Apps using the newly launched Unified Payments Interface (UPI) are threatening to dislodge the hold mobile wallets currently have on small & medium enterprises (SMEs) and retailers.Platforms like Goodbox, Shoptimize and Nowfloats, which help small ventures take their businesses online, say there's growing interest among these companies to test the UPI payment method.And those successfully testing them are keen to integrate it into their platforms.
Launched by the government a few months ago, UPI is a platform that allows users to make transactions between their bank account and a third-party bank account instantly through smartphones. The system works with the respective mobile numbers, without the need to know and register the other party's bank account details.
“The UPI platform is quite advanced. You get money in real time. Merchants are all excited about this faster, cheaper method. We have used it ourselves, and the commerce app based on UPI is super easy to use," says Abey Zachariah, founder of Goodbox, which works with 13,000 SMEs.
Srihari Srinivasan owns a convenience store called Eezykart in HSR Layout in south Bengaluru. He uses the Goodbox platform. He started accepting e-wallets only three months ago, following demonetisation. He said a lot of custo mers were then asking for payments through Paytm. Almost 35% of his customers now pay through cards, another 40% pay by cash, and the remaining use e-wallets or come through online aggregator platforms.But today , he is promoting the government's UPI app, BHIM, to all his customers.
“I prefer the money coming straight to my bank account than have an e-wallet in between. Also, there are no charges for transactions. Mine is a low-margin business and even a 1% transaction charge affects my bottom line," said Srinivasan.
Mangesh Panditrao of Shoptimize agreed the motivation is to reduce the transaction fee. “While mobile wallets and cards have almost 2% as transaction fees, UPI doesn't have any ," he said.
Shoptimize, which has 76 merchants on the platform, will integrate the UPI payment option in the next three months.Jasminder Singh, co-founder of Nowfloats, which has helped over 1 lakh businesses come online and which will launch its UPI integration in two months, said merchants will go where the money is.
Sony Joy , who started Chillr as a mobile payment app based on IMPS (immediate payment service), plans to shift the whole app to the UPI platform, but he thinks UPI apps can't run on zero-transaction fees forever. “It needs to be a mass-driven channel, and so it has kept low rates to attract people. But it's not clear if this will continue," he said.
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