B2B players in India shift to flat rates
In India, direct bank transfers, checks and cash remain popular B2B payment methods, despite their drawbacks, mainly because businesses have not had good alternatives. Because B2B ticket sizes are high and margins are low, payment gateways are not an option due to the high transaction fees and settlement delays that their use entails.
payharp, a two-year-old FinTech, now offers a solution: a flat-rate pricing model. The Company is a payment gateway for National Electronic Funds Transfer (NEFT), Immediate Payment Service (IMPS) and Real-Time Gross Settlement (RTGS) payments with flat and fixed fees per transaction.
“Businesses feel like they are collecting directly from their bank accounts, they get real-time notifications, and they receive the funds the same day – even for some businesses we provide two-hour settlements at no additional cost,” said the founder and CEO of Paysharp. Krishna Kumar Mani said PYMNTS.
Act as a very thin layer between the B2B payer and the payee
This flat-rate solution also saves transaction fees and eliminates reconciliation issues, while offering easy integration and scalability, Mani said.
Businesses either pay a small fixed fee per transaction or they can opt for a fixed monthly fee. In either case, the company does not charge based on the value of the transaction.
“Paysharp is a payment intermediary that acts as a very thin layer between B2B businesses and the end customer who pays businesses,” Mani said. “Paysharp provides a collection solution with automatic reconciliation at the transaction level and seamlessly integrated into their existing system.”
See many opportunities in B2B payments
In India, business-to-consumer (B2C) payment gateways are a huge and growing market, but B2B is not attractive to businesses operating there because pricing is not percentage-based.
“The B2B payment issue, as a serial entrepreneur, which I also faced in my previous startup,” Mani said. “B2B companies need two things: a fixed price and instant settlement. Moreover, they agree with limited payment methods.
Paysharp supports the collection of B2B trade payments via bank transfer. Since many businesses, such as those in the logistics industry, remain largely cash-based, the company is working on a product to collect physical cash by partnering with a bank. He expects the fundraising product to be operational this quarter.
“We see a lot of opportunities in the core B2B payments segment,” said Paysharp’s founder. “Based on demand, we innovate new payment solutions for businesses and the B2B market.”
Paysharp is also exploring solutions such as offering fully split payments at a fixed price, developing an application programming interface for order-level transaction mapping, and acting as a technology service provider for select clients. B2B, as well as other connected banking solutions.
“We work closely with B2B customers and banks and are constantly innovating and improving our products,” Mani said.