Not only payments through UPI (Unified Payments Interface), even cash-on-delivery options were not available on all the products available so far on popular e-commerce platforms – like Amazon, Flipkart etc – as vendors were not sure if a buyer would pay for a product or return it on some pretext.
However, things would now become easy for e-commerce platforms and online shoppers with the introduction of the single block multiple debit (SBMD) facility on UPI transactions. As an agreed amount will be blocked for a specified use when a customer exercises the SBMD option, using this facility will remove the uncertainty of receiving payments on delivery, UPI users would get the option to pay on delivery for all the products online.
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“The RBI Governor’s announcement on December 7, 2022, which allows a single block consent from a UPI customer and multiple debits up to a maximum permitted amount as opposed to the hitherto single payment rule, is a positive move. This will further enhance the UPI platform’s capabilities and usage. This feature will be useful in share trading and e-commerce transactions and further solidify customer trust and confidence while transacting online,” said Mehul Mistry, Global Head – Strategy, Digital Financial Services & Partnership, Wibmo.
Not only online purchases, the SBMD feature will also facilitate investments in securities and the UPI users would also use it like even a credit card.
“This facility will enable a customer to block funds in his/her account for specific purposes, which can be debited whenever needed. This will enhance the ease of making payments for investments in securities through the Retail Direct platform as well as e-commerce transactions,” said Mistry.
“In addition to this, retail investors/customers will earn a savings interest rate till the time money is debited from their bank account,” he added.
As the SBMD facility will ensure that an agreed amount will be debited as and when a transaction takes place, it will benefit the UPI users, while certain intermediaries will take a hit.
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“For the Non-bank-based e-Broking Industry with this new feature, the operational efforts to recon and manage customers’ funds with regards to UPI mandates will reduce further. However, the disadvantage would be that non-bank-based Brokers generate interest income from unused funds until it is sent back once in 30-90 days. So, there will be a revenue hit,” said Mistry.
