Soon, Janeshwar, a migrant labourer in Kerala, will not have to plead his family members in UP to trudge several miles to make payment for utility services. Janeshwar will be able to walk into a kirana store, a bank branch or a unit of a digital wallet company in Kerala, where his work has taken him, and make the utility bill payment for his house in UP. This will be possible once the Bharat Bill Payment System (BBPS), a framework created by the RBI, becomes operational. The common outlet to pay utility services bills is mainly aimed at those for whom netbanking is not a way of life.What is co-mmon between Jan-Dhan, a financial inclusion programme, and BBPS is that it makes access to bill payments universal. BBPS is a centralised bill payment system which gathers details of bills issued by utility services such as electricity, water, gas, telephone, DTH and insurance companies and facilitates payment instantly across India. Any bank or a payment company that plugs into BBPS can allow its customers to view and pay bills. The system comprises a digital platform called Bharat Bill Payment Central Unit (BBPCU) operated by the National Payments Corporation of India and a network of existing players called Bharat Bill Payment Operating Units (BBPOUs). BBPCU will plug in all billers into a central server. The operating units (BBPOUs) will comprise two sets of players — banks and wallet companies like Paytm, Oxigen, Mobikwik and Itz Cash on one hand and aggregators like BillDesk, TechProcess, Citrus Pay and Euronet on the other.For making payments through BBPS, customers will have to get registered either online or through a BBPOU, which will be set up in a few weeks. Once they have a BBPOU customer ID, they can access their bills through any of the operating units, view the bill and make payments through multiple modes such as netbanking, credit/debt cards, e-wallets and cash in case of offline mode, and get instant confirmation. A bank can provide an interface through an ATM as well.How will BBPS change payment dynamics? “BBPS will open up avenues for service providers by giving them thousands of collection centres from Day One,” said Anand Ramachandran, chief financial officer at TechProcess, which owns the payment gateway Billjunction. And apart from utilities and insurance companies, he expects the system to facilitate payments for educational institutions as well. Once BBPS becomes operational, companies can free up hundreds of collection centers and bring down bill collection costs. Alternatively, some of them can farm out their collection centers to become a BBPOU and collect bills for all providers, Ramachandran adds.Also, BBPS will level the playing field for payment companies, said Amrish Rau, CEO, Citrus Pay, which has applied for an operating unit licence. Since billers will have the same reach irrespective of the aggregator they choose, they are likely to go with the player delivering the best value, said Rau. At present, payment companies like BillDesk (valued at over $1 billion) dominate the aggregation business.Most of the payment companies are keen to tie up with BillDesk because of the sheer number of utilities — like mobile & fixed-line telephony — and insurance companies that it brings in. This also encourages utilities to turn to BillDesk.Naveen Surya, MD of Itz Cash, which recorded Rs 6,000 crore worth transactions in the utility bill payments space, expects volumes to more than double at Rs 15,000 crore in FY17 once BBPS becomes functional. The operationalization of BBPS is likely to trigger a bidding war for existing companies and would lead to expansion in the market for bill payments. For instance, TechProcess, in anticipation of BBPS, plans to tie up with 2,000 educational institutes involving fee payments of around Rs 500 crore.For much of India’s middle class with access to internet banking, bill payment is not a challenge. This is because of bilateral agreements between payment banks and aggregators, which bring in billers, a bit like earlier ATM networks. In the past, there was an ATM-sharing arrangement among PSU banks through bilateral pacts. But with the RBI creating the National Financial Switch (NFS), all banks and ATMs got connected. Similarly, banks will now have to merely plug into BBPS where all billers will be present.A key driver of growth for the e-wallet companies has been the recharge business. Companies have built their fortunes on the back of recharging prepaid mobile phones and direct-to-home television channels — estimated to be over Rs 2 lakh crore annually. The next big opportunity for the payment industry is thrice as large — over Rs 6 lakh crore. According to a report by Axis Bank, at present 25% of bill payment transactions are done using electronic channels and ECS (Electronic Clearing Service). By 2020, 50% of all bill payment transactions will be made using electronic channels.