The Impact of Real-Time Settlements on Businesses


When one thinks of digitization, the expectation is that things will start happening instantly and almost in real-time. While this is largely true for other sectors, digital payments still have to deal with regulations. This results in a slight delay when it comes to merchants accessing their money after customers pay them digitally.

The ease of online transactions and the immediacy of the process has made digital payments one of the most popular choices. As per the Reserve Bank of India, the volume of digital transactions in the country grew at an astonishing rate of 58.8 percent in 2018-19.

However, from a business point of view, digital transactions take longer to reflect in their bank accounts, sometimes taking up to 72 hours. This poses a huge liquidity problem for small and medium businesses (SMBs). The demand for real-time settlements has grown by leaps and bounds due to this huge challenge.

Reasons for the delay in settlements

Once a customer digitally pays the seller for their purchase, the latter immediately gets a notification that they have received ‘X’ amount of money. While the money does indeed get deducted from the customer’s account to reach the merchant’s account, the second part of the process requires some reconciliation to be done.

After the customer pays the merchant, the money sits in a virtual account until the payment gateway and merchant’s bank reconcile and validate the payment.

The systems in the backend check for several factors such as discounts, returns, taxes and commissions. Only after these are accounted for, the merchant’s bank account gets credited. While other payment gateways take at least T+2 days – where T is the day of the transaction – to complete this whole settlement process, Paytm Payment Gateway does it in T+1 days, even on bank holidays and weekends.

While these checks are put in place to ensure every transaction is fair with little to no chances of fraud, it does put the burden on merchants as they can’t access their money immediately.

What if we told you that without diluting the settlement and security process you can see your money in the account as soon as the customer pays? Welcome to the world of real-time settlement, powered by Paytm Payment Gateway.

A quick explanation of real-time settlements

Paytm Payment Gateway’s real-time settlement feature allows instant transfer of money to merchants’ bank accounts instead of waiting for it to reflect on a later date. This feature is available for all the businesses in India, which they can avail for a small fee.

The icing on the cake is that we don’t press pause on real-time settlements on holidays or weekends. This premium feature is available 365 days, including bank and public holidays.

The instant transfer of money into merchants’ bank accounts can be utilized for payments received through any of the payment methods, such as netbanking, UPI, credit or debit cards, IMPS, and wallet.

Benefits of using real-time settlements

Paytm for Business was made to solve all the payment woes of Indian businesses. And we understand that as an SMB you have to be very careful with added expenses. Our instant settlement feature provides value for money as its benefits outweigh the cost. Offering a real-time settlements feature is rooted in this thesis as we understand how important liquidity is for businesses. Here are some of the benefits of real-time settlements from a business standpoint:

  • Better liquidity: For SMBs, having the freedom to use their hard-earned money as soon as customers pay, is hands-down the best feature a payment gateway can offer. With real-time settlements, Paytm Payment Gateway ensures you have this freedom at your fingertips. Businesses using this feature don’t have to wait for the money to come to their account to fill their inventory or make timely payments to employees and vendors. Real-time settlements will ensure you don’t fall short on working capital needs
  • Reduce reliance on short-term loans: Liquidity crunch can force businesses to take short-term loans. The interest on these loans puts additional pressure on the bottom line. Having a payment gateway partner that can ensure real-time settlements will take away businesses’ frequent need for short-term loans
  • Smarter growth projections: As a business owner you are always calculating your earnings and expenses to make growth projections or plan new product launches. A little certainty about your bank balance goes a long way to make such projections. With Paytm Payment Gateway’s real-time settlements, you will have a better eye on the budget, which will inadvertently improve the accuracy of yearly business projections
  • Better risk management: When settlements are delayed, chargebacks and refunds become complicated. Businesses may end up processing these from their own balance, even before receiving the payment. In a scenario where the payment fails to come through, the merchant stands to lose the amount twice. Real-time and instant settlements eliminate this risk

Increase your bank balance instantly

If you are tired of waiting for messages from your bank announcing the payment from your customer has been credited to your account, Paytm Payment Gateway’s real-time settlements feature is for you. Go ahead and try it out to see the wonders it can do to your business and your mental peace.

Switch to Paytm Payment Gateway

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