Definition
UPI Mandate
A UPI mandate is a standing instruction created on a UPI app that pre-authorises a merchant to collect a one-time future or recurring payment up to a set limit.
A UPI mandate can be one-time (block funds now, debit later, common in IPO applications via UPI) or recurring (the basis of UPI AutoPay). When you approve a mandate, the agreed amount may be earmarked or blocked in your account until the merchant executes the debit.
In an IPO application, for instance, the bid amount is blocked through a UPI mandate and only debited on allotment, otherwise released. For subscriptions, a recurring mandate authorises periodic debits within the cap you set.
Mandates are governed by NPCI rules and can be tracked, paused or revoked in your UPI app, giving control over money that is committed but not yet spent.
Related terms
- ASBAASBA (Application Supported by Blocked Amount) is the mechanism where IPO application money stays blocked in the investor's bank account until shares are allotted.
- UPI AutoPayUPI AutoPay is an NPCI feature that lets you set up recurring payment mandates on a UPI app so approved sums are auto-debited for subscriptions, SIPs, bills and EMIs.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.