How NPCI’s Bharat Connect simplifies B2B payments for small businesses

MUMBAI: After establishing a strong presence in the retail payments ecosystem, NPCI Bharat Connect is now developing a connected payments platform for small businesses.

The B2B platform was formerly known as NPCI Bharat BillPay Ltd. CEO Noopur said that the platform is developing digital infrastructure for India’s 63 million micro, small and medium enterprises, which account for 30-35% of India’s GDP and employ about 110 million people. Chaturvedi.

“What we try to do is get all the systems talking to each other, eliminate inefficiencies, make reconciliation easier, and create a digital trail that helps formalize credit. That’s definitely part of the process,” Cha said Tuweidi tells us. Mint.

“While larger businesses have the advantage of very sophisticated systems and bespoke integrations and solutions from top banks, as you go further down the value chain the solutions are more general and don’t necessarily meet the needs of businesses of different sizes,” she said .

Bharat Connect enables interoperability between disparate systems, enabling small businesses to streamline operations and reduce time spent on payment tracking and dispute resolution.

Founded in 2017, NBBL’s Bharat Bill Payment System (BBPS) was initially envisioned as a bill payment solution but has now expanded into over 25 payment categories.

The platform currently handles more than 200 million transactions per month and aims to handle 1 billion transactions per month within two to three years. Mint reported earlier. There are currently 22,056 billers on the platform, and the transaction amount exceeds $1 trillion in October.

A separate B2B payments vertical for MSMEs was launched at the Global Fintech Festival in September 2024. In the initial stage, Trading volumes are expected to remain low for some time.

Currently, the product has entered the final stage of development and has been launched in a closed user group to test the stability of the system.

The pilot has been well received by bankers so far, as the product allows them to understand who is playing a role in the chain, what systems are being used and which banks they are working with – all of which can now interact with each other through the platform .

Chaturvedi said the volume of payments between retailers and distributors is high and efforts are being made to focus on facilitating end-to-end processing, adding that she hopes transaction volumes will pick up by the end of the current financial year.

There is currently no direct competition from Bharat Connect. The platform does not facilitate payments, but rather provides the infrastructure for these transactions (across different platforms, banking systems and B2B players) to be conducted in a standardized manner.

Also read: Reforming UPI system: We need sustainable digital payments infrastructure

How it works

“We assume the distributor uses Zoho or Tally to pay the wholesaler, who in turn needs to pay the manufacturer, who may be using SAP or Oracle. The problem is that all these systems cannot talk to each other,” Chaturvedi said.

“We are creating a standardization or common language for these different enterprise resource planning (ERP) can interact with each other. We are the first country to create a platform that allows different ERPs to talk to each other,” she added.

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Chaturvedi said the company was first considering venturing into the B2B payments space while seeking approval from the Reserve Bank of India for retail payments.

“That’s where the whole thought process came from, could we do something to solve the B2B collections problem that exists across countries,” Chaturvedi said. The idea, he added, was to provide an “upstream solution” to retailers ( B2C or retail) problem has been solved through NPCI’s UPI (Unified Payments Interface), RuPay and other such options.

We are the first country to create a platform that allows different ERPs to talk to each other.

Build data

Routing large volumes of retail and MSME transactions through the platform means creating an organic database. However, Chaturvedi said the NPCI subsidiary has no plans to play the role of a data aggregator so far.

“We are not building it (data) and we are not going to build it. Now, tomorrow the Reserve Bank of India will probably come to us and say your data can also be used on account aggregation platforms, and then we will do that. The RBI may also say to make Bharat Connect data and B2B data available for ULI (Unified Lending Interface) so that we can do that anytime,” she said, adding that the platform will also “explore synergies with ULI over time With the passage of time.

Also read: NPCI may have sparked a revolution in pre-approved UPI loans

The platform acts as a “switch” or intermediary for transaction settlement, charging a switching fee for each transaction processed. Chaturvedi said that for retail payments this is usually a fixed figure, but the fee structure for B2B payments is still being worked out in consultation with entities that have joined the platform.

But she doesn’t care about income right now. “B2B is a sector waiting to be disrupted, always waiting for an interoperable solution that doesn’t exist yet. Solving this problem will spawn the next 100 unicorns in the next three to four years. So regardless of revenue share, at least “Much of our focus over the next two to three years will be on this new program.”

“Revenue will follow, but value creation and innovation are more important; revenue is an outcome, not an input,” she said.