An integrated circuit packaging system and method of manufacture thereof including: an integrated circuit die having a contact pad; a redistribution layer on the contact pad, the redistribution layer having a chip contact, a trace, and a bump pad, the redistribution layer having a curved top surface and sidewalls which are planar; an upper passivation layer on the sidewalls of the redistribution layer with the area above the bump pad of the redistribution layer exposed from the upper passivation layer; and an external interconnect attached over the bump pad.