UPI is evolving rapidly to enable new payment experiences. One such feature is the UPI One-Time Mandate (OTM), which allows merchants to block a certain amount in the customer’s bank account for up to 60 days. The funds are not debited immediately but remain blocked until the merchant chooses to capture them. If no capture is made, the funds are automatically released back to the customer’s account at expiry.
This ensures guaranteed availability of funds for merchants while offering customers a secure and transparent payment experience.
Use Cases:
- Hospitality – Hotels can block charges at booking and capture the final payable amount at check-out.
- Travel – Car rental platforms can block a deposit and later capture based on usage or damages.
- Insurance – Insurers can block the premium when a policy is applied and debit only after issuance (as per IRDAI guidelines).
- Ecommerce – Merchants can block payment at order placement and capture only on delivery or partial shipments.
Types of UPI OTM
UPI One-Time Mandate (OTM) is available in two forms – Single Block Single Debit and Single Block Multi Debit. Both allow merchants to block a certain amount in the customer’s bank account, but they differ in how funds can be utilized.
In the Single Block Single Debit model, a specific amount is blocked in the customer’s account and can be debited only once. The debit may be full or partial, but once captured, the remaining balance (if any) is automatically released to the customer. This model is best suited for straightforward, one-time payments such as hotel bookings, policy issuance in insurance, or product deliveries in ecommerce.
On the other hand, the Single Block Multi Debit model offers more flexibility. Here, the customer’s account is blocked once, but multiple debits can be made against the blocked amount until it is exhausted or the mandate expires. This is particularly useful in cases where charges are incurred in stages or vary over time—such as travel rentals, ecommerce with multiple fulfillment events, or try-and-buy product models. The customer authorizes the mandate once, and merchants can initiate multiple debits without requiring repeated approvals, making it efficient and user-friendly.
Comparison of OTM Types
| Feature | Single Block Single Debit | Single Block Multi Debit |
|---|---|---|
| Number of Debits | One debit only (full or partial) | Multiple debits allowed until limit is reached |
| Best For | One-time payments (hotel booking, insurance premium, ecommerce orders) | Staged or variable payments (car rentals, try & buy, multiple shipments) |
| Fund Blocking | Blocked once for up to 60 days | Blocked once for up to 60 days |
| Flexibility | Less flexible, suitable for fixed payments | Highly flexible, suitable for dynamic/variable charges |
| Customer Experience | Simple and straightforward | Convenient for multiple charges without repeated approvals |