The Reserve Bank of India RBI on Wednesday said it would introduce additional features to the existing Unified Payments Interface UPI platforms that would allow multiple debits. The central bank will roll out single-block and multiple debit functions that will allow users to block funds in their accounts.
This would improve the process of payment for online transactions and investments in securities.
Users can make recurring payments through the UPI AutoPay feature. A single debit can only be used by merchants to receive payment. Multiple merchants can make multiple debit transactions within a permitted limit, thanks to the added feature.
RBI Governor Shaktikanta Das, who started his speech on the UPI with praise for the digital payment system, said that the new feature will be helpful in the purchase of government securities using RBI's retail direct scheme.
He stated that separate instructions will be sent to the National Payments Corporation of India NPCI to implement the enhancement.
The governor said that the scope of the Bharat Bill Pay System BBPS will be expanded to include non-recurring bills and other types of single payments. In 2017 the BBPS was launched and is a platform for the payment of all bills.
BBPS does not have a facility to process non-recurring payments or collection requirements of individuals, even if they are recurring in nature.
With the additions, the BBPS will include all categories of payments and collections, both recurring and non-recurring in nature, and for all categories of billers, both businesses and individuals.
The new system will make the BBPS platform more 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, according to Das at the Monetary Policy Committee MPC meeting on Wednesday.
The addition means that users can make easy professional service fee payments, education fees, tax payments, and rent collections.
The integration of Single-Block and Multiple Debits SBMD within the UPI framework is the most important aspect of today's announcement. It allows users and merchants to decide on a certain limit to which a credit card can be authorised, making it convenient for customers and giving confidence to merchants. Now that UPI is capable of similar services, it is poised to increase its reach and make it the most popular mode of payment in the near future, in line with RBI's vision. This puts the UPI on par with a traditional credit card. Krishnan Vishwanathan, Founder and Executive Director of RING, said the development is very positive and gives digital platforms like ours an opportunity to offer additional benefits through UPI integration.
RBI plans to introduce multiple-block and multi-point debit in UPI will make the process of payments easier and more efficient. Customers can now make a payment mandate against a merchant by blocking money in their bank accounts, which can be debited at any time. Customers are able to make recurring payments for SIPs, OTT subscriptions, etc. Through the UPI Autoplay facility, you can find all of the necessary information about it. RBI has the vision to expand this feature to e-commerce platforms. This new aspect will make it easy for customers to invest in securities, book hotels, online shopping, etc. The merchants will receive a lot of assurance of timely payments while the customer still holds his funds in his account until the actual delivery, said CA Manish P. Hingar, founder at Fintoo.