‘Digital channel goes beyond payments for MSMEs to fill gaps in transparency, offer business insights’

August 04, 2020 12:32 PM

Technology for MSMEs: Covid-19 has accelerated the adoption of digital payment infrastructure while limiting cash-intensive transactions, as more and more SMBs are relying on payment gateways to scale up their businesses.

Mobile apps are some of the most popular omnichannel solutions and help merchants easily create payment links and itemized invoices.
  • By Noopur Chaturvedi

Technology for MSMEs: Each disruption is an inflection point for new trends and new patterns. And this reflects in the digitalization of small and medium businesses as well. Digitization of SMBs was a trend on the rise even before the Covid-19 pandemic. A 2019 survey conducted by Tally and Kantar highlighted that 40 per cent of the MSMEs already use digital banking and payment services with another 40 per cent likely to adopt soon. Covid-19 has accelerated the adoption of digital payment infrastructure while limiting cash-intensive transactions, as more and more SMBs are relying on payment gateways to scale up their businesses.  

However, merchants do not always realize that adopting digital payment infrastructure goes beyond taking payments offline to online. Other use cases of such an advanced infrastructure are improving merchant sales and increasing cash flow, enhancing customer stickiness, and providing an overview of the business. With a wide variety of payment options and technologies at their disposal, merchants are now well-equipped to cater to meet customers’ requirements for digital delivery and payment needs. This includes a range of online and offline payment options at all points of sale.

In the post-Covid-19 world, some of the biggest benefits of a digitized payment gateway are:

Omnichannel approach for customer needs

Creating convenience for the customer has emerged as a necessity. Merchants are moving beyond offering a limited number of payment solutions to equipping themselves with a versatile and flexible payment model to enable customers to pay anywhere, anytime. They need to meet customer requirements for digital delivery and payment, at all points of the purchase journey. With an omnichannel payment approach, merchants can allow consumers to use their preferred payment mode without depending on one channel and enjoy a seamless checkout experience. For example, a consumer walks into an electronics store to make a purchase, selects the product and instead of paying through cash/debit cards, opts to pay through a customized payment link sent by a merchant, or through his QR code and even uses EMI at point of sale. During checkout, merchants can offer different options -payment links, QR codes, subscription, or recurring billing, and offer a frictionless payment experience. 

Mobile apps are some of the most popular omnichannel solutions and help merchants easily create payment links and itemized invoices, receive payments, and track business performance. Newer features of apps include allowing merchants to share links with regular customers and receive payments repeatedly via the same link, essentially removing the hassle of sending repeated invoices. All this can be done effortlessly, from the merchant’s smartphone itself.  

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AI, ML for process automation

Artificial intelligence and machine-learning driven tools and platforms have made great strides in providing insights. Adoption of payment gateway infrastructure offers several benefits to merchants, one of which is powerful business dashboards that lower costs, while accumulating more data-driven intelligence, and reduces time spent on repetitive tasks. With the help of AI and ML-based business dashboards, merchants can glean insights from past performances and understand customer needs, expectations, interests, and lifecycle better. With query resolution platforms and chatbots, merchants can solve issues in minimal time. There are several actionable insights that merchants can glean as well, such as the history of past transactions, refunds, disputes, and settlements, that help them cater to their customers better.

Contactless payments

With social distancing being the new norm, consumers and merchants are advocating limited use of cash and driving adoption of digital mode of transactions such as UPI, QR codes, and payment links. SMBs are realizing the need for contactless payment technologies as they are swift, secure, and transparent. It curbs the length of the transactional process by reducing the number of steps involved and transfers money at an accelerated pace. It also eliminates friction at the point of sale, improves transaction speed, and enables businesses to serve customers in a shorter window. 

Electronic point of sale (ePOS) enables merchants to accept contactless payments via QR codes or payments links, with multiple payment options, offer EMIs to customers, track their business performance on-the-go, and even make smarter decisions and tweak their strategy effectively. Be it grocery stores, food delivery services, or an online seller, many merchants across verticals are adopting ePOS given their minimum purchase and maintenance costs.

We are sure to see more innovation in the fintech ecosystem as SMBs look forward to running their businesses without hassles or disruptions. With the Covid-19 pandemic forcing businesses and consumers to adopt contactless transactions, hitherto traditional, offline, cash-intensive businesses are understanding the need to address existing gaps and migrate to a digital payment infrastructure. 

Noopur Chaturvedi is the Country Head – Small and Medium Businesses at PayU India. Views expressed are the author’s own.

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