Shailendra Thakur

Chief Transform Technology, NPCI Bharat Billpay Ltd. (NBBL)

Bharat Connect, formerly known as Bharat BillPay, was conceptualised by the Reserve Bank of India. It offers technological solutions to bring businesses and Customers under one system and facilitate payment collections. 

Supernova Award Category: 
Tech Optimization and Modernization
The Problem: 

India's economic growth in the recent past has been largely fueled and powered by its thriving Micro, Small and Medium Enterprise (MSME) ecosystem, that represents over 90% of all businesses by volume.  These businesses, of varying size and operational scale, are characterized by manual interventions in the ordering, payments and settlements process and sub-optimal tech stacks supporting business flows. An added layer of complexity is that the MSME eco-system is a multi-tiered value chain where you are simultaneously a customer and a supplier, which implies that when payments at even one node are delayed, the ripple effects percolate across the value chain.

All these challenges point to two key problems:

1. Limited Access to Working Capital Financing:
Given the high dependency of businesses on a limited number of customers for their operational cash flow and relatively longer cycle times for payment collection, businesses need timely and affordable working capital loans. However:
- proving the authenticity of an invoice is often a challenge in India, and this restrics the ability of a business to secure funding for its working capital needs. 
- generation of reliable records around collaterals for seeking funding (primarily trade receivables positions) is a challenge due to technology limitations and fragmented solutions
- significant challenges persist in accurately determining the working capital position of the businesses (largely represented by Receivables and Payables positions) due to sub-optimal technology solutions and the paper-reliant record keeping processes

2. Delayed and Incomplete Sharing of Business Transactions
- One of the major requirements for businesses is to ensure that interparty transactions are shared between them on a timely and accurate fashion and are acknowledged by the counterparty.  The inability or slippages in these exchanges usually result in disputes over payables and receivables, which in turn impact the operating cash flow, tax compliance (GST credit claim) as well as financing eligibility of businesses.  
- The problem is compounded due a disconnected and fragmented (multiple varieties, differing versions and deployment options) ecosystem of ERP and sales enablement solutions due to which businesses are forced to rely on paper or offline transaction document exchange.

The Solution: 

The Bharat Connect for Business (BCB) is an interoperable platform solution that addresses the root cause of several challenges faced by the MSME ecosystem, in so far as digital transaction exchange, payments and trade financing are concerned. The platform operates through a hub and spoke model with a core central unit that is built and maintained by NBBL, with ecosystem partners acting as the spokes and end points that integrate with the businesses through their respective ERP(s). 

The Results: 

This platform has delivered the following results:
- Near real-time digital exchange of all business transactions between counter-parties
- Out-of-the-box integration with all leading banks within India to enable real time payments and settlement
- AI-Powered Digital Onboarding, Complaints Management & Payment related Dispute Resolution
- Integration with the leading trade finance platform in India to ensure access to a variety of trade finance lenders
- Immutable and mutually synchronized transaction records improving trust and reducing disputes or manual reconcilliation needs

These results are enabled by the build-out of the following features:
1. AI-Powered Digital Onboarding - The platform enables dedicated digital onboarding options for ecosystem partners including ERP/ Sales solution service providers, banks and financing entities and for business entities through one of the ERP/ Sales solution providers.  The entire process, including Know your customer(KYC) is AI-enabled with a view to have a seamless experience while ensuring compliance with stringent guardrails laid down by the country's central bank.

2. Digital Document Exchange - The core capability of the platform enables businesses to exchange all of their business transactions with their counterparties in real/ near real time fashion through digital means. The transaction categories include Product Catalogue, Purchase orders, Down payments, Sales Invoices & Credit notes and Payments.  Digital acknowledgment of each such transaction is a standard feature.  The solution also enables digital exchange for Financing requests, Financing documents fetch, Offers, Acceptance and monitoring of request statuses.

3. Digital Multi-mode Payments - One of the core solution components allows for businesses to process real-time online payments to counterparties through AI-powered anti-money laundering (AML) and fraud controls. Such payments, once acknowledged by the counterparty allow for automated reconciliation of the payments against the invoices and helps businesses maintain a real time view of their Receivables and payables position.

4. Digital Trade Financing - The solution allows for businesses to seek trade financing with reference to specific invoices and their active outstanding balances, with the option for the prospective financier to seek additional information and clarification prior to releasing offers to the business.  

5. Complaints Management and Dispute Resolution - The solution also comprises of ancomplaint management system and online Dispute resolution system, deducted for any digital payments processed through the platform.

6. Automated Interbank Settlement - The platform also enables automated settlement of interbank fund transfers on the back of digital payments processed through the platform.  This component also ensure compliance with the payments and settlement controls and guardrails laid down by the Central Bank of the country.

Metrics: 

The Bharat connect for Business platform, within a year of its launch
1.Has Onboarded 15 ecosystem partners that in turn onboard businesses
2. Has  5000+ active businesses transacting over the platform
3. Handles invoices with value of ~3.5 BN USD per annum
4. Processes digital payments to the tune of 223 MN USD per annum
Currently The payments represent very small fraction of overall business payments in the country. It is expected to have a CAGR of >80% over the next 3-5 years
The aim is to onboard large segment (~50-60%) of MSME onboarded and perform business transactions via this platform

The Technology: 

Technology for nation scale systems must enable some fundamental aspects, few of them are:
•    Security, safety and trust 
•    Different scale and maturity of eco-system partners
•    Long term usability of protocol and backwards compatibility and agility – the art of delicate balancing 
•    Flexibility of deployment and connectivity
•    Architecture and design that enables future evolution in a manner that gains can be had by plugging in advancements in technology
•    Prevent vendor lock-in
•    Zero downtime, even for upgrades and updates with a target of 99.999% availability

The technology underlying the solution consists largely of open-source components spanning Application servers, Databases, monitoring and analytics. Open-source software allows a more nuanced control over software supply chain which is critical for Digital Public Infrastructure (DPI).
The salient aspects of the technology used are:

• Immutable audit trails for every transaction processed via the platform, enhancing trust and safety

• RESTful API: Enables connecting varied ERP solutions, delivers interoperable and reliable solution at nation scale 

• Cloud native: Microservices based architecture supporting plug and play capabilities that is critical for the functioning, scaling while enabling adoption of future advancements

• Data: The most critical component of any large system, the data model, storage and query engines are designed to support geo-redundancy with simultaneous transaction processing distributed across geographically separated locations. All this while preserving privacy, security, safety and integrity

• Analytics and Support: Privacy preserved data (In accordance with DPDP Act of India), becomes available in near real-time for support teams to enable quick resolution of issues pertaining to partners. 

• Quality assurance Automation: AI driven QA automation, generating functional cases for current development cycle. This enables us to rapidly develop and deploy new features – every 15 days, with all the security, stability and compatibility compliances

• Deployment: Considering this is a DPI, it is deployed in geo-distributed data centre(s) that are completely inhouse in terms of design, build and operate providing great control over the infrastructure supply chain

Disruptive Factor: 

The Bharat Connect B2B Platform has been architectured and engineered at Nation Scale, and is an integral part of India's Digital Public Infrastructure(DPI) stack. Salient Points include:

1. Pan-nation Single Platform for Digital Transaction Exchange - The platform acts as a pan-nation platform for exchanging business transactions with an intent to integrate and make interoperable the different point solutions that aim at a subset of transaction types/entities

2. Source & Target Agnostic - The platform is truly interoperable and allows for transactions originating from any source system to be exchanged with any target system, subject to compliance with the exchange protocols.  

3. Lowering of Average Transaction Costs - Given the significantly lower cost of operating over the platform and ease of onboarding, businesses can accrue significant cost savings per payment transaction processed over the platform in comparison with other payment methods.  The frequent settlement cycles of the platform allows for near real time funds receipt by the recipient as against a delayed receipt of funds using conventional methods.

4. Process Optimization at Scale - Ability to optimize Procure to pay, Invoice to cash, Invoice to pay and Order book Reconciliation processes by businesses

5. Trust and safety for all – Bring trust to the eco system via digital transactions with immutable and synchronized records

6. Built in India, Consumable for the World - The solution is built with standard digital document structures and content which are commonly used across the globe, thereby making the solution usable by any country.

Shining Moment: 

Launch of the solution at the prestigious Global Fintech Fest 2024 in India.The entire platform was defined, architected, built and deployed for ecosystem partner consumption within 150 days

Single transaction with highest value processed is of 1.4 Mil USD

>50% reduction in books reconcilliation efforts for a Quick commerce player and downstream enterprises. Also significant reduction in manual data entry errors 

About NPCI Bharat Billpay Ltd. (NBBL)

NPCI Bharat BillPay Limited (NBBL), a wholly-owned subsidiary of the National Payments Corporation of India (NPCI), is at the forefront of digital payments and collections, driving financial inclusion and enhancing customer convenience. NBBL offers a unified, interoperable, and accessible ecosystem for bill payments and collections, enabling secure and reliable “Anytime, Anywhere” transactions for individuals and businesses.

Through its Bharat Connect (BBPS) platform, NBBL caters to individual users with seamless bill payment solutions across diverse categories. For B2B, it provides ERP interoperability, streamlined collections, invoice management, reconciliation, and access to structured financing options. It is also designated settlement agency for the Open Network for Digital Commerce (ONDC), ensuring safe, secure, and reliable settlements on the platform.