RBI tweak to UPI will help in e-com, share purchases: Das

• The RBI recently said it would add a feature in the UPI platform to aid payments where delivery of goods and services happens later.
• Will significantly enhance the ease of making payments in e-commerce space and towards investments in securities.

Importance/Benefits

• A customer could create a payment mandate against a merchant by blocking funds in his/her bank account.
• Can be debited when needed.
• Will build greater trust in transactions as merchants will be assured of timely payments, while funds remain in the customer’s account till actual delivery.

Current scenario

• The BBPS currently does not allow non-recurring payments, or collections even if they are recurring in nature.
• So, professional service fees, education fees, tax payments, rent collections fall outside the ambit of the platform.

Prelims Takeaway

• BBPS
• UPI