Over the past half a decade, India has emerged as the hub of startups in the world. The numbers today look pretty promising for the entrepreneurs in India. Government data suggests that India has the third-largest start-up ecosystem globally, an industry that was growing by 18% in 2018. The startup industry has been experiencing a boom over the last few years.
Credit for the increase in these numbers also goes to the convenience and popularity of digital payments. With increasing internet connection penetration and less reliance on cash, online payment is slated to be the new normal of the payments industry, and startups could benefit the most from this revolution. This calls for immediate action from the entrepreneurial sector to embrace online payments.
What are the digital payment options available?
Before the digital payment revolution, people had to wait in long queues in the banks to transfer money. All of this can be done within seconds using online means. Masses today have access to credit cards, debit cards, UPI, net banking, mobile wallets, and several other services. Entrepreneurs, especially those in the eCommerce space, need to equip their start-ups to accept all these primary modes of payment. This integration can be done quickly by just signing up with a digital payment system like a payment gateway or a link. The clients or customers can pay the business with any suitable payment mode via the payment system.
How can digital payments lead to the success of an entrepreneur?
- Increased Profits through increased efficiency
Digital payments make the entire payment collection process streamlined. Using digital payments, funds can be collected instantaneously without delay and significantly reduce administrative and manual costs. Additionally, both the customer and the entrepreneur get immediate notification about the success or failure of the payment.
A digital payment system also makes tracking payments easy and convenient. The entrepreneur can promptly check the status of the payments from the gateway dashboard. Digital applications can also benefit large-scale entrepreneurs by saving taxes through e-filing and e-returns.
- Reaching out to More Customers
Businesses need more customers to maximize their revenues. A digital payment system can help widen this customer base by expanding the business to the entire country, as digital payments can be made anywhere. Thus, businesses need not be limited to some geographical regions, which can help boost revenue. Traditional payments means are bound by geography resulting in a limited reach-out.
Moreover, people are turning to the online medium for most of their purchases. Almost every product or service has an online presence. This has made the customer base lazier, a behavior that entrepreneurs can capitalize on. If the entrepreneur tries reaching out to this customer base looking for online solutions, they can generate good revenues. Today Having multiple payment options also broadens the targeted customer segment.
- Better Cash Flow
Processing an online payment takes much less time than traditional payments. For startups, continuous cash flow is vital to keep things running. They can manage the transactions better and accept more payments with an online system. Online gateways also provide a dashboard where all transactions can be effectively monitored. One can also estimate the cash flow from these reports. Not to mention the labor cost that is associated with traditional payments is no longer needed.
- Improved Access to Credit
Small businesses need regular access to funds which can be solved through credit. It covers the expenditure on the business in the initial days. However, it is also difficult for businesses to get credit in the early days. This is simply because it is difficult to ascertain if the entrepreneur would repay the money. Even if they get access to credit, they are usually charged higher interests due to the lack of reliable credit history or they are hindered by strict collateral requirements. Accepting online payment helps build a credit score which enables entrepreneurs to get more accessible credit or loans.
- More Security
Online payments are more secure for businesses. While cheques can bounce and other traditional payments come with their problems, online payments are less prone to fraud. The payment gateway authorizes the payment only after authentication from the issuing bank. In case of any discrepancy, the transaction is aborted. Both the customer and merchant are informed about the same. The entrepreneur can also use the payment processor’s customer service to track down suspicious, incomplete, or fraudulent transactions.
- Round the clock service
Digital payments empower the entrepreneur to keep the business open 24/7. Customers today prefer shopping as per their comfort. They might get the time to order something at even odd hours in the night. Online payments provide the opportunity of accepting orders and payments round the clock. This can significantly increase the sales for the business while also leading to more satisfied customers.
Electronic payments generate records that increase the transparency of all business transactions. This discourages all types of illicit activities, bribes, or corruption. It also makes things transparent for the government and compliance purposes.
Digital payments can give a much-needed boost to the revenues of start-ups. Payment processing services like Zaakpay provide seamless features for all entrepreneurs to accept online payments without any hassle.