Powering National Pension Scheme contributions with BBPS – From PRAN pains to easy gains

As someone working in fintech, I have seen how rapidly India’s financial landscape has evolved. Many parts of our lives have quickly gone digital. Yet, amidst this transformation, the National Pension Scheme (NPS) remained frustratingly outdated—until the integration with BBPS changed everything.

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Since 2018, we have seen:

• 4G internet becoming ubiquitous

• Passwords evolving into biometric authentication

• Cash payments giving way to UPI

But NPS? It stubbornly clung to its old ways. The frustration of managing my NPS contributions was all too real.

The National Pension Scheme directly impact 63,543,628 subscribers.

Picture this: You are trying to be responsible. Planning for the future. NPS seems like a good idea. But wait, where is that PRAN number? It is scribbled in some piece of paper buried in a heap. Found it! Now, login. App crashes. Try again only to navigate a maze of screens. Finally! Ready to invest. But hold on. Gateway charges? Seriously? More often than not, I would throw my hands up in defeat and speed-dial my CA, feeling like I needed a degree in finance just to save for retirement. Why is saving for retirement so complicated? The process is exhausting. So I think to myself maybe I will do it tomorrow. Or next month. Or never.

At one point, NPS introduced a Virtual Account Number option. I eagerly added it to my net banking, hoping for a smoother experience. Yet, like many well-intended features, it soon faded from memory, lost in the digital clutter of modern banking.

Taking control of defining what could be possible#

My work at Setu makes me realise the immense potential of the Bharat Bill Payment System, now Bharat Connect. As Setu, we collaborated with the three Central Recordkeeping Agencies, NPS team, and Axis Bank to integrate NPS into the BBPS network. A future where pension contributions are as simple as paying a utility bill was no longer a distant dream. It was something we could build.

We were already doing some stellar work on the Bharat Connect platform. The number spoke volumes:

• Setu facilitated 3.5 crore transactions over BBPS in August 2024, amounting to Rs 15,265 crores.

• Transaction volumes powered by Setu are growing rapidly at 15% MoM,

• Transaction volumes on BBPS itself grew by over 50% between April to August 2024

These figures are more than just mere statistics for us; they represent millions of Indians embracing a more convenient way to manage their finances.

NPS 🫶 Bharat Connect#

The team and I were closely working with central bodies to bring NPS to Bharat Connect. The announcement finally came from NPCI at the 2024 Global Fintech Festival that NPS contributions could now be made through BBPS. It was a paradigm shift.

For me, this meant:

• No more fumbling for my PRAN number

• A streamlined process requiring just my mobile number, date of birth, investment type, and contribution amount

• Securing my pension investments in 20 seconds or less, and most importantly

• Bidding farewell to those pesky additional payment gateway charges

This transformation is truly groundbreaking. The ability to automate NPS contributions, making them as effortless and routine as a SIP, is an order of magnitude jump in convenience. It fundamentally reshapes our approach to retirement planning. I can already see a future where BBPS-enabled platforms become the preferred choice for NPS investments, empowering millions of Indians to secure their financial futures with unprecedented ease and simplicity.

Let me tell you why I am particularly bullish about it:

• If just 10% of India’s workforce — estimated at 50 crores — contributes an additional ₹1,000 monthly to NPS through this simplified system, we could see an extra ₹600 crores flowing into pension funds annually.

• This influx could significantly boost retirement security for millions, significantly reducing the burden on social welfare systems and stimulating long-term economic growth.

As the adoption of NPS-BBPS integration grows, the financial future of our nation strengthens. Retirement planning is now as seamless as daily UPI transactions.

Future looks bright, doesn’t it?