NPCI Bharat Billpay (NBBL), along with banks and fintech firms, is in talks to start internet-based banking interoperability after getting regulatory approval earlier this month, the Economic Times reported. The NBBL could begin working on the infrastructure for such transactions in April.
The Reserve Bank of India (RBI) on March 4 approved the rollout of an interoperable system for internet banking transactions by NBBL, a subsidiary of National Payments Corporation of India (NPCI). RBI Governor Shaktikanta Das had said that the central bank is working to allow interoperability for internet banking transactions to facilitate quicker settlement of funds for merchants.
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A 2025 vision document said the RBI aims to centralise all payment rails within a unified system. Internet banking is now independent and the regulator intends to align it with processes like the Immediate Payment Service and the Real Time Gross Settlement and National Electronic Fund Transfer systems (NEFT).
Centralisation will allow standardisation of settlement cycles for merchants, visibility on data and proper customer grievance mechanisms, said the newspaper.
Das had said that transactions processed through payment aggregators (PAs) are not interoperable, meaning a bank is required to separately integrate with each PA of different online merchants.
Emphasising the need for secured digital transactions, Das had asserted that all operators and participants of authorised payment systems are required to do a time-bound resolution of failed transactions.
Internet banking primarily facilitates large payments such as those related to Income Tax, insurance premiums, mutual funds, and vendor transactions. Presently, individual banks must collaborate with specific payment aggregators to facilitate internet banking transactions for their customers. However, interoperability allows any aggregator to enable customers from any bank to conduct internet banking payments for online transactions.
According to the RBI data, banks processed around 380 million internet banking transactions amounting to Rs 93.8 trillion in December 2023. This data indicates an average transaction size of Rs 2.4 lakh. In contrast, the average Unified Payments Interface (UPI) transaction stands at Rs 1,500.
