Fintech for every merchant
With 25.5 billion real-time payment transactions in 2020, India outpaced every other country, according to a report by ACI Worldwide. It was followed by China (15.7 billion) and South Korea (6 billion), with the United States at ninth place with only 1.2 billion transactions. Growing customer acceptance of digital payment technologies, merchant education and acceptance, along with statebacked schemes, played a crucial role in our dominance.
What began over a decade ago with the Immediate Payment Service (IMPS) has evolved into a much easier solution with Unified Payments Interface (UPI) and digital cards. These verticals and technologies have advanced sufficiently to provide merchants with real-time convenience of accepting payments, while consumers have the option to make payments through mobile phones.
Today, merchants have a variety of payment system options, where they don’t have to worry about the backend procedures which are handled by fintech firms. The following are some examples of virtual technologies used by merchants to digitise payments and make their lives easier:
Mobile wallets: They speed up payment processing while also allowing for cash-backs and other rewards
Cards: Debit and credit cards have become a larger element of payment systems. Merchants now have the option of using them for payment, credit access, and convenience when making vendor-purchases and for working capital payments, while getting cash-backs.
UPI: Allows users to conduct realtime transactions through direct-bank transfers. In India, merchants frequently employ QR codes to allow customers to scan them and merchants to accept money without providing any bank information, with only a few clicks on their phones
Point-of-sale (POS) terminals: Not only can customers use POS terminals to swipe their cards, but units featuring QR codes and contactless payment have recently become popular. Even though they have existed for a while, retailers are adopting them to rapidly take payments by whatever method that the customer may prefer
Buy-now, pay-later: Merchants use it to replace bank overdrafts to buy items from vendors and even better manage their working capital, while consumers can use it to buy the things they desire right now, regardless of how much money they have in their bank account
Soundbox: Audio payment confirmation reduces the merchant’s dependence on monitoring the phone for confirmation, or even preventing lost payments
Insurance: Merchants can get insurance for their items from fintechs at a lower cost, all from the convenience of their phones
Virtual bahikhatas: I recall my father maintaining his books of accounts with enormous red-coloured registers, but some fintech startups have now made accounting simple, with Gst-invoices to vendor accounts, all happening at the ease of their laptops.
Fintech firms today have created an ecosystem of trust and supportiveness for merchants, not just by helping them with creative solutions, but also by assisting them with innovative products.
The National Bank for Agriculture and Rural Development (Nabard) announced the opening of savings accounts under the Jan Dhan plan in 2016, allowing farmers to use their Rupay cards to purchase seeds, fertilisers, and other farming equipment. Nabard announced the deployment of 200,000 POS devices in 100,000 villages, for which it has set aside ~120 crore, in addition to a ~6,000 incentive for commercial banks to purchase POS units. Players like us are also rewarded for digitising payments for street vendors in tier-2 cities and beyond.
We have seen innovation flourish at an unprecedented rate, resulting in faster uptake and acceptance of fintech solutions when paired with government initiatives. While recent developments like our boombox will continue to flourish, merchants will see the next wave of growth and innovation in the shape of credit on UPI, which combines the benefits of credit cards with the convenience of UPI.