The Reserve Bank of India (RBI) on December 7 enhanced the capabilities of the Unified Payments Interface (UPI) by introducing a ‘single block and multiple debits’ functionality.
Single block and multiple debits
- The new initiative allows a customer to enable a payment mandate against a merchant by blocking funds for specific purposes in his/her bank account which can be debited, whenever needed.
- A major difference between the mechanism is that at present, there is only single debit transactions functionality for a single block in the UPI. In other words, customers can only block one debit transaction in their accounts for their choice of payment.
- But with the new single block and multiple debits feature, customers can block multiple transactions on their account for specific transactions which will in turn make automated payments easier and quicker.
- The single-block-and multiple debits feature is expected to have multiple use cases in various segments, such as ecommerce transactions, investment in the secondary market and purchase of government securities using the RBI’s Retail Direct scheme.
- The RBI will issue instructions to the National Payments Corporation of India (NPCI), which runs and manages UPI, on this functionality shortly.
- This new functionality will play a key role in building the framework for blocking money for secondary market trades, a mechanism called Application Supported by Blocked Amount (ASBA), which the capital market regulator is planning to implement.
- With the single-block-and multiple debits capability, a customer will be able to block an amount for a specific merchant, who can keep debiting from the same blocked amount until it gets exhausted.
New services under Bharat Bill Payment System (BBPS)
- The Bharat Bill Payment System (BBPS) will now include a wider variety of recurring and non-recurring payments.
- Currently, BBPS only allows recurring bill payments to merchants. This restricts its usage for both customers making digital payments as well as billers as individual collectors cannot accept payments.
UPI transactions witnessed a 650% rise
- Touching new heights, UPI transactions witnessed a 650% rise at semi-urban and rural stores in the country this year, according to a report by branchless banking and digital network ‘PayNearby’.
- The latest development happened in October this year when the National Payments Corporation of India International Payments Ltd (NIPL) got into a partnership with European payments facilitator ‘Worldline’ to enable payments through UPI.
- Under this partnership, Worldline’s QR code-based system will allow merchants’ Point-of-Sale (PoS) systems in Europe to accept UPI payments from Indians using their mobile phones.
- Later, Indians will also be able to make payments in Europe using RuPay debit and credit cards. Earlier, NIPL had signed an agreement with Singapore-based Liquid Group to enable UPI QR-based payments in 10 countries (spread across North and Southeast Asia).
- Liquid Group integrates an extensive network of merchant acquiring partners in the 10 markets of Singapore, Malaysia, Thailand, Philippines, Vietnam, Cambodia, Hong Kong, Taiwan, South Korea, and Japan.
