Bharat Connect aims to process 1 billion retail transactions per month in 2-3 years

Mumbai: National Payments Corporation of India’s arm NPCI Bharat BillPay Ltd (NBBL) aims to process 1 billion transactions a month in another 2-3 years, allowing the company to route 35-40% of all retail digital payments in the country through its Bharat Connect platform, according to chief executive officer Noopur Chaturvedi.

Formerly Bharat Bill Payment System, the Bharat Connect platform was conceptualized by the Reserve Bank of India (RBI) and launched in 2017. At the time of being hived off into a separate subsidiary in December 2020, it was processing around 25 million billing transactions a month, which has now grown to over 200 million a month. 

“There’s been a growth of 8-10 times over the last three years. Our ambition is to be able to process 1 billion transactions in a month for the core (retail) Bharat Connect. We want every household to use the platform at least three times a month,” Chaturvedi told Mint.

Market penetration

The estimates assume that the number of households in India will increase from 270-280 million to 300-330 million in the next 2-3 years. “If they process three transactions on our platform, then that gets us to the 1 billion number. We’ve reverse calculated in our existing categories and we think that with a billion transactions getting processed through our platform, we should have a market penetration of 35-40% in our categories of operation,” Chaturvedi said.

The platform processed 221 million transactions worth ₹87,187 crore in September this year—that’s an average of 7 million transactions worth around ₹2,500 crore every day. About 22,056 billers are live on the platform.

Yearly transactions have surged to 1.39 billion in FY24 from 74 million in FY19. In FY25 as of September, it  processed 1.08 billion transactions.

Bharat Connect is a centralized, RBI-regulated digital public infrastructure (DPI) that operates as a switch or medium for exchange of information and money between various payments ecosystem players from banks to fintechs. Unified Payments Interface (UPI) is one of the modes of payments on it. 

For example, in the case of electricity payments, platforms such as PhonePe or Cred would earlier tie up individually or bilaterally with different billers. However, with all these billers now linked to Bharat Connect, these platforms only need to partner with one platform for their users to be able to access all possible options of billers.

Standardization of payment systems

In exchange, the platform earns a flat ‘switching fee’ for every transaction that it processes or settles. The basic idea is to standardize payment systems and make them interoperable in addition to adding an extra layer of security.

Chaturvedi explained, “We are the biggest value exchange platform in the country, and we’re connecting all these different types of entities on the platform.”

According to Kunal Shah, founder of Cred, Bharat Connect is a “game-changer in digital public infrastructure, streamlining integration with billers and enabling instant, secure payments across all types of bills unlike any in the world”. It enables a convenient, real time and frictionless experience especially for the platform’s affluent members who juggle multiple recurring bills, he said.

Neutral partner

Initially envisaged for bill payment solutions for five categories, today the platform facilitates digital payments for bills, invoices, and investments for individuals and businesses in over 25 categories. This includes electricity payments, insurance premiums, investments under the National Pension System (NPS), collection services for billers and merchants, travel card recharge, education payments, property taxes, goods and services tax (GST), tax payments, and even loan repayments to more than 300 banks and non-bank lenders. 

Recently, RBI also mandated that all credit card repayments through third-party payment operators be routed through Bharat Connect.

“The transition of credit card bill payments to Bharat Connect rails extends this (convenience) to one of the highest value bills that members pay every month,” Cred’s Shah said. “As a certified COU (customer operating unit), our teams collaborated closely with NBBL to build and grow this category and onboard banks as billers while maintaining the member experience.”

Explaining the evolution of the platform, Chaturvedi said they went back to RBI multiple times and kept increasing the categories NPCI Bharat BillPay operated in.

“It was primarily when we were spun off as a separate subsidiary, did the focus start coming in,” Chaturvedi said. “At that point, we said that coming back to RBI for each approval may not be feasible and therefore we shared a two-by-three grid, saying that we want to aid all kinds of collections, be it from person-to-person, business or service provider-to-person or even government-to-person.”

True to name

The recent rebranding exercise to ‘Bharat Connect’ helped align the name with the increased scope of business operations and vision and shift away from what were traditionally ‘bills’ or recurring payments.

The ‘Bharat Bill Payment Solution’ name had a “bit of a redundancy in ‘bills’”, she said. The label of a ‘payments system’ led to confusion about the platform being a ‘payments instrument’ rather than an “instrument-agnostic” infrastructure.

“These two words were kind of coming in the way of our own thought process and ambition. We’re growing in leaps and bounds. I would like to assume that the fact that we’re neutral (outside of settlements) actually goes a long way in that,” Chaturvedi said, adding that the platform partners with all banks, fintechs, consumer apps and payment modes, directly or indirectly.

According to Vivek Mandhata, managing director and partner at consulting firm BCG, Bharat BillPay has democratised the distribution of bill payments. “If you’re a biller and you’re connected, then your bill can be produced, seen, paid anywhere; which nobody else can provide except a regulated network like this,” he said. 

The uptick in bill payments on the platform is evidence that they have a good product. As consumers have gone more and more digital and are using some of these payment apps a lot more for their daily payment activities, naturally Bharat BillPay is starting to become a part of their journey through these apps. “They are riding on the wave of the digital ecosystem through consumer-based platforms and users are very comfortable with these platforms,” he said.

Fixed deposits and MFs

The platform could also look at bank fixed deposits or mutual funds “if the opportunity comes in” given that it is conducive to supporting all kinds of financial transactions. However, there are no plans to become a consumer-facing platform to maintain this neutrality and avoid competing with partner payment service providers, she said.

“The same platform allows for a lot of other categories to be supported, and surprisingly for us, these categories and entities are coming to us and saying that if we come onto Bharat Connect, more customers will be able to transact and approach us more easily,” Chaturvedi said, citing the example of NPS investments now being available on over 500 apps and front-end platforms powered by Bharat Connect.

Expanding cross-border payments is also on the horizon as a part of Bharat Connect’s long-term vision. Currently, the platform’s cross-border business is limited to inward remittances or NRI bill payments through NPCI International, and the immediate focus will be on growing these remittance volumes and building the ecosystem.

“NPCI International has been able to bring more countries into the fold for transactions. That entity has been established to take NPCI products outside, so in the future too if we have any opportunities for cross-border, we will go through them,” Chaturvedi said.