PhonePe Outshines Competitors, Achieves 50% Growth in Digital Monthly Bill Payments

The National Payments Corporation of India (NPCI)-owned BBPS has experienced a significant 50% growth in digital utility bill payments over the past year. In May, the value of bill payments reached Rs 20,022 crore, compared to Rs 13,800 crore in the same month of the previous year. Since its launch in 2016, the Bharat Bill Payment System (BBPS) has become a comprehensive solution for both customers and billers, offering a centralized platform for utility and other bill payments. Banks and payment gateway companies integrate utility payment companies into the BBPS ecosystem, while UPI apps like PhonePe, Google Pay, Paytm, and Amazon Pay facilitate digital payments for customers.

The BBPS platform has witnessed remarkable growth in bill payments, with the number of payments increasing from 35 million in March 2021 to 105 million in May 2023, a three-fold growth in just two years. The value of bill payments has also surged from Rs 5,200 crore in March 2021 to Rs 20,000 crore in May 2023, nearly quadrupling in value. This growth can be attributed to the collaborative efforts of banks, payment gateways, and UPI apps like PhonePe, Paytm, and Google Pay in digitizing utility companies and facilitating consumer payments. CEO Noopur Chaturvedi credits this significant growth to the collective contributions of various stakeholders.

In an effort to expand its services, BBPS plans to enter the enterprise utility bill payment sector by partnering with startups this year. Although enterprise billing accounts for only 12-15% of total bills paid, it represents approximately 35% of the overall bill payment value. Currently, these payments are primarily made through methods such as RTGS, NEFT, or standing instructions within bank accounts. By incorporating high-value enterprise payments into the BBPS platform, the transaction value has the potential to double in the coming years. Chaturvedi highlights the importance of the enterprise segment and the need for a robust product to attract this market, citing the lack of real-time acknowledgement or reconciliation in the current system.

PhonePe, an app-based Customer Operating Unit (Customer BBPOU), is the market leader on the customer side of the Bharat Bill Payment System (BBPS). It holds a significant market share of approximately 46% in terms of the number of bills paid and over 50% in terms of the value of bill payments in April 2023.

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Google Pay and Amazon Pay have formed partnerships with Billdesk to operate their respective Customer BBPOUs. Combined, these two players hold a market share of 21% in terms of volume and 16% in terms of value within the BBPS ecosystem. Paytm Payments Bank secured a market share of 15% in terms of volume and 12.5% in terms of value.

Noopur Chaturvedi, who joined BBPS in August 2021, highlights the company’s focus on innovation and building partnerships since becoming an independent subsidiary. They are actively expanding in the assisted bill payment segment through Spice Money, particularly in small towns and rural areas, to contribute to digital inclusion. The addition of new categories such as loan repayment and Fastag has contributed to the accelerated growth of the company’s value in recent years. Prior to joining BBPS, Chaturvedi had experience working at PayU, a payment gateway firm, and Airtel Payments Bank.

In the initial years, electricity bill payments held a significant influence over the BBPS platform. However, in the past year, other categories such as loan repayment, Fastag (highway toll payment recharge), and DTH (Direct-to-Home) services have experienced impressive growth rates of 140%, 100%, and 200% respectively. Even in May this year, electricity bill payments accounted for 40% of the volume and 45% of the value market share on BBPS.

Noopur Chaturvedi reveals plans to further expand the platform by incorporating new categories such as mutual funds and gift funds. Additionally, BBPS aims to include more insurance and loan repayment options, as well as facilitate payments for municipal taxes and school fees.

Prior to the establishment of BBPS by RBI and NPCI in 2016, only 20% of bill payments were conducted digitally. However, the landscape has transformed significantly, and currently, over 70% of bill payments are carried out digitally. Previously, billers like banks, payment gateways, and mobile apps such as Paytm, Mobikwik, and Freecharge individually onboarded utility billers onto their respective platforms. With the advent of BBPS, billers are now transitioning to the BBPS platform through the operator BBPOU, streamlining the process and centralizing bill payment operations.