RBI is adding a new feature in UPI platform: What is it, and how will it help consumers and merchants – Times of India

The Reserve Bank of India (RBI) has said that it will introduce a new feature for UPI platforms to enable easier and more secure UPI payments. Called ‘single block, multiple debits’, the feature will be handy in situations where the delivery of goods and services happens after making the payment.
“It has…been decided to introduce a single block and multiple- debits functionality in UPI, which will significantly enhance the ease of making payments in e-commerce space and towards investments in securities,” news agency PTI quoted RBI Governor Shaktikanta Das was quoted as saying after he announced the bi-monthly policy review.
What is a single block, multiple debits
The single block, multiple debits is a feature wherein customers will be able to create a payment mandate against a merchant by blocking funds in their bank accounts for specific purposes, such as shopping from e-commerce websites or making reservations at hotels or investments in securities.
These funds will remain with consumers and will be debited once the product or service has been delivered.

How it will help consumers and merchants
Sometimes it happens that a consumer has made the payment and the product he/ she purchased from an e-commerce website is not delivered. On the contrary, sometimes merchants have to face similar issues when the product is delivered and UPI payment gets stuck.
In such cases, the money is debited from the consumer’s account and they often hesitate or deny making another transaction in fear of paying more for the same product in case the first payment gets through. There is also a possibility that the second payment also gets stuck.
This feature will provide a sense of trust to consumers by assuring them that the payment made against a good or service will only be materialised once they receive the good and service. Additionally, it will also offer surety to merchants they will get paid once they deliver the goods or services.

“Such a facility will build higher degree of trust in transactions as merchants will be assured of timely payments, while the funds remain in the customer’s account till actual delivery of goods or services,” the governor noted, adding that the feature will also be helpful in purchase of government securities using the RBI’s retail direct scheme.
National Payments Corporation of India (NPCI) – which facilitates services like UPI Payment, Bharat Bill Pay, RuPay Card and FASTag – will also be issued separate instructions to implement the feature.