to address the risks and protect the UPI ecosystem as it further grows up.

Currently, NPCI owned Bharat BillPay offers various payment services, including bill payments for electricity, telecom, direct-to-home (DTH), gas pipeline, education fees, municipal taxes, and hospitals.

Last month, NPCI said that the BBPS (Bharat BillPay System) clocked over 22 million transactions worth Rs 3,438 crore (or about $464 million), which is slightly less compared to the October month transactions.

The COVID-19 pandemic led people to pay through digital modes, like UPI, which crossed 2 billion transactions, processing Rs 3.86 lakh crore in October 2020.

The announcement comes at a time when the corporates and startups are gearing up to apply for a new umbrella entity (NUE) licenses, which will help them to set up their own pan-India retail payment network.

In November 2020, NPCI had broad-based its shareholding by allowing small finance banks, payments banks, and fintech companies to become shareholders in the organization. It placed 4.63% of its equity shares worth Rs 81.64 crore with 19 RBI-regulated entities.

As per the reports, The new shareholders include Amazon Pay, PayU Payments, PhonePe, and One Mobikwik Systems.

NPCI (The National Payments Corporation Of India), which was set up in 2008 by the Reserve bank of India and the Indian Banks' Association (IBA) to create a robust payment & settlement infrastructure in the country.

The organization currently offers UPI (Unified Payments Interface, IMPS (Immediate Payment Service), NFS (National Financial Switch), and Aadhar-enabled payment system.

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