UPI Payments for Businesses – a Definitive Guide

As per a recent study, it is reported that UPI payments have exceeded a record of 5.58 Billion this year. In the modern, digital era, using UPI for business or payments has become a norm. Let us help you get an overview of UPI for businesses and how they can leverage its benefits.

Benefits of UPI Transactions for Businesses

Table of Contents

Are you doing business by making use of the UPI infrastructure? Are there benefits out of it? Yes! Here are some benefits to consider:

Ease of Reconciliation Through Dashboard: Reconciliation is simpler with the help of the user-friendly UPI transactions. Once you receive UPI payments as a business, you will be instantly notified about the transaction as well as payment details through the dashboard. With leading UPI dashboards, it is possible to track all the settlements at a single location. The dashboard will also allow you to keep track of all the settlements.

Moreover, it is also possible to customize the reports of the UPI transactions by making use of filters. It will help in tracking the status of different settlements within a specific period of time. It is also possible for businesses to check the settlement status of specific orders by entering the order IDs.

Reduced Transaction Fees: A payment gateway is intended at making life easier for merchants. There is no need to worry about the creation of partnerships with different banks in different nations. The resources and time saved upon skipping NDAs and improved diligence are highlights of UPI transactions. Indeed, this is in addition to the overall resources that might have been spent on the creation and processing of contracts.

A payment gateway is capable of taking care of these tasks while offering multiple modes of payments. What does a payment gateway charge in return? It is known as the TDR or Merchant Discount Rate. Also referred to as MDR or Merchant Discount Range, it is a minor transaction fee that you are expected to pay on every transaction with the help of the payment gateway.

The rate tends to differ as per the specific payment mode utilized by the customers. UPI transactions have the lowest TDRs of different types of payment modes. In some cases, a risk or platform fee is also charged to handle disputes, refunds, and settlements rather than a transaction processing fee.

Higher Transaction Limits: According to NPCI, there is a limit on UPI transactions at around INR 1 Lakh for every transaction. The limit tends to vary from one banking institution to another. For Peer-to-peer or P2P transactions, the limit remains at 10 on a daily basis. However, the transaction limit is not applicable for P2M or Peer-to-Merchant transactions.

The UPI limits might not apply if you make use of a dedicated payment gateway. You can ensure any number of transactions on a daily basis.

Faster Settlement Cycles: The process of payment gateway settlement relates to crediting the payments by the account of the customers to the account of the merchants. In most cases, you can get access to specific variants of faster settlement cycles -including Standard and Instant. The standard settlement cycles remain at T+2 days. On the other hand, instant settlement cycles are executed within 15 minutes.

Using UPI for the Needs of Your Business

UPI for Collection

Integrating with a payment gateway for supporting the UPI flow: To simplify the overall payment process, it is possible to integrate with a dedicated payment gateway. However, it is important to make sure that the payment gateway is capable of supporting UPI flow. Ideally, the given feature will be available across Android, iOS, and web platforms.

After this, it is possible to accept payments through UPI-supported apps like PhonePay, GPay, Paytm, and so more.

Collection of In-app UPI Payments: In the modern era, customers are moving rapidly towards ensuring mobile payments. Mobile payments are only going to increase in the future. With mobile app UPI integration, it is possible for businesses to ensure UPI payments with the help of smartphones. Moreover, the overall customer experience will also improve significantly because of the faster checkout process.

UPI for Disbursal

UPI VPA Verification: Bank account details that are incorrect is the main cause of failures within business transfers. With respect to UPI transfers, entering the invalid VPA could imply transaction failure. To minimize such instances, businesses can ensure UPI VPA verification.
Automation of Business Payment Reconciliation: Businesses are expected to transfer bulk amounts to other businesses like vendors, suppliers, and other entities. Moreover, in some cases, they are also expected to refund money. This will make the reconciliation process quite complicated. With the help of Virtual UPI IDs or P2M-Virtual, it is possible to help businesses send money in bulk while ensuring reconciliation on an automatic basis.