While reconciling payments is tough in general, it’s tougher for a select few industries that see a large volume of money coming at a high frequency. For companies operating in such industries, it is quite difficult to track each and every payment from vendors or customers.
That is why we came up with Paytm Large Payment Collection, which simplifies the reconciliation process as well as accepting large amounts of payments.
In this article, we will talk about three industries that leverage this feature and saw exponential growth. But before that, let’s find out what Paytm Large Payment Collection is.
What is Paytm Large Payment Collection?
Essentially, Paytm Large Payment Collection helps businesses easily collect large amounts of money from customers, which they usually accept via bank transfers, cheques, and demand drafts.
It replaces these payment modes with a Virtual Account Number (VAN), which merchants create for every customer to accept money.
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VAN details include a 16-digit alphanumeric account number, which is VAN, IFSC of Paytm Payments Bank, and the beneficiary’s name. IFSC and beneficiary name are fixed as it will be linked with Paytm Payments Bank.
The 16-digit VAN consists of a merchant’s identifier code, for example, IITK for IIT Kanpur. This is a unique code that other merchants can’t use.
VAN also includes a 10-character alphanumeric ID, which the merchant should match with the entity with which they want to reconcile the payment. It can also be assigned to indicate the invoice number.
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How to create and accept money via VAN?
Step 1: Businesses can create VAN from their Paytm dashboard or via Paytm API. Merchants will have to enter information such as the customer’s full name, assign a virtual ID, and their phone number. It must be noted that there is no limit to the number of VANs a merchant can create to accept large payments.
Step 2: Once VAN is created, merchants can share the VAN details with the respective customer via SMS, email, or while sending the invoice.
Step 3: The customer will have to transfer the payment to the VAN account shared by the merchant.
Step 4: The merchant will receive notifications once the money is credited to the VAN account. This notification will have detailed information about the customer (customer or business ID of merchant’s system, customer or business name, and other customers/business attributes). Merchants can also access this information via reports.
This is how Paytm Large Payment Collection enables businesses to completely automate the reconciliation process of large ticket-size payments from a huge number of customers.
The settlement period for every payment is T+1 business days.
Three industries that leverage Paytm Large Payment Collection
- Educational institutes
Schools, colleges, and other educational institutions accept fees and other types of payments on a recurring basis from a large number of parents and students. It is traditionally an industry where cash or cheque payments are a norm. This makes reconciliation a painstaking process for the school administration.
However, in the past few years, as digital payments have started becoming mainstream, parents and administration prefer to transact using net banking and other modes. While this solved the problem of managing cash and encashing cheques, reconciliation was still an issue.
That is when many educational institutes started leveraging Paytm Large Payment Collection to make their reconciliation process simpler.
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With Paytm Large Payment Collection, schools and colleges assign VAN based on every student’s unique registration or roll number along with their bank name. Then they share VAN details with every student or parent, who in turn pay fees every month.
This makes the reconciliation process a one-click step on the Paytm dashboard.
- Manufacturers
The manufacturing industry deals with a lot of customers who order products in large quantities that vary every month. Be it textile, furniture, or electronics, this pattern is true for almost all kinds of manufacturing companies.
Since manufacturers sell products in bulk to multiple retailers who might be based in different cities, they accept large amounts of money regularly. Reconciling them all every month is a big task and very often a lot of accounting falls through the cracks.
To fix this problem, manufacturing companies relied on Paytm Large Payment Collection.
Asking retailers to pay in the VAN account, which has a unique account number based on the invoice number, is a big relief for manufacturing companies as every payment can be easily traced back.
Merchants use Paytm dashboard to track every payment and find out both pending and successful payments.
- Lending industry
The struggle for lending companies to constantly reconcile repayments of loans from debtors is real. Every mismatch in reconciliation costs lending companies and throws off their planning and future course of action.
The industry has always needed a digital payment innovation that not only helps in accepting recurring payments from a large number of customers but also automates the reconciliation process.
Every payment made by debtors is automatically updated without any intervention from the lending companies. In addition to this, Paytm Large Payment Collection improves their cash flow issue as they receive payments in T+1 working days.
Frequently Asked Questions
Question: How is bulk payment made to a virtual bank account or UPI ID with Paytm Large Payment Collection?
Answer: The customer can make a transaction to the bank account via a simple NEFT bank transfer, RTGS, or IMPS bank transfer transaction from their preferred internet banking portal.
Question: Can customers make bulk payments to a virtual bank account from their bank?
Answer: Yes. Customers will have to enter the beneficiary details provided by the merchant or Paytm in the bank transfer form. They can choose to fill out either an RTGS or NEFT bank transfer form after visiting their respective bank. It should be noted that customers will not be able to deposit cash in a virtual bank account.
Question: Can merchants close a virtual bank account?
Answer: A virtual account can either be closed or deactivated from the Paytm for Business dashboard. Alternatively, it can also be used by using the API. However, once the merchant starts the process to close or deactivate their virtual account, they will not be able to receive payments from customers.
Question: Can payments received in VAN be refunded, if such a need arises?
Answer: Yes, Paytm Large Payment Collection initiates an instant refund to the user on the bank account details provided at the time of payment.
The merchants’ dashboard automatically gets updated with information such as the payee’s bank account number, IFSC code, and bank account name. Merchants can use these details to initiate refunds.
In cases where a refund to the source is not possible, the merchant needs to provide the bank details to which the refund needs to be processed. Once they give the bank account details, Paytm will refund the money to that bank account.
