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CashlessConsumer Study Circle - BBPS

Srikanth L (@logic)

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Agenda

  • Introduction - CashlessConsumer
  • History, Policy, Regulation - BBPS
  • Technical Specification - Reading
  • BBPS Sandbox - Demo
  • Privacy, Data Governance in BBPS
  • Q & A

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CashlessConsumer

  • Consumer Collective on digital payments since Dec 2016 voicing consumer perspectives on digital payments.
  • Work on broadly
    • Advocacy
    • Awareness
    • Technology
    • Data
    • Policy
  • We are open, OSS friendly community.

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101- What is BBPS

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  • Centralized, Interoperable, multi channel bill collection payment system
  • Bill Categories
    • Utility Bills - Electricity, Water, Postpaid Mobile, DTH, Gas
    • Fees - Subscriptions, School fees, Colleges fees
    • Recurring Payables - EMI, Premiums, MF, Credit Card Bill Payments
  • Multi Channel
    • Bank, Web, Mobile, Kiosk, ATM, Agent,

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101- What is BBPS

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History of Bill Payments in India

  • Cash at collection point.
  • Electronic Bill Presentment and Payment - EBPP - 2001 Internet Banking report (Swedish reference - 1998)
  • ECS - SI -- (2000-2010 / 2015 / 2020)
  • Online Bill Payment - Credit / Debit / Netbanking - 2007(?) - 2020
  • eSeva, Bangalore One - Cash through agent network. -- 2010 - 2015/2020
  • Wallets / ATM(?) - 2013 - 2020
  • GIRO - GAG Report.
  • BBPS - 2017 onwards -- All channels subsumed into single network.

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Path to BBPS - GIRO - GAG - Reports

  • GIRO Report (May 2013)
    • GIRO - Credit based push against Cheque - Debit based pull.
    • Landscape - Electricity sector -- More in Data Governance / Economic Impact.
    • Opportunities
    • Reduction of Cash / cheque usage.
    • Lack of trust in agent model and preference towards Biller Owned Collection Points.
    • Absence of Interoperability - Leveling the playing field - Shuffle - Creative destruction.
    • Licensing framework for EBPP
    • Channel / Mode convergence to single network.
    • Global study - SADAD Model → Preference to online mode.

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Path to BBPS - GIRO / GAG Reports

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  • GAG Report (Apr 2014)
    • Name change to BBPS
    • BBPSCU - BBPSOU tiered Model
    • Licensing for BBPSCU - Favourable treatment for NPCI (NPCI or NPCI like)
  • July 2017 - NPCI gets approval for BBPSCU.

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Regulatory Policy

  • Compulsory licensing of existing players as BBPSOUs.
  • Agent enrollment
  • All 3rd party bill payments has to be through BBPS (Homework to lawyers)
  • 1st party bill payments can still be outside BBPS
  • Expansion of biller categories - Sep 2019
  • On-tap authorisation of non bank BBPSOUs - Oct 2019

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Business

  • Competition in aggregator space (Is it ?)
  • Unification of mobile payment agents
  • BBPS as key driver to UPI
  • Convenience fee model - unregulated.
  • School fees - June 2020
  • Trust on agents - (?) - Settlement Time ?
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Technical Specifications

Reading Time

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Demo Time

Playing with Sandbox

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Privacy, Data Governance in BBPS

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  • Privacy in Bill Payments
  • Electricity Sector / Collection problem - Segway and role of data.
  • Public Credit Registry - Utility data in credit scoring / Alt scoring
  • CashlessConsumer #PrivacyBreach
  • Ending bilateral ties.

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Privacy in Bill Payments

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  • Did it exist before ?
  • What did BBPS do ?
  • What can be inferred from a bill
    • Tenent - Landlord relationship
    • Payables / Outflows from a household - Household scoring. (Making households data rich)
    • Consumption patterns, holidays, foreign travel
    • Ability to pay - Payment behaviours.
    • More targetted profiling.
  • Privacy for business - Agent networks - Receivables data - Collection performance.
  • PMLA!
  • Machine friendly, (mobile, Aadhaar) identity linked data.

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Electricity Sector / Collection problem

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  • Can the poor afford electricity - Story of electrification of India
  • State (govt) ownership of DISCOM, financial status of PSU DISCOMs, electricity subsidy
  • Data collection for power DBT + Valuation of DISCOMs using Receivable data.
  • AatmaNirbhar Bharat - Privatisation of DISCOMs - Water Utilities
  • Collection problem exist across sectors
    • Internet - BharatNet
    • Payday loans / Digital Lending.
    • Low ticket size collections.
  • Who owns all this data? - Aggregate Non Personal Data (NPD)

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Credit Profiling / Alt - Financial data

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  • Utility data in credit scoring / Alt scoring
    • Spending pattern
    • Defaults
    • Full / Part payment - Credit Card / School fees / SIP etc.
  • Loans to pay bills
  • Customer profile of business to score business.
  • Public Credit Registry -> Pulling BBPS data.

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CashlessConsumer #PrivacyBreach

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  • Breach Report - Oct 2018
  • NPCI Circular - Nov 1, 2018 -> mandates consent and asks opt-out from 1.1.2019
  • Bill fetch continues in 2020
  • Fetch ratio - 7
  • Pay 1st party.

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Credit Profiling / Alt - Financial data

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  • Utility data in credit scoring / Alt scoring
    • Spending pattern
    • Defaults
    • Full / Part payment - Credit Card / School fees / SIP etc.
  • Loans to pay bills
  • Customer profile of business to score business.
  • Public Credit Registry -> Pulling BBPS data.

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Ending Bilateral ties

  • Another homework for lawyers
  • Making bill payments - Totalitarian
  • Right to make contracts when part of network
  • Right to Privacy - ( ? )

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Q & A

Discussion