A new dawn broke this year for educational trust Prakash Sanstha, which was established along the ghats in Varanasi nearly three decades ago. The trust, set up by the family of Banaras Hindu University graduate Sanjay Mishra to educate the children of non-resident Indians and foreigners who travel to the holy city, in subjects ranging from Sanskrit language to the history of Varanasi, switched to an online payment system.
Mishra started emailing or texting a payments link to his clients well before they landed in India, providing an alternative to the practice of making cash payments, which range from Rs 1,000 to Rs 5,000.
"About 50% of the payments now happen through online means. It removes the awkwardness of teachers asking students for payments. I plan to make the collection 100% from this year," said Mishra, 45, who teaches about 350 students per batch a short-term course in Hindu culture, its ceremonies and the history of the city.
Mishra is not alone. Yoga teachers, musicians, fitness instructors and even farmers are taking to online payment gateways which are no longer the preserve of large e-commerce portals.
Ahmednagar-based Rahul Ghule, who produces jaggery from sugarcane via his manufacturing unit Swadved Agro, for instance, has started using iKaaz -- a digital gateway to transfer payments to farmers from whom he sources sugarcane.
"Earlier we incurred significant administration cost as farmers and small merchants only accept cash payments, and we had to send a person to collect cash or pay the farmers," said Ghule.
Last year, he decided to switch to collecting payments online. "It has reduced our administration cost by at least 15% so far," said Ghule, who sells jaggery to wholesalers in Maharashtra. Fitness gyms and neighbourhood clubs are also adopting digital gateways. Vivek Devnani, vice president of Khar gymkhana in Mumbai, included Citrus as a payment gateway when the establishment revamped its website this year.
"It has increased our monthly collections. Of our 8,000-plus customers, we are seeing around 1,200 of them paying online already," he said, adding, "Integrating a digital gateway has helped both NRIs and frequently travelling customers who now pay online."
Online payments also lead to increased renewals. "It was normal for customers to delay monthly subscription payments by weeks," said Satyam Kumar, owner of Health Hub, a gym based in Gurgaon. Kumar has started using PayUMoney for digital payments linked to his savings bank account since this year. "After I installed a payment gateway, almost 50% of my customers now pay on time online," said Kumar, 29.
Payment gateways are taking advantage of India's organized businesses and even offering them a complementary website if they wish to have a gateway.
"We even develop a webpage or website if a society, tutor or musician does not have a website, to help in collection of payments," said Nitin Gupta, co-founder and CEO of PayU India. As per estimates from the Internet and Mobile Association of India, Rs 1.2 lakh crore worth of digital payments were made in India last year, and 3% of these were done using mobile wallets.
It is also estimated that by 2020, 30% of digital payments will be made using a mobile wallet. Others such as Paytm are developing innovative solutions to attract small business owners from the pool of about 33 million small and medium enterprises in India.
Noida-based Paytm is working on a solution which will do away with the requirement of a swipe machine for the small merchants. It is planning a solution that will allow customers to simply 'check-in' on the Paytm app at a restaurant or salon.
"The money will automatically get deducted from a customer's digital wallet after he moves out of the location. For a review, a merchant may also offer a discount, say 10%, to users," said Amit Lakhotia, vice president, business at Paytm. "We are also working on a QR code application where just by scanning a code, one would be able to buy a product or service through an app," he added.
Citrus has developed Project Flight, which allows small merchants and service providers to set up a payment solution in a few minutes. "With a simple sign-up and a code, their payments can go live in 30 minutes.
We have also enabled them to upload all necessary financial documents to have a payment gateway," said Amrish Rau, managing director of Citrus Pay. The solution works across platforms and Citrus charges 1.99% plus Rs 3 per transaction. Citrus Pay, which is looking to have 30,000 merchants on board within 18 months, is targeting revenue of Rs 100 crore in 2015-16.
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