Digital India campaign that was kick-started by the government in 2015 initiated a snowball effect. According to the data by Bank for International Settlements (BIS), digital transactions grew 55% in India over the last year, which was more than the growth in countries like China and the UK. Continuing the upward growth, the digital payments are predicted to grow at about 29% annually by the year 2024.
Even amidst the COVID-19 pandemic, NPCI (National Payments Corporation of India) has reported a growth of 42% in digital payments across the nation. Customers had already been using digital payment methods across e-commerce platforms to a large extent. But now a major upward thrust is also noticed among the local businesses as they adapt and accept digital methods for payment and collection.
Digital payments have definitely changed the way we transact. As we move closer to the cash-free economy, it is worthwhile to highlight how the local business has transformed their businesses to manage customer payments digitally.
Managing Customer Payments Digitally
Digital transformation has enabled the integration of technology into almost every aspect of a business. From marketing to taxation, everything can be managed digitally without any hassles. But taking customer payments to the digital platform was one of the biggest steps for local businesses. It not only smoothened payment collection but also enhanced customer experience.
Since customers no longer prefer to carry cash, it makes sense to provide them with an option to pay digitally. More and more customers, especially the young population, favour the convenience of mobile wallets over the hassles of cash exchange. Digitally conscious customers demand ways to pay that are easy, safe and quick. Cash definitely does not feature anywhere in the list.
As the digital revolution penetrates deeper into society, local businesses do not have to worry about the lack of infrastructure or resources. Banks and fintech solution providers are coming up with more and more innovative and secure ways of digital payments and reach even the farthest corners of the market.
UPI (Unified Payment Interface) introduced by NPCI was one such tool. It was a big step toward financial inclusion, and it revolutionized the way we paid money to each other. UPI made it easier to pay not only through smartphones but also provided a platform to 420 million feature phone users of the country to go digital. Even the smallest grocery store in a remote village in the country is now enabled to collect payment through UPI. Additionally, local business owners can use UPI to make a small payment to the vendors and suppliers from the convenience of their mobile.
Banking cards have been around for a long time. But with new security and shopping features, debit and credit cards have become all the more popular. Customers can use cards to pay online or through the POS machine at the business outlet. In spite of the charges levied by the service provider, cards remain a preferred mode of payment for customers of local businesses. With the introduction of RuPay, NPCI has made cards affordable even to the Jan-Dhan account holders.
In recent years, mobile wallets have become tremendously popular as payment methods for both online and offline shopping transactions. Local businesses are encouraging customers to use mobile wallets not only for the ease of transaction but also for a plethora of discounts and offers available through the wallets. For instance, a small restaurant can offer to accept payment through a mobile wallet and provide discounts to the customer for the purchase.
To help the under-served segment of the society become a part of this digital revolution, NPCI had launched USSD (Unstructured Supplementary Service Data) service. The method was designed, keeping in mind the limited availability of resources for these customers. The payment service runs without mobile data or smartphone.
Digital Payment Solutions For Your Business
Adapting is the key to thriving for any business. With so many options of digital payments available in the market, there is no reason why you should not use it for your business. It is easier than you think!
Most of the banks and fintech solution providers have a strong support system to facilitate the on-boarding of new businesses. Get in touch with any of these and understand what works best for you. Depending on the type of your business, you can choose from the many options available. The cost involved is minimal and is justified by the return on this investment.
Going digital for payments also has additional benefits. You can use the same platform to pay for the purchases of your business. The amount moves from bank account to bank account and saves you those hectic bank visits. Since everything is digital, it is easier to keep track of every small transaction. Cash transactions, on the other hand, can become cumbersome for smaller amounts. All these efforts sum up and save you a lot in terms of time and money.
Digital payments platforms also make it easier for local businesses to track their sales and purchase invoices for GST filing. Businesses with a turnover exceeding Rs 40 lakhs (Rs 20 lakhs for service providers) are required by law to register on GSTN (Goods and Services Tax Network) and file regular returns. Keeping in mind the benefits of GST for your business, you can also opt to register for GST voluntarily even if your business is below the GST threshold.
Using a reliable billing platform and accepting digital payments ensures that you are able to keep a close track of your income and expenses. Minimal transactions in cash mean lesser chances of error or oversight.
Local businesses are no longer beyond the reach of technology. There are a number of options well-suited for every type of business. It is no longer an option for your business to not go digital. Instead, it is the need of the hour because your customer is now digitally adept. He is exploring new ways to make his buying experience more convenient. It is only natural that those who are not able to provide the facility to the customer will lose out in the long run.