Online transactions often involve a delicate balance of trust. Customers want assurance about the quality of products or services before making a payment, while merchants seek protection against no-shows and unfulfilled bookings. This tension can lead to transaction bottlenecks and lost opportunities. We’re thrilled to announce a solution that addresses this very challenge: One-Time Mandates (OTM) on UPI.
The Trust Deficit:
Consider a scenario: John wants to book a hotel room for a future date. He’s hesitant to pay upfront, unsure if the room will meet his expectations. The hotel owner, on the other hand, needs a firm commitment to hold the room. Traditional payment methods fall short in addressing this dilemma. Credit card pre-authorizations may not be an option for you if you only use UPI, and waiting until check-in leaves the hotel vulnerable. This kind of trust deficit can stall transactions and create frustration for both parties.
Introducing One-Time Mandates: A Bridge of Trust
One-Time Mandates on UPI provide a simple yet powerful way to bridge this trust gap. Here’s how it works:
- Mandate Creation: The merchant (e.g., the hotel owner) creates a mandate request for the agreed-upon amount.
- Customer Approval: John approves the mandate, which blocks the funds in his account but doesn’t debit them yet. This provides the hotel with a guarantee of payment.
- Mandate Execution: Once John checks in and is satisfied with the room, the hotel executes the mandate, and the payment is processed instantly.
- Mandate Revocation: If, for any reason, John is unhappy with the room, he can request the hotel to revoke the mandate, instantly releasing the blocked funds back into his account.
Benefits for Everyone:
- For Customers: OTMs provide peace of mind, knowing that they only pay when they’re satisfied with the product or service.
- For Merchants: OTMs offer a secure way to guarantee future payments, reducing the risk of cancellations and no-shows.
- Flexibility and Control: OTMs offer a flexible payment solution that can be tailored to various use cases.
Going Live with Pulse EV: Revolutionizing EV Charging
We’re incredibly excited to announce that Pulse EV, a leading electric vehicle charging network, is our pilot merchant for One-Time Mandates on UPI. They’re using this technology to solve a unique challenge in the EV charging space.
Unlike filling a petrol tank, EV charging isn’t always a precise transaction. Charging times can vary due to fluctuations in power supply, and customers might be hesitant to pre-pay for an estimated amount. With OTMs, Pulse EV customers only get charged for the exact amount of charging completed. This eliminates customer hesitation and reduces support tickets related to payment disputes.
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The Future of Trust in Transactions:
One-Time Mandates on UPI represent a paradigm shift in how we approach online transactions. By fostering trust and transparency, OTMs unlock new possibilities for both merchants and customers. At Razorpay, we’re committed to building innovative solutions that empower businesses and enhance the online experience for everyone. Stay tuned for more updates as we continue to expand the reach and capabilities of One-Time Mandates on UPI.
