UPI – Dutch Uncles https://dutchuncles.in Market Intelligence & Mentoring Resources for Startups and Small businesses | Dutch Uncles Fri, 01 Apr 2022 12:32:01 +0000 en-US hourly 1 https://dutchuncles.in/wp-content/uploads/2020/12/favicon.png UPI – Dutch Uncles https://dutchuncles.in 32 32 How Mattress Brands should Market Themselves? https://dutchuncles.in/build/how-mattress-brands-should-market-themselves/ https://dutchuncles.in/build/how-mattress-brands-should-market-themselves/#respond Fri, 01 Apr 2022 12:32:02 +0000 https://dutchuncles.in/?p=39956&preview=true&preview_id=39956 Rewinding the time machine to the early and mid-2000s Kurl-On, India’s then sole player in the mattress industry made a commercial that threw a question about having a good night’s sleep to its audience. The commercial portrayed individuals belonging to all age groups yawning at the odd hours of the day. Cut, to 2022 today’s […]

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Rewinding the time machine to the early and mid-2000s Kurl-On, India’s then sole player in the mattress industry made a commercial that threw a question about having a good night’s sleep to its audience. The commercial portrayed individuals belonging to all age groups yawning at the odd hours of the day.

Cut, to 2022 today’s mattress is more than about a good night’s sleep and yawning during the daytime. The mattress industry largely dominated by the unorganised players, which use cotton material as a filler is witnessing the entry of organised players and is poised to grow at a CAGR of 10 percent to become a market worth $2.5 billion as per a Redseer report. As disposable incomes rise, and people become more considerate about health they are focussing more on the comfort and functionality of the product.

Pandemic has led to sleeping disorders

With the corporate rat race becoming fierce, the sleep cycle of Indians already went disturbed which further aggravated the outbreak of the virus. The anxieties surrounding health, finances, a slump in business, and reduced incomes topped with abrupt lifestyle changes like going to bed late brought irregularities in people’s sleeping patterns. Many complained of having insomnia, sleeping hours getting reduced, and difficulty in falling asleep. The mattress brands in line with the changing times should include innovative marketing strategies to gain traction. Mattresses are no longer considered consumer durables but they indicate the quality of life. Here is how they can do it.

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The mattress industry largely dominated by the unorganised players, which use cotton material as a filler is witnessing the entry of organised players and is poised to grow at a CAGR of 10 percent to become a market worth $2.5 billion as per a Redseer report.

Marketing strategies for mattress brands

  • An easy buying experience: Purchasing a mattress online will not be welcomed by Indian consumers, since buying one requires a measurement of the bed that is to be matched with the mattress size. But, mattress company Casper solved this hassle by easing the process of buying a mattress online without worrying about the quality and measurements. It developed several unboxing videos and made easy guides, manuals, and graphics that helped buyers easily place orders on the website. An easy buying experience becomes the topic of positive word of mouth for the customers. It also offered a 100-night free return policy — no questions asked.

  • Sell comfort and sound sleep: Few people are aware or unconcerned that insufficient sleep deteriorates health. Most people are unaware of the number of hours required for a sound sleep. Therefore, the marketing campaign should contain educative content that strikes the correct pain points of their consumers by educating people about a night of sound sleep. It should look like your business has the solution to the problem of sleep. 

  • Expanding the product line: For a mattress brand, the lifetime customer value is low since the mattress is a product that people will buy once in several years. There are no repeat and multiple orders from the same customer. To increase the order value, the company must develop products other than mattresses that will help sleep better. Products such as flight cushion pillows, aroma candles for sleep, sleep oils, and sleep yoga should be added to the product range directing people to people to sleep better. 

  • Social media: Mattress brands can effectively leverage the social media user base to promote their offerings by engaging the audience in a two- way communication through quizzes, contests, and memes. Advertising on social media platforms will widen its reach as the outbreak of the pandemic has increased the screen time of Indians on social media. 

B2B Market- a territory untapped for mattress brands

Apart from going B2C, the new age mattress brands should consider targeting the B2B customers as the demand for construction in both residential and institutions is on a steep growth curve in India. It should target more hotels, strike deals with builders, educational institute hostels, dormitories, etc.

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]]> https://dutchuncles.in/build/how-mattress-brands-should-market-themselves/feed/ 0 UPI 123 Pay : Democratising Retail Payments for Small Merchants https://dutchuncles.in/build/upi-123-pay-democratising-retail-payments-for-small-merchantsayments-for-small-merchants/ https://dutchuncles.in/build/upi-123-pay-democratising-retail-payments-for-small-merchantsayments-for-small-merchants/#respond Thu, 31 Mar 2022 12:39:28 +0000 https://dutchuncles.in/?p=39942&preview=true&preview_id=39942 For financial inclusion of the feature phone users in India, RBI has recently launched UPI for the non-smartphone users in India to further deepen and democratise the digital payment network, especially in rural areas. Although India is on the cusp of the smartphone revolution but has a sizeable number of people who use feature phones. […]

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For financial inclusion of the feature phone users in India, RBI has recently launched UPI for the non-smartphone users in India to further deepen and democratise the digital payment network, especially in rural areas. Although India is on the cusp of the smartphone revolution but has a sizeable number of people who use feature phones. According to Statista’s reports, out of a total of 118 crore mobile users in India, around 44 crore people yet use feature phones and 74 crores have a smartphone with them in the country. The UPI 123 Pay will enable users of the lower economic strata of our society to effectively use digital payment who cannot afford smartphones to access UPI.

People from rural India are aware of UPI payments but want to stick to feature phones, also if they own a smartphone as a second device they do not want to keep it solely for making digital payments. 

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According to Statista’s reports, out of a total of 118 crore mobile users in India, around 44 crore people yet use feature phones and 74 crores have a smartphone with them in the country.

How does UPI 123 Pay work? 

UPI 123 Pay differs from standard UPI which allows users to integrate their feature phones with bank accounts to pay digitally without internet connectivity. This payment system does not require any QR scan code to pay. 

Digital payments through UPI 123 Pay is a three-step process of the call, choose and pay. Through its voice-based system or IVR, users need to call 080 4516 3666 a number provided by NPCI, select their preferred language, tap the ‘1’ key on the phone to transfer money, confirm the bank name through voice-based command, again tap the ‘1’ key to transfer the amount, enter recipient’s mobile number and the amount followed by the UPI PIN to authorise the transfer. The UPI PIN can be set up on the call through debit card details before transferring the amount. 

There are three more ways to transfer payment: 

  • The second mode of payment is through an app-based channel where app functionality is offered in a feature phone.

  • The third mode of payment is through sound proximity where the technology is based on sound waves to enable contact and networking to make contactless payments.

  • The fourth mode of payment can happen through a missed call where users can send a missed call and will get back a call to authenticate by inputting a UPI pin and carrying out the payments.

The central bank has also launched a 24*7 helpline for digital payments – DigiSaathi

How will UPI 123 Pay benefit small businesses? 

For small merchants in India, the launch of UPI 123 Pay is poised to become a gamechanger, since the payment settlement time through cheques takes up to 48 hours, and if there are bank holidays, festival holidays, or weekends the settlement period might extend up to 6 days. Hence, managing cash becomes cumbersome. 

Also, this feature in non-smartphones will allow the SME business to flourish, explore more new markets, channels that took a backseat for not using digital payments. The UPI 123 Pay makes the facilities under UPI now accessible to the lower rungs of the society which were so far excluded from the digital payment landscape.

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]]> https://dutchuncles.in/build/upi-123-pay-democratising-retail-payments-for-small-merchantsayments-for-small-merchants/feed/ 0 Tokenisation Rule:Its Impact on the E-Commerce Businesses and the Online Shoppers https://dutchuncles.in/transform/tokenisation-ruleits-impact-on-the-e-commerce-businesses-and-the-online-shoppers/ https://dutchuncles.in/transform/tokenisation-ruleits-impact-on-the-e-commerce-businesses-and-the-online-shoppers/#respond Wed, 22 Dec 2021 08:30:03 +0000 https://dutchuncles.in/?p=39017&preview=true&preview_id=39017 In a bid to enhance the security of transaction card data, RBI is emphasising tokenisation and has asked all businesses and payment gateways to remove sensitive customer data and card information on their websites and systems to bolster data security and use encrypted tokens to carry transactions. RBI has ordered all companies to comply with […]

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In a bid to enhance the security of transaction card data, RBI is emphasising tokenisation and has asked all businesses and payment gateways to remove sensitive customer data and card information on their websites and systems to bolster data security and use encrypted tokens to carry transactions. RBI has ordered all companies to comply with this rule strictly from 1st January 2022.

Why the emphasis on tokenisation?

Several businesses in India save their card payment transaction details in the system. In addition to storing card information, many e-commerce and D2C companies force their customer to store card details, making them susceptible to cyberattacks resulting in the theft of card information. Stolen card data of users is highly valuable in the darknet marketplace that is further used to carry out illegal bank transactions without the individual’s knowledge.

What is tokenisation?

Tokenisation provides its users an added layer of security by replacing the card details with a unique code or token which is a string of randomly generated numbers by an algorithm. Thus, allowing online purchases to go through without compromising on the card details. The tokens generated by the algorithm are unique for every debit or credit card and merchant platform where the card is used.

These token numbers even if cracked will not leave out any meaningful information to the cyberattackers.
In conventional online card payments, a successful transaction takes place based on information like the 16-digit card number, the card expiry date, the CVV as well as the one-time password or transaction PIN.

On the other hand in tokenisation, each number is unique for each combination of cards, devices, and token requestor. For a transaction to happen, the merchant or any shop owner initiates a tokenisation request to the card network that creates a proxy token to the card number and sends it back to the merchant. For initiating a transaction to a different merchant or from a different card, tokenisation is to be done again.

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Tokenisation provides its users an added layer of security by replacing the card details with a unique code or token which is a string of randomly generated numbers by an algorithm.

How are different fintech platforms reacting to tokenisation?

Razorpay has launched ‘Razorpay TokenHQ’ a multi-network Card-on-File (CoF) Tokenisation solution accessible to all businesses. Merchants using different payment gateways can tokenise cards using Razorpay’s tokenisation solution and route payments using their existing payment partnerships. Using Razorpay TokenHQ businesses will be able to create, process, delete and modify tokens for online card payment with customer’s consent at zero cost and effort.

Much to the likes of Razorpay, Walmart-backed digital payment firm PhonePe has launched PhonePe SafeCard- a tokenisation solution where merchant partners can create, process, delete and modify tokens for online card payments with customers’ consent on their platforms via a simple Application programming interface (API) integration. This saves time and effort also eliminates the need to integrate with multiple card networks.

PayU also announced its unique tokenisation solution ‘PayU Token Hub which will enable businesses to comply with RBIs latest guidelines for online card data storage also allowing issuing banks to generate their tokens.

How will it impact the existing online e-commerce and online businesses?

This new move from RBI is a progressive step towards safeguarding the vital card information and will benefit businesses with a smooth customer payment experience as repeat customers can simply use their CoF or access one-click checkout directly without going through the hassle of entering payment details again. However, the deadline given for businesses for transitioning to tokenisation is abrupt that will subsequently impact small and medium payment operators to go out of business which is already reeling under RBI’s new rule of recurring payments where transactions will be carried out only after the customer gives a green signal, in turn, affecting the continuity of business.
This sudden move will immensely impact around 5 million customers who frequently shop online by storing their card details and might result in customers switching to UPI-based payments or cash-on-delivery payment mode.

For e-commerce and D2C companies, tokenisation can impact cashback and equated monthly installments (EMIs) that customers pay through stored cards for purchases and buy-now-pay-later options. This would mean pushing customers for a UPI payment for products of smaller ticket sizes.

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]]> https://dutchuncles.in/transform/tokenisation-ruleits-impact-on-the-e-commerce-businesses-and-the-online-shoppers/feed/ 0 M2P Building a Global Infrastructure Play https://dutchuncles.in/featured/m2p-building-a-global-infrastructure-play/ https://dutchuncles.in/featured/m2p-building-a-global-infrastructure-play/#respond Sat, 10 Jul 2021 05:35:18 +0000 https://dutchuncles.in/?p=32592&preview=true&preview_id=32592 Technology is an asset in any industry. When your technology game is strong, you can even help your competitors do well in the market rather than thwart their efforts. M2P Fintech is a unique start-up because it befriends banks instead of appearing as a threat to them. They are happy to give other fintech start-ups […]

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Technology is an asset in any industry. When your technology game is strong, you can even help your competitors do well in the market rather than thwart their efforts. M2P Fintech is a unique start-up because it befriends banks instead of appearing as a threat to them. They are happy to give other fintech start-ups a leg up and are subsequently scaling up rapidly.

Who is M2P?

M2P Fintech is a start-up based in Chennai founded in 2015 which is an API infrastructure company that works hand in glove with the fintech industry. It’s a pan Asia company with an active presence in the Southeast Asia and MENA regions.

What do they do?

M2P can be thought of as an ‘enabler’ of fintech companies. They enable fintech companies to launch their own products by taking advantage of their superior cutting-edge technology solutions.

How are they different from other fintech start-ups?

The main differentiator of M2P from other fintech start-ups is that they are a B2B solutions provider. They partner with other fintech start-ups, banking, and financial institutions who take advantage of their technology to build fintech products and services. Rather than providing fintech products directly to the customer, they help other start-ups get into the market. Instead of getting into head on competition with other start-ups in the same space, M2P is actively supporting and helping scale up other fintech companies with their technology. This is what sets them apart in the industry.

Product offerings

It offers fintech services like Instant Issuance, Tokenisation, Programmable credit cards. Their services are used to integrate APIs across cards and wallets. They also facilitate neo banking capabilities like bank accounts, deposit accounts and remittances.

The company’s API platform is called YapPay. Other fintech start-ups can support and build payments services on Yap’s API infrastructure platform. Yap provides embedded finance infrastructure for start-ups to build new use cases. Its API helps banks and other financial institutions integrate various digital payment modes to their products like debit, credit, prepaid, QR, UPI and toll payments.

How M2P intends to build large scale product platforms

M2P intends to build large scale product platforms by reimagining their technology stack to serve new products in efficient ways. They will upgrade their platform to serve global use cases by making it cloud-native, cloud-provider agnostic, and by making sure they adhere to high standards of resilience, security, and availability. M2P will eventually build out a global infrastructure play by building large-scale product platforms that conform to global best practices around infrastructure operations.

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The main differentiator of M2P from other fintech start-ups is that they are a B2B solutions provider.

What’s in it for me?

While traditional banks are hesitant to partner with fintech start-ups because they see them as direct competitors, M2P Fintech approached them from a very new perspective. The company stepped into the fintech industry when it was still a novel sector in India. The timing was right. They focused heavily on their tech stack which would go on to become their biggest USP.

Their product offerings sat perfectly well with the market demand for cashless payments during the onset of the pandemic and continues to do so. They offered to become the ultimate technology partner of fintech services for traditional banks. The start-up also quickly ventured into new, lucrative markets where they were well received and served a large purpose. They are continuing to explore new and profitable markets across the globe which are proving to be high-growth avenues for the company. These are all the things that M2P fintech did right along their journey which other fintech start-ups can emulate.

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]]> https://dutchuncles.in/featured/m2p-building-a-global-infrastructure-play/feed/ 0 Advent of UPI and the Fall of Mobile Wallets https://dutchuncles.in/build/advent-of-upi-and-the-fall-of-mobile-wallets/ https://dutchuncles.in/build/advent-of-upi-and-the-fall-of-mobile-wallets/#respond Wed, 16 Jun 2021 04:41:57 +0000 https://dutchuncles.in/?p=30539&preview=true&preview_id=30539 How UPI obtained higher leverage over mobile wallets Ever since the Unified Payments Interface (UPI) came about, the relevance of digital wallets was dimmed. In 2016, when the National Payments Corporation of India (NPCI) first introduced UPI, consumers saw the benefits of quick money transfer between bank accounts over the tedious process of first loading […]

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How UPI obtained higher leverage over mobile wallets

Ever since the Unified Payments Interface (UPI) came about, the relevance of digital wallets was dimmed. In 2016, when the National Payments Corporation of India (NPCI) first introduced UPI, consumers saw the benefits of quick money transfer between bank accounts over the tedious process of first loading e-wallets with money before a transfer could be facilitated. This was why e-wallets were less preferred and UPI enjoyed higher leverage in digital payments.

RBI’s Interoperability rule to benefit mobile wallet users.

However, The Reserve Bank of India (RBI) has recently introduced a new interoperability rule which will allow interoperability between mobile wallets of different brands and ‘closed-and-open-loop’ prepaid cards. The rules are user-friendly since up until now, mobile wallets of different brands couldn’t send and receive money to and from each other.

Also, certain merchants were biased towards certain mobile wallet brands which was an inconvenience to consumers.

Upside of the new interoperability rules for mobile wallets

The new rules will benefit both e-wallet users and providers. Users will reopen their abandoned e-wallets and use them for payments and transfers. Mobile wallet providers who were suffering from low deposits and balance will see renewed activity.

Downside of the new interoperability rules for mobile wallets

The new rules may hinder the growth of mobile wallets’ market share in India. The improved flexibility among mobile wallet consumers to easily switch between brands may come as a blow to providers. This is because frequently migrating users will be difficult to keep under the brand umbrella.

Mobile wallet providers need to comply with fixed UPI market share.

The NPCI in the end of 2020 imposed a 30% market share cap on UPI for mobile wallet transactions. As such, mobile wallet providers need to comply with the market share limits hereon before they can see an increase in their consumer volume and revenue. The bottom line is that UPI still holds a higher leverage over e-wallets and e-wallet providers need the help of UPI to stay relevant, and see growth in their usage.

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In 2016, when the National Payments Corporation of India (NPCI) first introduced UPI, consumers saw the benefits of quick money transfer between bank accounts over the tedious process of first loading e-wallets with money before a transfer could be facilitated.

What’s in it for me?

Starting April 2022, mobile wallet users who are fully compliant with their KYC can send and receive money to other mobile wallet providers. Mobile wallet providers will need to collaborate with NPCI to link UPI IDs with e-wallets. They will need to enable interoperability through UPI.

Encourage users to pay for small transactions using their e-wallets. With the new levelled out playing field, new business opportunities open up for wallet companies. Henceforth, you need not build up merchant networks to acquire e-wallet customers since UPI-accepting merchants will also accept wallet transactions.

Encourage users of your e-wallet to make it their primary payment method. You can also easily acquire new wallet users since consumers will be open to getting on board due to interoperability. Complying with the RBI norms, all Prepaid Payment Instruments (PPI) issuers taking advantage of the new interoperability rules should establish appropriate customer redressal mechanisms to limit customer liability. 

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]]> https://dutchuncles.in/build/advent-of-upi-and-the-fall-of-mobile-wallets/feed/ 0 PhonePe: Making the Most of India’s Digital Adoption https://dutchuncles.in/inspire/phonepe-making-the-most-of-indias-digital-adoption/ https://dutchuncles.in/inspire/phonepe-making-the-most-of-indias-digital-adoption/#respond Fri, 28 May 2021 09:35:04 +0000 https://dutchuncles.in/?p=29028&preview=true&preview_id=29028 While payment apps in India are coming up with new offerings to corner the market, this particular start-up kicked it up a notch. Have you ever heard of a payment app that has its own ATM? This unusual but brilliant move was made by Bengaluru-based start-up PhonePe. Before we explore this first-of-its-kind offering by the […]

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While payment apps in India are coming up with new offerings to corner the market, this particular start-up kicked it up a notch. Have you ever heard of a payment app that has its own ATM? This unusual but brilliant move was made by Bengaluru-based start-up PhonePe.

Before we explore this first-of-its-kind offering by the payment app, we rewind six years to when the start-up began its humble journey from a simple digital wallet to its culmination into one of the leading fintech players in the industry today.

Inception 1.0

In 2015, Sameer Nigam, Rahul Chari and Burzin Engineer started PhonePe to cause much positive destruction in the way people look at digital payments. The aim was to develop an app to give an overall new experience to users while ensuring financial inclusion and easy access.

The trio, however, was unsure whether PhonePe would be a payments company or a platform company. The market was transitioning into a phase of digital wallets boom back then. The early entrants – Paytm and Mobikwik – had already gained traction in the crowded e-wallet market at the back of sound funding, cash backs and product development.

In April 2016, National Payments Corporation of India (NPCI), a government-backed consortium of banks, introduced Unified Payments Interface (UPI). Within a few days of this launch, e-commerce giant Flipkart, which was scouting for suitable acquisitions in the payments solutions space, announced its acquisition of PhonePe which saw ‘UPI’ as its golden ticket and was building a payments solution app based on the same.

In August, merely 4 months after UPI’s launch, the PhonePe app was made live. It became the first non-banking entity to launch a UPI app. It was only a year later that Google Pay and Paytm entered the UPI space, but PhonePe had gained the first mover’s advantage.

The start-up took a different approach from how the market was trying to solve the problem of online payments. They did not want to remain restricted in terms of product scalability by building a banking app, a recharge app or a utility payment app. Rather, the aim was to reach a wider audience with a scalable product and maintain inclusivity.

What does the PhonePe app do? It enables transfer of money from one bank to another (UPI allows a customer to pay directly from a bank account to different merchants, both online and offline, without details like IFSC code, net banking passwords, etc). Customers can use the app to pay bills, recharge pre-paid mobile numbers, recharge data card and DTH, send or request money from friends by entering their number, name or VPA, split bills between people, check bank account balance and scan QR codes to pay.

The app also sells products and services like groceries, insurance, food (via product promotion). What is fascinating about PhonePe is its evolution and growth over the past years. Within three months of its launch, over 10 Million users downloaded the app.

In a short span, it has surpassed its peers with over 280 Million registered users. It is processing over 100 Million transactions in a month and an annual total payment volume (TPV) of over $388 Billion, including 17.5 Million merchants across 500 cities.

Going Beyond a Digital Wallet

PhonePe has been in a continuous mode of evolution since inception. It entered the BFSI segment in 2017 by offering gold on its platform in partnership with SafeGold and MMTC-PAMP.

The start-up registered its wealth management division, PhonePe Wealth Services Pvt Ltd., marking its debut into financial services. It dispatched shared assets and protection monetary items like expense saving assets, liquid assets, worldwide travel protection and protection cover for COVID-19 in association with various financial organisations like Yes Bank, ICICI Prudential Life Insurance, Axis Bank among others.

It has now become the largest platform for buying digital gold with a 35% market share.

In the most recent development, PhonePe is planning to foray into stockbroking. The aim is to encourage its existing users to put a fraction of their unutilised funds in wallets into the stock market. This will intensify the battle in the stock market which is dominated by players like Zerodha, Upstox and others.

The fintech company has a vision of becoming a full-fledged diversified financial services player and stock broking is an addition to the same. The expansion and plunge into different categories is also a part of the company’s strategy of monetizing its customer base – offering financial service being one of them.

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PhonePe is processing over 100 Million transactions in a month and an annual total payment volume of over $388 Billion.

Making Inroads in Unorganized Market

In a bid to tap the huge opportunity in the retail market, PhonePe started focussing on Kirana stores owners and small-scale retailers and help them adapt to the new-age style of doing business.

The company has ‘PhonePe for Business’ app, which offers end-to-end control of the payment process, including instant payment confirmations, receipts, and reconciliations and grocery deliveries to Kirana store owners and small merchants.

PhonePe has recently launched its own ATM which will enable people to get cash from merchant partners through transactions with their mobile devices. The company said that the service will enable neighborhood stores to act as ATMs for PhonePe users. At the same time, it will also help merchants avoid the hassle of storing cash and making multiple trips to the bank branch to deposit their extra cash.

The brand is also advertising the SMEs and local shopping brands on its app to raise awareness and help them market their products. The app offers its merchant partners to grow their business by giving them a personalised store page on the app, allowing them to list their store timings, share their product catalogue, and promote home delivery options, thereby reaching out to a much wider customer base.

The app further offers voice notifications in 11 vernacular languages free of cost. This helps the merchants during peak business hours as the app announces the amount received from customers, saving all the time to check the customer’s phone screen or wait for a bank message.

PhonePe at present has 13 Million merchants on its platform and it is accepted as a payment option at over 17.5 offline and online merchant outlets across 500 cities.

The company has come up with a Bluetooth-enabled Point Of Sale (POS) device that is indigenously designed to help merchants of all sizes – be it local kirana stores, petrol pumps, food chains or quick service restaurants to help accelerate digital inclusion at all levels.

PhonePe was one of the first fintech companies to identify the needs and demands of the local merchants who are not equipped with technology like the big retailers, hence the POS device. This device works like a traditional calculator which is cheap, easy to use and highly durable, something a merchant would be interested in.

The App’s USP

PhonePe user interface is simple and easy to use even if one has never made a digital transaction before. This makes it a Unique Selling Proposition (USP) as different age groups of people are often challenged while making online payments and revisit its adoption unless out of compulsion.

This is an important feature in such a highly competitive and crowded payments app market. The app, since inception, was kept simple and hence scalable to incorporate more verticals, especially in the context of Kirana store owners and small retailers who might not be well-versed with digital mediums.

There is an ease of looking up terms, navigating across pages and options besides strong privacy measures on the app. In terms of users’ experience, it ranks at the top, in comparison to its peers – Paytm, Gpay, Razorpay and Instamojo.

The company also introduced a separate chat service for users and merchants in over 11 Indian languages to further smoothen the user experience.

In 2018, the start-up had launched Switch which offers more than 260 mini web applications and allowed users to switch between various apps, including travel, grocery, food and shopping, within the PhonePe app.

This innovation turned out to be unique as users do not have to download and install all these apps individually on their phones, they can easily access the services from Switch without any additional convenience fee or charge. This further added to the app’s USP of ease and comfort and created a superior product experience.

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PhonePe user interface is simple and easy to use even if one has never made a digital transaction before.

Clash of the Titans: Paytm vs PhonePe vs Google

To date, PhonePe is cashing on its first mover’s advantage. The start-up defeated Google Pay in terms of market share between November and January 2021 and became the top UPI mobile app. The company processed 968.72 Million UPI transactions involving nearly Rs 1.92 lakh crore in January 2021.

The duo dominate the UPI apps market and have over 75% market share together. Paytm Payments Bank app, on the other hand, stands third followed by Axis Bank app and Amazon Pay.

The technical glitches faced by the banking partners of Google Pay and the government-mandated cap on UPI transactions, boosted the number of UPI transactions for PhonePe and Paytm as customers moved away from the former.

However, this cannot be credited as the sole reason for PhonePe’s lead in the sector. The start-up has been aggressively investing in its offline merchant base which has increased its user base and transactions besides its massive adoption in Tier 3 and Tier 4. Both PhonePe and Paytm have been adding more use-cases, growing the overall UPI ecosystem.

Founders Sameer Nigam, Burzin Engineer, Rahul Chari

The Spin-Off

In December 2020, Flipkart divested PhonePe into a separate unit and partially sold its stake to its parent company, Walmart. PhonePe came under Walmart post Flipkart’s acquisition but continues to retain majority stake in shareholding pattern. The acquisition saw a rising growth of PhonePe as a brand.

At present, Walmart is considering spinning off the start-up to give the company more flexibility and freedom to pursue its development and get access to dedicated capital for its long-term goals. The partial spin-off will bring new opportunities for the start-up as it will be able to raise more primary capital, giving autonomy to operations.

PhonePe has come a long way since its inception from starting as a digital wallet to becoming the leader in UPI transactions.

As per the founders, the start-up aims to be profitable by 2022 and go public in 2023. The company bagged $700 Million from Walmart and other existing investors and another $21 Million from Flipkart, which still holds 87% stake in PhonePe, in December 2020. The post-funding valuation stood at $5.5 Billion.

Product innovation, diversification (fintech market) and the company’s mass-market focus (reach beyond metros) will continue feeling its future growth.

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]]> https://dutchuncles.in/inspire/phonepe-making-the-most-of-indias-digital-adoption/feed/ 0 How Can Businesses Reconcile Using Virtual Bank Accounts? https://dutchuncles.in/build/how-can-businesses-reconcile-using-virtual-bank-accounts/ https://dutchuncles.in/build/how-can-businesses-reconcile-using-virtual-bank-accounts/#respond Tue, 20 Apr 2021 01:30:04 +0000 https://dutchuncles.in/?p=23693&preview=true&preview_id=23693 The apprehensions of going out are arising due to the rapid spread of the infection. Businesses are trying their best to reduce visits to banks, skipping the paperwork, and adapt to virtual banking. For years, businesses in India have been collecting large payments from bank transfers. The collection of payment is easy, but what seems […]

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The apprehensions of going out are arising due to the rapid spread of the infection. Businesses are trying their best to reduce visits to banks, skipping the paperwork, and adapt to virtual banking. For years, businesses in India have been collecting large payments from bank transfers. The collection of payment is easy, but what seems to be cumbersome for the businesses is the reconciliation process since it is subjected to human error that increases administrative costs. 

What are Virtual Bank Accounts? 

Virtual bank accounts that have no physical existence, are temporary where transactions happen on behalf of a real, physical account. Similar to creating an account on Facebook or Instagram, a virtual bank account can be created in seconds. Reconciling payments in a virtual bank account happens in real-time conserving time and money. The operating and maintenance costs of a virtual account are lower than a physical bank account. A business can open multiple virtual bank accounts that are difficult in a physical bank account. 

Types of Virtual Account 

 Virtual accounts are of two types 

  1. Account created on top of a nodal or escrow account

An escrow account is an account where funds are held in trust whilst two or more parties complete a transaction. Virtual accounts created on nodal or escrow are temporary. Here the funds remain only for a short duration till transferred to its payee. In this when we make payment, the money goes to a nodal/escrow account through a payment gateway for ex-PayU, Razorpay. These payment gateways have various virtual accounts. Let us understand this with an example- Suppose a business owner purchases goods from a wholesaler using transaction medium NEFT/RTGS or IMPS, the funds are transferred in a virtual account given by the payment gateway that stays there temporarily until it reaches the wholesaler in a settlement. 

  1. Account created on top of a business or current account

In this, the virtual accounts are made based on a business or current account where a banking institution is involved in setting up virtual accounts. When a customer transacts through the virtual account, the business owner will identify the payer’s details through the virtual account number. Businesses can deduce customer information and reconcile payments with ease, also it can get an overview of transactions happening across departments. Virtual accounts are beneficial for educational institutions to easily manage student fees. With every student being assigned a virtual account number that can be created based on roll number and batch year, the institute can e-collect fees via bank accounts and use the account number to track where the payment has come from. 

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Virtual bank accounts that have no physical existence, are temporary where transactions happen on behalf of a real, physical account.

Benefits to a Business for using a Virtual Bank account 

Automated Payment reconciliation

For businesses that involve thousands of transactions on a day-to-day basis, payment reconciliation can be a daunting task. For instance, let us take an e-commerce business that receives payments from various sources such as payment gateways, direct bank transfers, wallet payments, and transactions funded by loans. In such cases, where a virtual bank account is absent, the company would have deployed a finance executive for the task of reconciling with the actual funds received in the bank accounts, which is a tedious task. 

Reduced Expenditure 

Small businesses spend approximately 2-3 percent per transaction on payment gateways. Considering the volume of the transaction the business receives per day the collective amount of spending becomes an expensive affair. Instead of spending a small percentage of the transaction amount, businesses can pay a fixed cost for each payment processed. This benefit while dealing with high ticket transactions. 

Improved Customer Experience

Customers for digital transactions want the process to be smooth and hassle-free. They expect a confirmation from the payee side. Customer experience can be enhanced by organising the cash flow and financial management. We should not be giving the customers doubt about the successful payment transaction. 

How Razorpay’s Smart Collect Can Help Create Virtual Bank Account 

Razorpay’s Smart Collect, one can generate virtual bank accounts and virtual payment addresses (UPI IDs) on-demand and share the details with customers to accept payments through NEFT, RTGS, IMPS, and UPI. The virtual bank accounts and UPI IDs are linked with the bank account that the business owner has registered with Razorpay. 

Since a new virtual bank account or UPI ID can be created for each customer, businesses easily track payments made by payers. Razorpay sends notifications of the payments made to any of the accounts or UPI IDs and also handles the complexity of reconciling these payments on the owners’ behalf.

Reasons to choose Razorpay Smart Collect 

Below are the reasons why businesses should implement Smart Collect over other e-collect options: 

  • Instantly create virtual bank account: We can generate virtual bank accounts and virtual UPI IDs in no-time assigned to individual customers in real-time via Razorpay Dashboard and APIs (Application Programme Interface) 
  • Zero Costs: There is zero cost involved to create customised virtual bank accounts and UPI IDs bearing your company or brand’s name as a prefix.  
  • Multi-Bank Support: We can create customised account numbers on multiple banks within a single integration. 
  • Auto-Refund: It can instantly refund any payment made to wrong and deactivated accounts. 
  • Payment from Multiple payment modes: Virtual bank accounts created from Razopay’s smart collect can accept payments through NEFT, RTGS, IMPS, and UPI.
  • Third-Party Validation: It accepts payment-only accounts that are KYC (Know Your Customer) verified. 
  • Real-time notifications: Receive real-time notifications on payments with Webhooks.
  • Personalisation: Create custom UPI IDs to match your business needs and branding.

How Smart Collect enables accepting payments.

  • Single, large one-time payments

Smart Collect enables the customer to collect a single, large one-time payment from a customer (preferably via NEFT, RTGS, IMPS or UPI. We can create a virtual bank account or UPI ID and share the generated account details (account number and IFSC) or UPI ID with the customer. When the customer makes the payment to this account or UPI ID, Razorpay sends notifications so that the account can be closed.

  • Regular payments of large volume

For payments of large volume where we need to send customers regular invoices, a virtual bank account or UPI ID for them can be created to share the details where the customer can add the bank account as a beneficiary on their preferred netbanking portal and transfer the money using NEFT, RTGS or IMPS. The customer can add a UPI ID on their UPI payment service provider app such as Google Pay and transfer the money using UPI. Razorpay notifies you every time a payment is made towards the account, thus simplifying the reconciliation process.

  • Campaign or event-based payment 

Accepting payments from multiple sources for a multitude of campaigns or events is possible through Smart Collect to create a virtual bank account or UPI ID for each event or campaign and share details accordingly. The payment is made for each event through any of these accounts or UPI ID, Razorpay sends alerts of the account or UPI ID used to do the payment, thus eliminating the need to identify which campaign or event payment was made for. 

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Razorpay’s Smart Collect, one can generate virtual bank accounts and virtual payment addresses (UPI IDs) on-demand and share the details with customers to accept payments through NEFT, RTGS, IMPS, and UPI.

How Does Smart Collect Work?

  • Sign up for a Razorpay Account.
  • Create virtual bank accounts or virtual UPI IDs tagged to the customer.
  • Share account details (such as account number, IFSC, and Name) or UPI ID with the customer.
  • Customers add essential details like adding the bank account as a beneficiary on their preferred net banking portal and transferring the money using NEFT, RTGS, or IMPS. If using UPI apps then the customer adds the UPI ID on their UPI payment service provider app, such as Google Pay, and transfers the money using UPI.
  • Payment deposited in these virtual accounts or UPI ID is settled into the business’s bank account linked with Razorpay.

What is in it for the businesses?

Thus, creating a virtual bank offers a seamless payment to the customers and gives businesses the flexibility to businesses. With lockdowns and the effects of pandemic persisting, the future of payments will be dominated by digital mode, thus businesses must pivot to virtual bank accounts for convenient reconciliation. So, without much wait, start using smart collect to create virtual bank accounts now. 

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]]> https://dutchuncles.in/build/how-can-businesses-reconcile-using-virtual-bank-accounts/feed/ 0 UPI Vs Payment Gateway: Which is Secured? https://dutchuncles.in/featured/upi-vs-payment-gateway-which-is-secured/ https://dutchuncles.in/featured/upi-vs-payment-gateway-which-is-secured/#respond Tue, 06 Apr 2021 01:35:04 +0000 https://dutchuncles.in/?p=22360&preview=true&preview_id=22360 It was quite alarming for the stakeholders when one of the oldest banks of India, the Bank of Maharashtra could not shield itself from a financial fraud that siphoned off Rs 25 Crores from the bank’s accounts due to a bug found in its UPI application. The bank had procured a UPI solution from a […]

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It was quite alarming for the stakeholders when one of the oldest banks of India, the Bank of Maharashtra could not shield itself from a financial fraud that siphoned off Rs 25 Crores from the bank’s accounts due to a bug found in its UPI application. The bank had procured a UPI solution from a vendor which had a bug that resulted in the money moving out of the sender’s account. The number of transactions in the pandemic through Unified Payments Interface (UPI) skyrocketed upto 2.29 billion in February 2021 as per the data provided by the National Payments Corporation of India (NPCI). But with acceleration in e-commerce shopping and online payments, and lack of robust security infrastructures to contain financial frauds, the incidents of such frauds have reached an all-time high. As payments through UPI gradually gain firm in the small business owners belonging to semi-urban and rural cities of India, the lack of digital literacy and less knowledge of online frauds and scams is allowing scammers to take undue advantage to dupe people of their hard-earned money. Transactions through payment gateway as compared to UPI payments are more secured. 

4 financial scams doing rounds that MSMEs need to be aware of 

 

Phishing Scams

Fraudsters in disguise of customers can send the business owners unauthorised payment links through SMS. These fake payment links have a stark resemblance with the original links, without much thinking, they click on the link that directs them to the payment app to select any of the apps for auto-debit. Once we give permission the amounts get debited from the UPI app instantly. Hence, to the business owners, it is advised to never process any transactions through the SMS. Also, by clicking on the payment link, the fraudsters may infect your phone with a virus/malware designed to scoop out the financial details stored in the device.

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The number of transactions in the pandemic through Unified Payments Interface (UPI) skyrocketed upto 2.29 billion in February 2021 as per the data provided by the National Payments Corporation of India (NPCI).

Fake Helpline numbers and handles on Social media

Users of UPI at times express their resentment on social media handles on UPI about issues related to redeeming offers, availing cashback, money transfers, refunds by sharing a screenshot of their UPI handle. Little do the users know that every social media page that has the word NPCI or BHIM or any bank name is not authentic. Scamsters create such handles to make you reveal your account details. The fraudsters under the pretext of helping and guising as admin of the fake UPI page keep a track of what is being posted on Facebook or Twitter, where they ask to share card details, OTP details. As soon as vital details are shared the money is deducted from the account. 

Fake UPI apps

There are any fake UPI apps available on Google Play stores. In 2016, when PM Narendra Modi encouraged to use online payment apps, NPCI received several complaints about duplicate BHIM apps. Some of them had fake names such as Modi Bhim, Bhim Modi App, BHIM Payment-UPI Guide, BHIM Banking guide, Modi ka Bhim, etc. However, these apps were pulled out but business owners who are new to online payments might be unaware of these fake UPI apps. 

Alert to transfer requests

 Fraudsters posing as customers dupe the business owners by taking advantage of the ‘request money’ feature in UPI apps. They initially happen to show interest in buying a product and try to engage with the seller on a phone call. Due to the lack of knowledge on digital payments they make the seller transfer the money using UPI apps’ ‘request money’ option. 

May I help you

This might seem UPI to be having an excellent customer care service. But, scamsters have set up their fake helpline numbers online. When a user seeks help through the number, pretending to be the company’s technician and advising the complainant to download screen sharing apps such as Teamviewer to resolve the issue instantly. Under the pretext of solving the problem, the fraudster with the help of such third-party apps gains full access over the phone to access all financial details. According to a February 2019 press release from NPCI, five cases were reported with the Reserve Bank of India (RBI) of fraudsters using these third-party screen-sharing apps to control mobile phones for malicious purposes. With third-party screen sharing apps, fraudsters can get complete access to a user’s card number, CVV code, and initiate financial transactions. Hence, MSMEs must be wary of giving their access to their mobile device to anyone. 

How Payment Gateways from Razorpay can Help Here? 

A payment gateway has a bank working behind the scenes to issue merchant accounts. The primary function of a payment gateway is to provide a secure money transfer through its link between a website and the bank. Once a customer fills in the payment details on the website the gateway receives them and forwards them to the bank for verification. It is a secured tunnel that connects your bank account to the platform where your money is transferred. Payment gateway is a software that is authorised to conduct an online transaction through various payment modes such as net banking, credit card, debit card, UPI, or other many online wallets. 

How a Payment Gateway is secured? 

A payment gateway ensures the security of the data in the following manner: 

  • The payment transaction in the payment gateway is carried out through an HTTPS (Hypertext Transfer Protocol Secure) web address. The S in HTTPS guarantees security. MSMEs should make sure that a padlock symbol in the browser window frame is present whenever you visit a payment site. 
  • It uses the hash function. A hash function is a mathematical function that turns a numerical input value into another compressed numerical value. It is because of the hash function that the system uses a signed request from the business owner for validating the request transaction. The signed request is a secret word that is only known by the business owner and the payment gateway. 
  • The IP ( internet protocol) of the requesting server is verified to identify malicious activity to ensure the security of the payment page result. 
  • The payment gateways are secured with Virtual Payer Authentication (VPA). The VPA implementation under 3-D secure protocol adds a layer of security that allows the online sellers and customers to authenticate with each other with ease. 

Benefits of using a payment gateway 

A seamless and convenient payment process gives users a better experience. Below are the benefits of using a payment gateway for MSMEs.

PCI-DSS Compliance

Payment gateway is powered with PCI-DSS (Payment Card Industry Data Security Standard) compliance. The PCI-DSS compliance defines policies and for payment procedure and security. The compliances are ensuring security to store user’s data in the portal or gateway for recurring payments. For example- if a customer is regular to your business, then it can save your bank or card details in your website or app and will remain secured from any cybersecurity threat.

White-Label Wallet

Enables users to extract money from their bank account to the mobile wallet app that can be further used to make payments on various websites or apps.

Fraud Screening Tools

Payment gateways have the advantage of fraud screening tools that minimises the risk of losing information. These tools protect the Card Code Value (CCV), Card Verification Value (CVV), or even the Address Verification Service (AVS) and ensure that there is no fraudulent transaction. 

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According to a February 2019 press release from NPCI, five cases were reported with the Reserve Bank of India (RBI) of fraudsters using these third-party screen-sharing apps to control mobile phones for malicious purposes.

Why Razorpay’s payment gateway should be chosen by MSMEs

Below are some of the security protocols and processes that power Razorpay’s payment gateway : 

TLS (Transport Layer Security ) encryption 

The payment gateway from Razorpay uses the highest assurance SSL certificate i.e. EV SSL (Extended Validity SSL) certificate in its website the TLS certificate ensures that the data exchanged between the web server and the browser is secured. Without a TLS certificate, the data exchanged over the internet is unencrypted and is easily available to the scamsters for intercepting. 

The PCI-DSS Compliance 

Razorpay’s payment gateways follow PCI-DSS compliance which is a set of policies that safeguards sensitive cardholder information for all e-commerce websites and online payment systems. For a payment gateway to be PCI-DSS compliant they have to follow certain directives such as maintaining a secure network for processing payments that involve robust firewalls countering security threats and encryption of all information a user exchanges while checkout through TLS preventing the interception of data when payments are done from user’s system to Razorpay. Razorpay never stores sensitive information like CVV numbers, PINs, etc.

Another directive includes keeping updated with the new PCI-DSS mandates using updated software and spyware to strengthen itself to counter new software vulnerabilities for maximising data protection. 

Tokenisation

Tokenisation is the payment gateway that replaces a 16-digit card number with a digital identifier known as a token. Tokenisation ensures the safety of the original data meanwhile allowing the payment gateway to securely access the cardholder data and initiate secure payment. It works like this: Say, if an e-commerce website is hacked and one gets the tokens, it will be immensely difficult for the hacker to retrieve the actual card number from the token. To retrieve the details, any hacker would require the logic for tokenization which is not available publicly. 

Fraud Prevention

Besides these mandatory protocols, big data analytics and machine learning in Razorpay’s payment gateways have their fraud and risk prevention systems by diving deeper into customer’s data and analysing patterns which they classify either normal or suspicious transactions with utmost accuracy. 

Thus, Razorpay’s payment gateway has all the above-mentioned security processes that will help the MSMEs to accept online payments securely for their e-commerce business. So, without much wait let us begin using the payment gateway from Razorpay.

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]]> https://dutchuncles.in/featured/upi-vs-payment-gateway-which-is-secured/feed/ 0 Will 2021 Be The Year Of Innovation For The Payments Industry? https://dutchuncles.in/featured/will-2021-be-the-year-of-innovation-for-the-payments-industry/ https://dutchuncles.in/featured/will-2021-be-the-year-of-innovation-for-the-payments-industry/#respond Wed, 17 Feb 2021 06:35:04 +0000 https://dutchuncles.in/?p=14711&preview=true&preview_id=14711 After a year of struggles on all fronts, it’s safe to say that companies around the world found tremendous relief in only one thing – a digital shift. Digital transformation, especially the boom in payments industry, was essential to enable businesses, individuals and entire economies to cope with the enormous challenges posed by the COVID-19. […]

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After a year of struggles on all fronts, it’s safe to say that companies around the world found tremendous relief in only one thing – a digital shift. Digital transformation, especially the boom in payments industry, was essential to enable businesses, individuals and entire economies to cope with the enormous challenges posed by the COVID-19. Even after the pandemic is over, digital acceleration will not follow suit- it is here to stay.

Payment technology has played a crucial role in on-demand services, and this trend will continue the case with the digital transformation over the next year. Moreover, the free, real-time use of new and diverse payment methods is appealing for both merchant and consumer response options while challenging the industry ecosystem’s traditional payment value chain. As a result, the payments industry will pave the way for innovation.

The e-commerce sector, which is inherently more digital by nature, is increasingly adopting the business models to meet new consumer demands. To stay relevant in the future, physical retailers will have to respond to the pace of change and consider the new expectations and needs of their customers.

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Digital transformation was essential to enable businesses, individuals and entire economies to cope with the enormous challenges posed by the COVID-19 pandemic.

Challenges and Opportunities Will Lead to Innovation in Payments Industry

Cybersecurity

Businesses are expected to deliver a better customer experience while balancing data security and fraud prevention across all channels. This is one of the biggest challenges they face, and traders need the right tools to find the right balance.

Diversified Financial Services With Fintech

India’s fintech revolution has ushered in a new era of banking for the more than 63 million corporations who had been on the fringes of financial services for most, if not all, of the time.

Whether it’s creating a standard connection between institutional banks and small businesses for access to financial services, or enabling quick disbursement of packaged loans at moderate interest rates, fintech and digital payments sector is powering various parties necessary for the economy.

Identifying and catering to new audiences to micro-startups that specialize in particular financial services, there are numerous opportunities for fintech startups in India.

The UPI Momentum

The Unified Payments Interface (UPI) has broken records in the past year, and this momentum is expected to continue into 2021. Not to many people’s surprise, UPI is extending beyond the urban level and starting to enter the rural Indian space too. The boom in e-commerce will facilitate the penetration of UPIs, even in rural areas due to its ease of use and interoperability.

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