You may not know much about payments company BillDesk, but if, like millions of other Indians, you’ve paid a bill online, you’ve almost certainly benefited from their services. After all, the company’s market share in the digital payments space is close to 80%, according to industry observers.

It wouldn’t be a stretch to say that BillDesk is to India’s digital payments sector what Google is to online searches. The company processes payments worth almost $40 billion annually and has seen profits roll in year after year. In FY17, the company was just Rs 50 crore ($7.5 million) shy of crossing Rs 1000 crore ($149 million) in revenue, according to financials sourced from Paper.vc. Presently, BillDesk is valued at over $1 billion.

This success has not come easy. When Mumbai-based BillDesk began operations 18 years ago, internet banking in India didn’t even exist. BillDesk did the grunt work of integrating with over 80 billers across sectors. On the other end, it integrated with banks so that banks’ customers could pay their bills straight from their savings account. Billers paid BillDesk a fee for this. It was straightforward.

Not a marginal difference

The margins on the bill payment business are higher than the payment gateway business. “One can earn, on an average, Rs 4 to Rs 5 per bill. But on the payment gateway, the margins are limited to about Rs 1 to Rs 2,” said Harshil Mathur, CEO of RazorPay.

Today, BillDesk does two things. As a payment gateway, it helps merchants such as Amazon accept payments through multiple payment methods. As a payment aggregator, it helps utility providers such as Tata Power, Airtel and Maharashtra State Electricity Distribution Co to accept bill payments.

Now though, this stellar growth story could be derailed by the National Payments Corporation of India (NPCI) and its Bharat BillPay System. Bharat BillPay threatens to derail everything BillDesk has built thus far by standardising the bill payments aggregator business and undoing the tie-ups that BillDesk has built up over almost two decades. 

The not-so-great equaliser  

Conceptualised by the Reserve Bank of India but built and run by NPCI, BillPay has actually been around for almost a year. NPCI runs the Bharat BillPay platform alongside other payment methods like ATMs, IMPS and the Unified Payments Interface (UPI).

Bharat BillPay makes life easy for most of the stakeholders in the bill payment ecosystem. Consumers can pay all their bills in one place. Payment apps and retail outlets need not form individual partnerships with billers. Billers also benefit—they will have the option to work with more aggregators.

AUTHOR

Arundhati Ramanathan

Arundhati is Bengaluru-based. She is interested in how people use money in the digital age and how new economies will take shape based on that interaction. She has spent over 10 years reporting and writing on various subjects. Previous stints were at Mint, Outlook Business and Reuters.

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