Why enabling digital payments is key to SMBs’ survival during COVID-19

In an exclusive interview with SMBStory, Noopur Chaturvedi, Country Head - SMB Businesses, PayU India, describes the role of the payments company in digitising payments for Indian SMBs, and explains how they can survive the COVID-19 crisis.

Why enabling digital payments is key to SMBs’ survival during COVID-19

Tuesday July 07, 2020,

7 min Read

Even as India overtakes Russia to become the third-worst COVID-19 infected country in the world, our economy is slowly opening up to mitigate further economic damage of the extended lockdown. The SMB sector, which was the worst-hit during the lockdown, is slowly picking up.

During the ongoing crisis, stakeholders in the SMB ecosystem have learned the importance of digitising small businesses and enabling digital, contactless payments. Consumer behaviour is shifting online and customers are increasingly relying on digital platforms for groceries, education, and other essentials.

payu india

Noopur Chaturvedi, Country Head - SMB Businesses, PayU India

“An online presence will help SMBs connect with customers and attract business. COVID-19 has changed how SMBs look at payments. Earlier, merchants were content with using traditional ways of accepting payments. But after the pandemic, there is a surge in interest from offline merchants for digital solutions,” says Noopur Chaturvedi, Country Head - SMB Businesses, PayU India.

Naspers-backed digital payments company PayU and its local division PayU India offer digital solutions to SMBs to ease the process of making and collecting payments. During the COVID-19 pandemic, PayU India’s solutions for contactless payments saw renewed interest, the company claims, citing the example of PayU ePOS – a digital solution that allows merchants to accept contactless payments through smartphones via multiple modes such as uniquely-generated QR or payments links and Bharat QR.

In an exclusive interview with SMBStory, Noopur Chaturvedi describes the role of PayU India in digitising payments for Indian SMBs and explains how digital payments can help SMBs survive the crisis.

Edited excerpts from the interview:

SMBStory [SMBS]: What is the scope of PayU India's work with SMBs?

Noopur Chaturvedi [NC]: PayU is a leading online payment solution provider in India. In the SMB segment, we provide payment solutions for all sizes of businesses, ranging from freelancers and home businesses, to medium-sized organisations. Many of these businesses are going online for the first time and PayU partners with them to help them digitise every step of their journey, right from creating online websites to accepting payments.

We enable businesses which may not have an IT team or the knowledge needed to create online infrastructure and transact easily on their sites. For instance, PayU’s on-boarding process is fully online and ensures easy integration of the payment gateway on all platforms.

Small, mobile-first businesses can create a website within a few minutes via the PayU app. We also offer our 3.5 lakh merchant base the highest transaction success rates in the industry, over 100 payment modes, and more than 70 local payment methods.

SMBS: How have you been helping SMBs grow over the past few years?

NC: A McKinsey report stated that India will see a 40 percent growth in internet penetration and there will be 700 million smartphone users by 2023, many of them mobile-first. Digital payments are anticipated to reach $135.2 billion in 2023, and yet almost 70 percent of Indian SMBs are still offline.

We have seen many of these small businesses still rely on traditional methods of doing business which are time-consuming and prone to human error, hindering efficiency, productivity, and profit.

We have been helping them grow by offering products that use the latest technologies such as Artificial Intelligence (AI), Machine Learning (ML), predictive analytics and big data. Over the years, we have introduced multiple innovative products and solutions that would ensure a seamless transaction experience for customers, in turn increasing reach and improving ease of doing business.

SMBS: What are some of these solutions?

NC: Last year, we launched a multi-functional PayU app designed for merchants to conveniently track their business transactions on the move. PayU also introduced a unique merchant service platform, PayU Assist, to provide automated customer service experience to its merchant base.

The feature has achieved a 70 percent reduction in weekly merchant queries and a 95 percent reduction in retail buyer queries. It reduced query resolution time from 25 hours to two hours, and merchant queries have reduced from 2,300 to 650 a week.

We offer several features that simplify transactions, back end processes and customer management such as issuing bulk payments and instant refunds through payouts, subscriptions for recurring payments, payment links, itemised invoicing, instant settlements, international payments acceptance, and the buttons which enable merchants to start collecting payments on their website.

SMBS: How have you been helping SMBs cope with lockdown and COVID-19?

NC: We were able to quickly implement several initiatives to help SMBs within the first few weeks of COVID-19.

We came out with a platform called ‘Startups Helping Startups’, through which emerging businesses could help each other. With 32 partners such as Shopify, Zoho, Shopmatic, Verloop, Atlassian etc, businesses could avail offers ranging from setting up ecommerce stores at Rs 50 per month to a free web, app, and WhatsApp chatbots for customer support automation.

To bring easy loans for our SMB merchants which needed credit to run their businesses smoothly, we partnered with Indifi. SMB merchants can avail loan amounts up to Rs 50 lakh with offers such as revolving line of credit with the flexibility of drawdown as and when needed, and pro-rata interest calculated on daily outstanding amounts.

PayU also offered to build a free website with a built-in payment gateway and provided 100 percent TDR waiver on the first Rs 50,000 worth of business done via PayU. We also enabled zero transaction fee for NGOs on all payments collected – through this, we extended help to NGOs amid COVID-19 by offering TDR waivers on certain kinds of donations.

Cash advances to merchants were also given to help them with working capital and liquidity issues they may be facing.

SMBS: What lessons can SMBs learn from the crisis?

NC: While COVID-19 has hampered the ease of doing business and brought uncertainty to the SMB sector, it is essential to stay optimistic and look at the opportunities that are available.

If there is one thing that we have all learnt during this lockdown, it is the significance of being digitally connected. Therefore, one of the biggest learnings that the country’s SMBs should implement is to digitise themselves. SMBs that are fast, adaptive, and proactive also have a better chance at emerging out of this situation as winners.

Some might need to re-evaluate their business models and plans in order to sustain the business, and they should not hesitate in doing so. It is also important to have a crisis management strategy in place at all times, keeping in mind varied scenarios including the short-term and long-term impacts of the crisis.

While focusing on building their business, SMBs should also focus on creating a financial backup and reservoir of funding, and have a robust digital and technology-enabled ecosystem that can ensure minimum damage to productivity needs.

SMBS: In the digital solutions and payments space, what are the new opportunities lying in store for SMBs?

NC: SMBs can use the downtime post-COVID-19 to build capacity. Considering that consumers will still be adhering to norms of social distancing, contactless payments and remote commerce are bound to see a jump.

Businesses should use this time to create an online presence and even to build their online stores, install or further understand how a digital gateway can help their business, drive business growth with data analytics, learn how to improve cash-flow and re-invest, invest in technological innovations, and re-evaluate business models and plans to improve efficiencies. 

It is important that SMBs digitise as many processes as possible for a wider reach, to provide a seamless payment experience to customers, and so that they invest less time in routine, time-consuming processes like settlements or payouts, and focus on their core businesses.

Businesses should be very careful and choose a multi-faceted payment gateway suite which provides several features, and can cater to their customers’ demands. At the same time, they should look for a gateway which is cost-effective and affordable, and offers zero setup charges and no Annual Maintenance Charges (AMC).

They should carefully consider gateways that offer robust security, preferably PCI DSS certified. Moreover, the gateway should offer excellent customer support and a seamless transaction and checkout experience as this directly improves customer stickiness. Ideally, the merchant onboarding process should be fast, easy, and convenient.

Edited by Kanishk Singh