Spice Digital announced that it has got the final Certificate of Authorization (COA) from the Reserve Bank of India (RBI) to set-up as an operating unit under the Bharat Bill Payment System. It had received an in-principle approval from the RBI back in May 2016.

Spice Digital joins other non-bank entities such as Oxigen, PayU, TechProcess Payment Services, Euronet and Paytm to set up a Bharat Bill Payment Operating Unit (BBPOU). As of now, 24 bill payment operating entities have been authorized, including 18 banks and 6 non-bank entities.

BBPOUs are units which can create an agent network and will be responsible for on-boarding billers and aggregators. In addition, they will be responsible for transaction handling, infrastructure development and application development, including APIs. The BBPS intends to offer an interoperable and accessible bill payment service to customers through a network of agents, enabling multiple payment modes, and providing instant confirmation of payment.

On the BBPS, a customer can pay a bill even if an operating unit does not have a direct agreement for bill payments. For example, a customer of Reliance Energy will be able to pay his electricity bill at any Oxigen outlet even though the two companies do not have a direct agreement for payments.

The NPCI, while conducting pilot trials for the BBPS, said that a bulk of the payments were towards electricity bills, and only around 10% of the 180 million electricity bill payments are digital. “The likelihood of meeting the target of generating 25 billion digital transactions during the current financial year depends critically on the power sector getting on-boarded on BBPS system”, it said. Together, Electricity, Telecom, DTH, Water and Gas account for 450 million bills.

NPCI gets BBPCU approval

Meanwhile, the National Payments Corporation of India (NPCI) also got its final approval to act as the Bharat Bill Payment Central Unit (BBPCU), last month. A BBPCU is an entity responsible for clearing and settling activities related to transactions routed through bill payment systems, and setting up the operational, technical and business standards for the entire system. It will have to put in place a dispute resolution mechanism to handle disputes arising between system participants, and ensure the setting up of a suitable fraud and risk management framework for the BBPS.