Cashless commerce - why you should move to digital payments : How three-way payments work in India

The implementation of cashless commerce has become the need of the hour, fuelled by the Digital India movement. India has emerged as one of the global digital powerhouses with a seamless digital payment system. A combination of factors is driving consumer behaviour from cash payments to cashless payments. Here are some of the key factors:

Digital Payment Convenience - The introduction of the Unified Payment Interface (UPI) has simplified the online payment process. All you need to do is enter your phone number or scan a QR code to complete the payment. Credit card companies offer various offers and benefits for paying through credit cards such as reward points, free VIP lounges, etc., making credit cards an attractive option.

Digitisation opens up endless possibilities for businesses. Here are some of the advantages of digital payments:

Accounting Transparency - Digital payments can be tracked and accessed anywhere. You can look at your bank statement or UPI wallet to trace transactions and confirm whether a particular customer has paid. With cash payments, however, the only proof you have is the ledger that records the transaction. Unless you use accounting software, finding transactions in paper records can be time-consuming and cumbersome. As a result, digital payments increase accounting transparency and simplify small business management.

Cost Effectiveness - Currently, there are no additional fees for UPI transactions. In addition, credit cards offer you an interest-free period of 45-60 days, which greatly improves the working capital gap. As one of the many small and medium-sized businesses, you'll find digital payments to be more economical and beneficial than cash transactions in the long run.

Reduce risk - Cash is vulnerable to theft. You always need to be vigilant about who has access to funds. In addition, businesses with a high level of cash transactions are prone to embezzlement. Switching to digital payments can help reduce this risk. The less cash you have, the less hassle you'll have!

Avoidance of penalties - In order to ensure transparency in transactions, the government has put in place a number of provisions to ensure that corporate transactions remain transparent. These provisions are reflected in the Income Tax Act. For example, you cannot declare cash expenditure exceeding Rs 10,000 per day. Hence, digitising payments through banking methods is always the preferred option to avoid penalties and denial of deductions.

A guide to moving to cashless payments:

To help prepare your business for the next phase of growth, here are some tips:

Understand your customers' payment preferences - It's vital to understand whether your customers choose to pay in cash or digitally. Are they more accustomed to swiping a card or paying via an app? Knowing these details is vital to avoid unnecessary investments, for example, you may have invested heavily in an app payment feature only to find that the majority of your customers prefer to pay by credit card.

Offer multiple payment options - Give your customers plenty of choice. Don't limit them to credit cards or cash. Your business can only go cashless if customers have multiple digital payment options.

Securing Payments - Whether you are a small business or a medium-sized enterprise, payment security is critical. In an online environment where hackers are everywhere, strengthening the security of your payment or transaction system is key to protecting your business interests.

In short, transforming your company into a cashless business is not difficult. As the economy digitises, you have to keep up with the times.

The PayU payment gateway helps merchants provide a seamless payment experience for their customers. With over 150 payment methods and one of the highest payment success rates in the industry, you can accept as many payment methods as your customers prefer. Additionally, there are no restrictions on accepting international payments. Whether you're a small business or a large corporation, it's time to go digital!

Frequently Asked Questions:

How a good payment gateway can help merchants go cashless? Payment gateways are ideal small business solutions because customers will only choose to pay online if they experience a seamless payment process. Therefore, it is vital to invest in a quality payment gateway that supports multiple payment methods and has a high payment success rate.

What are the disadvantages of digital payments? Digital payments can be somewhat difficult for older people. There is also the possibility of cyber-attacks. However, a secure payment gateway can reduce this risk.