We are finally living in the digital age, where education, banking, healthcare, shopping, and even meeting people is happening virtually. Covid times made sure that we did not step out of the home, yet all the needed services were available right at our doorstep. Unified Payments Interfaces (UPI) apps and Payment Gateways made sure that our transactions were safe and secure, plus cashback offers that have flooded the market ensured that people understood the advantages of epayments, as more than just a way to receive salary, but to make payments too. It has influenced major realms of human life from the largest to the smallest of financial transactions delivering convenience. The epayment technology has made our payment process fast, smooth and fraud resistant. Here are a few more reasons why they are growing every year.
Every corner shop owner today will point to the QR codes of more than one company when asked if he accepts online payment. He is running short of time as he needs to deliver quick snacks to satiate the hunger of the customers. There is no time to waste in collecting payments and giving back the change, because honestly who has the time? Smart work leads to increased revenues at top speed.
Large corporates receive thousands or sometimes even millions of payments each month. It would be maddening to try and keep an account. They struggle to match the payment received with the invoice they generated. Part-payment against invoice complicates this even further. Today banks and fintech enable direct interface with the corporates. They deliver additional information along with the payments message such as the PO number and invoice number. The corporate ERP can use this information to automatically match the payment against the corresponding invoice and reconcile instantly.
Predictability of inflows influences the cash flow position of a corporate significantly. Cheque and cash-based payments or payer-initiated payments result in uncertainty of receivables. Recurring auto-debit payments almost eliminate this uncertainty. When the payer authenticates a recurring auto-debit payment, the receiver can instruct the bank to collect the fund automatically on the due date. In India ACH and UPI have greatly simplified processes to achieve recurring auto-debit. Businesses can now plan their cash flows with a lot more confidence.
All credit facilities to business involve analysis of the track record of the business. Small businesses dealt predominantly in cash until recently. The lenders had no means of analyzing the quantum of business and hence the ability of the business to repay the credit. Today, thanks to UPI and instant payment facilities, most of the transactions of all small business happens entirely through electronic payment. So the bank statement of the small business gives a pretty accurate picture of the business. Lenders can finally lend to small and micro-businesses with a great degree of confidence.
EMI payments for high-value consumables are nothing new. However, in recent times, thanks to COVID, consumers prefer to retain cash for a longer period. This has lead to a new business models such as Buy Now Pay Later, whereby the customer gets a fixed credit facility upfront to shop in a specific shop or a chain. The BNPL facility is made possible by the advanced payments infrastructure available today. BNPL offers customer retention capability to the business.
Fintech companies today offer end-to-end business finance solutions covering accounting packages, day-to-day banking facilities, automated supplier payments, bulk payments (such as salary pay-outs), a corporate card with the ability to manage, segregate and pay for cards transactions, salary account services, and credit facilities. Corporates can now find a single operator for all their financial management needs. This gives a quick start to start-ups and young companies. Large organizations can work with such fintech to tailor their requirements as well. The payment gateway apps have infiltrated the lives of the common man. They receive as well as make payments through them. Whether there is a street vendor or a first- time entrepreneur or an old business needing revamp or a multi- national company, there is a customised solution for everybody. Fintech is the real hero here, and here to stay for a long time, making lives easier, every day.
The blog has been authored by Balaji Jagannathan, Co-Founder and Director, Paycorp.io. Bfsinxt.com Bfsinxt.com does not necessarily endorse it and will not be held liable for any direct or indirect damage made to any individual or organisation.