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RBI on Wednesday decided to introduce the functionality of a single-block-and-multiple debit in UPI. Read this to understand how it will work
The Reserve Bank of India (RBI) has recently said that retail payments system Unified Payment Interface (UPI) will soon have a new functionality — single-block-and-multiple-debits. This feature will aid payments where delivery of goods and services will happen later, like e-commerce purchases, hotel bookings or investments in securities.
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How will it work?
Customers will be able to block funds in his/her account for specific purposes, which can be debited whenever needed. As per the current scenario, customers make recurring payments for SIPs, OTT subscriptions, etc., through the UPI Autopay facility.
Now, RBI has the vision to expand this feature towards e-commerce platforms.
Who will benefit?
According to RBI, the development will be helpful for hotel bookings, the purchase of securities in the secondary capital market as also purchase of government securities using the RBI’s Retail Direct scheme, e-commerce transactions, etc.
"Additionally, merchants will receive significant assurance of timely payments while the customer still holds his/her fund in his account until the actual delivery. This will create an ease in the commerce space for making payments in a regularized manner," said CA Manish P. Hingar, Founder at Fintoo.
As per RBI, separate instruction will be issued to the National Payments Corporation of India (NPCI) to implement the enhancement.
Mandar Agashe, Founder, MD, & Vice Chairman at Sarvatra Technologies ltd welcomed the move and said that the new feature will enhance the ease of making payments in the e-commerce space.
"UPI has already witnessed tremendous adoption over the last few years. The new feature is a ‘win-win situation’ for both merchants and the customers. The merchants will get assured timely payments, while the customers can pay by blocking the amount in their account, i.e. there is a commitment to pay but the actual amount will be transferred when the actual goods are delivered. In fact, we may see many customers who would prefer cash on delivery, use UPI mandates for payments, in the coming months," he said.
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First Published: Dec 8, 2022 5:51 PM IST