Block Now, Pay Later
Think about the last time you paid for something before you knew whether you would actually get it.
You pay for an insurance policy before it is approved. For a hotel booking weeks before you check in. For a service before the service is offered.
The payment goes through in seconds. That part works.
It’s what happens next that creates the problem. The outcome is still pending, the money has already left your account, and if the answer turns out to be no, you wait for a refund on someone else’s timeline.
So the customer has taken on all the risk of a decision that hasn’t been made yet. And the business is now holding money it may have to send back, along with the support tickets that come with it.
That is the gap Lien Marking closes.
What is Lien Marking?
Lien Marking allows a customer to block an amount in their bank account without actually debiting it.
The money stays in the customer’s account. It is simply set aside for a specific transaction. Once the action is confirmed, the amount is debited. If it isn’t, the block is released and the money is free again.
No debit. No refund cycle. No waiting.
This concept isn’t new. Customers can already block amounts on UPI through a one-time mandate, and on Cards through pre-authorisation.
But it was not possible on Netbanking.
Cashfree brings Lien Marking to Netbanking
Cashfree has launched Lien Marking on Banking Connect, which lets a customer block an amount in their bank account for a transaction without the money leaving the account.
Cashfree has launched this payment mode with ICICI Prudential.
Banking Connect: the rail behind Lien Marking
Instead of money flowing out of the customer’s account upfront, the amount is lien-marked directly with their bank for up to a maximum of 14 days.
That window is the point. It is long enough to cover the kind of decision that takes a few days to make.
And because this runs on Banking Connect, it works for the customers who choose Netbanking over UPI or Cards, which is a meaningful share of high-value payments in India.
One of the Biggest Use Cases of Lien Marking is Insurance
A customer applying for a term or health policy traditionally pays the full premium upfront, even before the insurer has completed underwriting.
The insurer then reviews medical reports, health history, age, lifestyle and other documents before deciding whether to accept the proposal.
This can take a few days.
If the proposal is declined, the customer gets their money back through a refund.
Which raises an obvious question:
“Why did the insurer take my money before deciding to cover me?”.
IRDAI recommends the premium to be blocked in the customer’s bank account and debited only once the proposal is accepted.
For insurers, that means customers who prefer Netbanking, particularly for larger premium payments, can get the same experience that is available on UPI and Cards.
And for customers, it means the premium stays in their account until the policy is approved.
But Insurance Is Just the Beginning
The same mechanic can unlock better payment experiences across several industries:
Investments: Customers can block funds while applying for an IPO. The amount is debited only when shares are allotted.
E-commerce: Customers can block an amount when placing an order, with the payment debited only when the order is confirmed or fulfilled.
Hotels and Reservations: Customers can reserve a room by blocking a specified amount, with the payment debited at check-in.
And these are just a few of the possibilities. Any journey where money needs to be reserved before the final outcome is known can benefit from lien marking.
For the millions of customers who rely on Netbanking for their payments, Lien Marking on Banking Connect brings a more flexible, customer-first way to pay.
If you are looking to enable lien marking across Netbanking journeys, talk to our team.
