Digital payments processor PayU on Tuesday announced the launch of its new platform, PayUnow, to bring small and medium businesses (SMBs) online.
The new platform will enable offline businesses to create an online identity with their own business page, where they can accept digital payments directly into their bank account, PayU said in a press release. PayUnow also offers instant sign-up with online KYC.
Backed by Naspers, PayU said it plans to invest close to Rs 50 crore in the product development and marketing of PayUnow over the next two years. The new platform aims to bring around 1 million merchants online by 2020.
The platform will allow SMBs to sign up, either through the app or the web. It will also allow businesses to choose a custom link, which will be unique to the business. On this link, a website with free payment gateway is automatically created in a few minutes.
Businesses can then share this link with customers, allowing them to pay using the link through their preferred mode of payment – credit card, debit card, net banking, UPI etc.
Bengaluru-based digital payment service Instamojo also works on a similar model with respect to providing payments to SMBs. In a recent announcement, Instamojo said it aims to take its SME base from five lakh at present to 25 lakh by 2020.
Pilots of PayUnow have yielded the company more than 5,000 monthly active users with a monthly transaction run-rate of two lakh.
Commenting on the launch of the new platform for the SMB sector, Nameet Potnis, Business Head, PayUnow, was quoted as saying the release,
“We endeavor to introduce products that will help provide solutions to SMBs. Currently in the beta phase we have over 5000 monthly active merchants doing over 2,00,000 transactions per month. PayUnow empowers these businesses to grow fast by easily accepting all kinds of digital payments and also creates their online identity.”
PayU’s internal research shows the payment collection process in the informal sector is complex, and businesses invest a lot of time and resources in collecting payments. They face several issues ranging from monthly collection limit on wallets, cheque bounces, to NEFT unavailability on holidays, and tracking the status of their payments etc.
Several industry reports suggest less than 2 percent of India’s 50 million SMBs have an online presence. PayUnow aims to empower the remaining 98 percent SMBs who have not yet adopted digital mode for their business. While 30 percent of the total SMBs are digitally engaged for personal use, 68 percent of them have no online presence at all.
PayU processes over Rs 90,000 crore of digital payments in India annually. PayU’s offerings are presently used by over 450,000 merchants across India, and it has products like business payment gateway PayUBiz, and its ultra-short term credit option, LazyPay which is similar to offerings like Simpl.
Recently, in order to make its platform more lucrative, Instamojo had said it will make NEFT transactions free for its sellers, absorbing the cost for NEFT transactions.
In October last year, Gurgaon-based payments player MobiKwik had re-launched its payment gateway, Zaakpay, hiving it as a separate business unit. Around then, the company had spoken about plans to even cater to the SMB segment in India through the business unit.
Providing payment platform for SMBs will open a whole new world of opportunities for these payment platforms, including opportunities of cross-selling products like insurance, and credit to these untapped users.