The Reserve Bank of India (RBI) has said UPI customers can create a payment mandate against a merchant by blocking funds in a bank account for specific purposes, and the funds can be debited whenever needed.
“It has been decided to introduce a single-block-and-multiple debit functionality in UPI, which will significantly enhance the ease of making payments in e-commerce space and toward investments in securities,” the central bank said.
The RBI said such an option will be helpful for hotel bookings, purchase of securities in the secondary capital markets, purchase of government securities using the RBI’s Retail Direct scheme, and for e-commerce transactions.
“This new functionality of ‘single-block-and-multiple debits’, will enhance the ease of making payments in the e-commerce space,” said Mandar Agashe, founder, Sarvatra Technologies. “The merchants will get assured timely payments, while the customers can pay by blocking the amount in their account, meaning there is a commitment to pay but the actual amount will be transferred when the actual goods are delivered. We may see many customers who would prefer cash on delivery, use UPI mandates for payments, in the coming months.”
Vishwas Patel, executive director of
, said that the firm’s experience suggests UPI-based payment mandate will translate many cash or UPI users toward advance booking systems and payment mandates as doing so gives them control over their payment decisions.
The RBI has also expanded the scope of Bharat Bill Payment System (BBPS) to include all categories of payments and collections, both recurring and non-recurring.This will make the platform accessible to a wider set of individuals and businesses who can benefit from the transparent and uniform payments experience, faster access to funds and improved efficiency, the RBI said.
“The platform has now become accessible to a wider set of individuals and businesses who can now benefit with faster fund access and improved efficiency,” said Avinash Godkhindi, MD, Zaggle.
