The Reserve Bank of India (RBI) panel on Tuesday mooted ‘India Bill Payment System’ (IBPS), a GIRO-based electronic bill payment system for payment of dues of essential services, insurance premia, utility payments, taxes, university fees, examination fees and school fees.
This model will enable the setting up of a centralised infrastructure bringing all the billers and banks to the bill platform through the aggregators.
It will also allow interoperability in the bill payment process and enable the consumers to make payments at any of the collection points, which is the essence of GIRO system.
Improving settlement system
GIRO payment is a credit push transaction initiated by the payer and may involve the presence of three banks (collecting bank, payer bank and the payee bank). Bill paying public/customers can access any payment channel through banks/non-bank entity under the proposed GIRO system.
This is part of the ongoing efforts of the central bank in improving payment and settlement systems as laid out in its Payment Systems vision (2012-15).
The RBI has released the report of the committee set up to study the feasibility of implementation of the GIRO-based payment system in India under the chairmanship of G. Padmanabhan, Executive Director.
“To enhance consumer confidence and acceptance of the IBPS, a service mark/logo should be designed and displayed on the bills as well as the IBPS points, where payments are accepted,” the committee recommended in its report, adding “the consumer should be provided with an instant receipt by the IBPS, acknowledging the receipt of the payment.
The receipt should have the unique reference number generated by the IBPS and also carry the IBPS service mark/logo. The payment made by a consumer would be irrefutable.”
The RBI has invited comments from the public by June 15 on the recommendations of the committee before looking into their implementation.
Safeguarding privacy
At present, there is no standardised system of bill data codification across billers. However, the IBPS would support the prevalent mode of bill presentment, which is largely paper-based and also encourage electronic presentment. Mobile number/Aadhaar-based mapping for payers and billers could also be undertaken while safeguarding the consumers’ privacy at the same time.
Further, the payment information from the IBPS point should flow online to help minimise reconciliation issues and customer grievances.
The billers/businesses which may not be able to provide/support online flow of payment information may leverage the aggregators’ capability in this regard.
“The IBPS should enable acceptance of all payment instruments, including cash at the IBPS points,” the committee recommended. “The system should provide for acceptance of payments at any IBPS outlet, including bank branches and ATMs. It should also facilitate acceptance of payments through IVRS, net banking and mobile banking.”
Fund settlement for the transactions through the IBPS will be undertaken by IBPS at periodical intervals. Non-bank entities will identify a sponsor bank and notify the same to IBPS for the purpose of fund settlement. The IBPS will provide for online registration of complaints from customers and the first point of contact (bank branches/customer service point receiving the payment) would provide customer support. But the customer grievances related to bill payment will have to be attended to by the biller and IBPS/aggregator would provide the necessary support to the billers in this regard.
Ideally, the committee recommended that a separate organisation needs to be set up to operate and manage the IBPS in a professional manner and the operations of the organisation should be run on commercial lines. The organisation should have an advisory body/steering committee with representations from billers, aggregators, banks, payment networks, customers and others. “The new organisation could be authorised by the RBI under the Payment and Settlement Systems Act, 2007, to operate the IBPS,” it added.
