Bank transfer modes like Real Time Gross Settlement (RTGS) and National Electronic Funds Transfer (NEFT) have been in play and used for transactions occurring via both online and offline platforms for numerous years now.
Although many new payment modes have been introduced over these years, many businesses and customers still rely on modes such as cheques, demand drafts, RTGS and NEFT bank transfers for receiving and making payments. Generally, businesses that use such payment modes handle large ticket sizes and prefer accepting payments via bank transfers so that they can save on the payment processing charges.
Such scenarios call for the use of bank transfer payments. While these payment modes provide easy functionality, they often affect the operational efficiency of the businesses. Bank transfers require a lot of manual labor and effort from verifying the payment source, validating the value of a payment, reconciling the receivables’ accounts, among other tasks. Therefore, it can turn out to be quite the hassle for an organization.
It requires both time and effort to keep track of the customers who owe you money along with verifying the ones who have made the payments. Reconciliation of accounts involves a lot of complex manual effort. It can be manageable for businesses that have a limited number of bank transfer transactions in one day. But, if you have a business in which you receive about hundreds of bank transfers in a day, you will require a dedicated resource who can do the job of verifying the source and time of payments.
And if the same customer receivables are in thousands for a day, you will require a large team to do the reconciliation job of these bank transfers. It leads to wastage of both time and money for businesses.
Businesses that receive bank transfers in bulk generally require additional software or systems to manage reconciliations. This process is complicated as it is not directly related to the process of collections that are handled by the respective banks. The process of mapping one transaction to a particular payment is not an easy and straightforward task, considering each transaction requires interaction between two parties.
All this leads to poor management of a company’s cash flow, complicates the process of management of accounts receivables, and therefore impacts the growth of a business.
Paytm offers merchants various methods to manage payments, and we have come up with yet another powerful solution to help businesses track customer payments better. Ladies and gentlemen, we give you Paytm iCollect — a platform that automates the collection of payments and reconciliations.
How Can Paytm’s iCollect Help You Increase Operational Efficiency?
The iCollect offered by Paytm helps in automating the complete process by allowing merchants to simply generate virtual bank accounts that help in collecting payments through NEFT, IMPS, and RTGS. These virtual bank account numbers make the reconciliation of customer receivables easy, quick, and hassle-free for the businesses. It also helps in saving a large amount of human and monetary resources.
Explained below are the four easy steps following which the merchants can set up the Paytm iCollect and automate the bank transfer procedure:
Step 1: Use the API or dashboard to create a Virtual Account Number.
Step 2: Share the VAN or Virtual Account Number with the customer. After this, the customer will be able to add it as a beneficiary.
Step 3: The customer will then make a transfer using either IMPS, RTGS, or NEFT to the virtual account number.
Step 4: The merchant receives the payment and gets notified immediately.
Why Are Virtual Account Numbers Necessary?
By this point, you must be wondering “what is the need for these virtual bank accounts?” So, sharing your actual bank account number for receiving either a NEFT, RTGS, or IMPS with the customers has many disadvantages, the most common one being the problem of reconciliation.
Reconciliation of the customer receivables can be quite a task as it involves the merchant having to match the bank reference IDs provided by the customers to those existing in the bank account. Paytm’s iCollect helps in addressing this problem and making the customer receivables’ reconciliation easier via one single platform. Merchants can do this by simply creating a VAN for each customer that helps in easy identification of the payments received.
This solution can be integrated with just a few codes and can be managed easily via a dynamic dashboard. Generally, a VAN looks something like:
Note: Account number is 16 characters (a combination of letters and numbers). The first four characters represent the company prefix selected by the merchant at the time of payment mode configuration to her business account.
Example — Let us assume IIT Kanpur wants to collect VANs for its students. Hence, a sample VAN should appear as “10IITK20210023TA”. Here, 20210023 is a unique Roll Number of each student in the institute and TA is the first letter of the first and last name of the student. This way a student will always remember the VAN corresponding to which the payment needs to be made.
This solution is highly useful for merchants, especially in providing maximum flexibility to businesses. Outlined below are some of the business requirements that Paytm caters to with its iCollect solution:
- One Time Payments: This can be the right solution for merchants who need to accept a single and large payment from a customer through NEFT, IMPS, and RTGS. As soon as the merchant receives payments, the account can be closed.
- Recurring Payments: Merchants who have customers that are likely to make payments that are recurring in nature can create dedicated VANs for every customer. It helps in keeping track of the customer receivables easily, without any hassle.
- Special Events Based Payments: This is useful when merchants are expecting payments for special events. For this, merchants create unique VANs for customers. It helps in the segregation of the cash inflow for control as well as visibility.
Features of the Paytm iCollect
The iCollect solution also offers numerous features that make sure the merchant has maximum control and easy visibility of the accounts receivable and their reconciliation. The key features of Paytm’s iCollect are:
- Easy Refunds: Merchants can initiate full or partial refunds to the customers using the dashboard. Refunds go directly to the customers’ bank accounts.
- Customers’ Virtual Accounts Number: The merchant can create the VAN the way he or she wants. They can assign specific numbers for customers or customize other fields, for example, highlighting the company name.
- Tracking of Payment Status: iCollect enables merchants to track the status of each transaction and VAN in real-time. Also, merchants are notified as soon as any payment gets completed.
- Easy Reporting: Merchants can access insights using the merchant dashboard and study reports on collections, settlements, and much more.
Get started with Paytm iCollect to leverage the ease of tracking receivables and reconciliations today!