4 Digital Marketing Tips to Boost Your Online Presence and Sales

As a retailer who has borne the brunt of the pandemic, you already know your business needs a strong online presence that can boost brand awareness, educate your customers about your offerings and bring in more sales. However, a strong online profile cannot be built in a day. But once it does happen, your business will certainly benefit from it as more customers will be able to discover your brand and connect with it. If you are wondering how to increase your online presence in order to attract customers, here are four tips to get you started.

1. Build an attractive and informative website

Given that the Indian ecommerce market is likely to become worth $200 billion by 2026 and that internet penetration jumped from 4% in 2007 to 52.08% in 2019, you need a website (for starters) to stay relevant as a small business owner. And that website should be easy to use and compelling, so you can stay competitive. The most important strategy to attract customers online is to build a website that offers helpful information, showcases your products neatly, is easy to browse and has a simple shopping process. There are many free website building platforms available these days that don’t require much technical knowledge to get started. Wix, WordPress, Shopify, Gator and Weebly are some good examples of such platforms. Or, you can hire a professional website developer. Also note these pointers:
• The website design should clearly convey your brand image and value and go well with what you sell. The “About Us” page should tell a story on how your brand came to be, so that potential customers can relate with you better and feel the urge to buy.
• Your site should be fast and secure as no shopper will want to spend time on a website that is prone to cyber attacks. The website should have SSL certifications and the URL should start with https://.
• Since most customers are likely to shop using their smartphones, your site should be mobile-responsive or easy to scan and navigate on handheld devices.
• Use attractive images and descriptions of your products on the website to give exhaustive information to the visitor. Use videos wherever necessary.
• Keep the colour combination soothing and use a font style and size that is easy to read.

2. Use WhatsApp Business to connect and interact with customers

The Whatsapp for business app can help you quickly respond to customer queries, automate responses and categorize customers. You can become more efficient when it comes to engaging with your customers, build trust and deliver a superior customer experience. Here’s how you can get started:
• Make sure that WhatsApp for Business is available for your mobile device and in your location
• Choose the number you wish to use and download and install the app
• Open the app and verify the phone number you want to use for your business
• Submit the name of your business and complete the profile
The app will let you do the following:
• In your business profile, mention details like address, website link, email address, and working hours
• You can set customised greeting messages for new customers or those who return after a long time
• Create different labels for different customers and organize them in order to make them easy to find later on
• Create quick replies to commonly asked questions or automate responses in case you are away and will answer later

3. Make the most of social media

Even if you are a small retailer or business owner, you need social media pages to boost your brand visibility and get better leads. However, pick only those that connect you with your target audience and help you meet your business goals. Here are some pointers about the top social channels:

Facebook – With 290 million Indian users, Facebook has a massive reach. After creating a page, mention what your business is about, working hours, achievements, contact information, and upcoming events. The best part is that even if you don’t have a website, you can create a shop section on your Facebook page and start selling. Here’s how it works in brief:
• Click the link showing ‘Add Shop Section’ under your cover photo.
• Read and agree to the merchant policies that elaborate on returns and refunds, product listing, deliveries etc.
• Then add business address, email address and payment processing details. You will then see a ‘Shop Now’ button at the bottom of your cover page.
• Next, describe what all you sell and add items to the shop. Your products will be reviewed to make sure they comply with merchant policies and then appear as listings.
• You can also create collections to organize or categorize different products. Add top products to the Featured Products collection so that they show up right below your Facebook cover image.

Facebook lets you target the right people easily and also create ads with ‘Buy’ buttons to make the shopping process fast and simple. You can also join seller groups for better reach.

Instagram–Boasting 100 million users in India, Instagram is popular among millennials and apt for showcasing premium quality images and videos of your products. This is especially helpful if you sell clothes, decorative items, cosmetics, fashion accessories, toys or furnishings, as visual appeal is very important when you are marketing such products. You can also use hashtags to reach new and potential customers, tag them in relevant posts, and message them directly too.

YouTube–As a small business owner, use this channel to post engaging and informative videos that show how your products can be used. With 265 million active Indian users, YouTube is ideal for increasing your brand awareness and educating your customers.

Always post valuable, informative, and engaging (with images or videos) content on social media. Promote offers, discounts and share positive reviews from customers. You may also increase engagement on your channel by posting interactive content like quizzes, contests etc. .

4. Engage with your customers with email marketing

As a small business owner, email marketing is perfect for gaining more visibility, engaging with customers, and drawing them towards your online or brick and mortar store, even if you have a modest budget. Plus, sending emails is simple, time-saving, and lets you communicate meaningfully with your customers in a one-to-one manner. Here are some tips to hone your email marketing:
• Offer customers a personalised experience by addressing them by their first names, using a conversational tone, talking about products that might interest them, and explaining how your products will solve their problems. If you have collected data about their birthdays or anniversaries, send an email to wish them
• Emails are ideal for announcing new collections, product lines, sales events and in-store discounts or deals. Customers are likely to open such emails and visit your store to make a purchase.
• Send emails on your best-performing or best-selling products and how others are rating them. As a small business owner, you should also share positive reviews to gain customer trust and encourage them to make a purchase.
• Send emails to showcase how you procure or choose your products, how well you stock your store, and why shopping from you is a better option than going elsewhere. Use images or videos wherever possible.

Conclusion

As a retailer, increasing your sales with these online tips will take a bit of time and patience. Make sure that you constantly work towards your end goal. Even if you are new to digital marketing, it is easy to implement these tips from the ground up and build a powerful online presence.

Empowering Women MSMEs in India

Amongst the 6.33 crore Micro, Small and Medium Enterprises (MSMEs) operating in India, only a little over 20% are owned by women. Though this number has increased significantly in the last few years, there is still an ocean of untapped potential where women entrepreneurs are concerned. After all, with lower risk, higher profitability and a more loyal clientele, women entrepreneurs clearly present an attractive business segment.

Part of the reason for this disparity in market presence could be cultural debris: women often face social stigma, a lack of familial support and, sometimes, even ridicule when pursuing entrepreneurial activity. But, there are also several other administrative and infrastructural gaps in the system that are keeping women from starting their own businesses, foremost of which is the rampant lack of awareness on government and private programmes designed to incentivise women-run businesses; only 17% of women entrepreneurs were aware of the financial schemes available to them.

The Indian government has placed a healthy focus on encouraging women to start their own enterprises through numerous new schemes, some of which were introduced even during the current pandemic:

1. The Startup India platform has launched a pan-India entrepreneurship programme for women, known as WING. The programme includes two kinds of workshops: advanced level for existing entrepreneurs and basic level for aspiring entrepreneurs. The basic workshops conduct knowledge sharing exercises on how to pitch ideas and start off one’s entrepreneurial journey, while the advanced workshops are focused on capacity-building trainings.

2. Rashtriya Mahila Kosh, an autonomous body under the patronage of the Ministry of Women and Child Development, has several loans under their schemes to help women create wealth and assets. To encourage new and smaller women-led organisations, one of their schemes gives out loans of up to Rs.10 lakh to organisations with as little as six months’ experience in thrift and credit. There are also other types of loans such as a Gold Credit Scheme and Working Capital Term Loan Scheme.

3. The Stand-up India scheme ensures bank loans between Rs.10 lakh and 1 crore for at least one woman per bank branch in the country. The loans are for greenfield enterprises in the sectors of manufacturing, services or trading. In the case of non-individual enterprises, at least 51% of shares and the controlling stake must be held by a woman.

4. Pradhan Mantri MUDRA Yojana (PMMY) is a scheme launched to encourage entrepreneurial culture and create an ecosystem of growth for micro enterprises. The scheme provides loans up to Rs.10 lakh to non-corporate, non-farm small and micro enterprises. The loans are given by Commercial Banks, RRBs, Small Finance Banks, MFIs and NBFCs.

5. The Trade Related Entrepreneurship Assistance and Development (TREAD) Scheme for Women is an effort by the government that seeks to empower women through credit, training, development and counselling related to trades, products, services et al. This initiative partners with several NGOs for, and covers up to 30% of the project cost as a grant.

These schemes are well-considered and can be truly beneficial, but they aren’t the only ones available to women entrepreneurs. Many private Investors have also shown interest in setting up funds to encourage entrepreneurship amongst women and increase the availability of capital to female entrepreneurs. Access to capital for an early stage MSME is crucial, and with the launch of female-focused funds, as well as the growing presence of women in venture capital and private equity firms, this longstanding barrier is quickly dissolving. Incubator firms are even going beyond financial assistance to encourage women-led enterprises by conducting workshops and recruiting female mentors. These mentors often go far beyond  traditional obligations and help women entrepreneurs conquer hurdles associated with gender roles.

The efforts of the various aforementioned stakeholders have proven effective in getting more women involved in entrepreneurial activity in the MSME sector. However, there is still a long way to go. India ranks number 3 in the world in entrepreneurship gender gap, and only 33 percent of early-stage entrepreneurs in the nation are women[8]. A national analysis on finance and support for women-owned MSMEs is urgently needed to draw up India-specific strategies that can help create a more conducive environment for female entrepreneurs. More effort is required on the parts of both, the government and private players, to disseminate awareness on existing schemes, as well as develop further incentives that propel women towards entrepreneurship.

What is SOLV SCORE and How Does it Help Small Businesses?

Nabin Kumar Ram, Head- Data Analytics

In a country of 1.3 Bn people, nearly 63 Mn+ businesses represent the MSME (Micro, Small, and Medium Enterprises) sector in India and contribute to 30% of the country’s GDP. These MSMEs are integral to keeping the country’s economic engine running and generating employment for millions, both directly and indirectly. Despite the sector’s vast participation in the economy, this sector struggles to fulfil its credit requirement for business growth and is not yet well-serviced by financial institutions.

However, to help MSMEs reeling under the impact of COVID-19, government’s focus on offering significant credit flow to this segment will create enormous opportunity for their growth in coming years. Furthermore, a better and more transparent tax regime through GST along with increasing levels of digitisation played a vital role in establishing digital footprint for such businesses.

Serving MSMEs financial needs through traditional underwriting models bring several challenges for them as banks and financial institutes are highly dependent on assessing creditworthiness and ability to pay, but underestimate their willingness to pay. These institutes focus on their Bureau Score (CIBIL) and a detailed audit mechanism on documentation fulfilment further damages their business finance needs.

While bigger manufacturing firms can mortgage their machineries as collateral against loans, 98% of micro businesses still remain under-served because of unavailability of adequate or any form of collateral.

NBFCs have opened their arms to fill this gap however their collective scale at present is not seeming enough to make a significant repair. That is where the alternative, technology-driven credit scoring and psychometric models can make a huge difference. Using alternate data driven models, SOLV aims  to create a win-win situation with SOLV SCORE for MSMEs struggling to obtain credit and lenders unsure of MSMEs’ ability to repay. Let’s understand how SOLV SCORE works through Arjun’s journey.

Arjun, 21, has a small Kirana shop in the outskirts of Bangalore where he sells basic groceries to local villagers. His father ran this shop for 20 years and Arjun took it over after his father’s demise. Living in the digital era today and being digitally active, he wants to connect with other MSME shopkeepers and grow his business while serving neighbourhood villages and expanding his store to become a midsize retailer. However, given the fact, he has never taken a loan or held a credit card, his Bureau presence in nil. Also, at an age of 21, banks do not feel comfortable considering his loan requirement.

On the other hand, being a very focused and trusted individual based on the feedback from locals, he fulfils the requirement of willingness to pay. He also maintains a joint saving account with his father and puts some reserve money every month for rainy days. This shows his strategic planning behaviour.

With the help of SOLV SCORE, his ability to pay and willingness to pay is measured. Herein, his traditional bank statements and GST can support his ability to repay. However, a big portion of alternate data driven models with sophisticated machine learning and data analytics would help to measure his behavioural aspect on willingness to pay. His litigation attributes like pending court cases, operational attributes relating to his store and services, psychometric assessment through interactive game, data leveraged from Blockchain technologies – the factors deriving SOLV SOCRE – would provide a strong foundation for the new-age credit underwriting models employed by fintech lenders, ensuring faster and much better access to credit for MSMEs located even in smaller cities and towns of India.

Furthermore, being onboarded to the SOLV platform and through strong SOLV SCORE, he would be able to connect with a niche set of MSMEs. With transparent and smooth transactions, his business would grow in almost real time. Sustaining a strong and consistent transactional performance would not only make him best in class on the SOLV platform, it would also open the doors for his business expansion fulfilling his credit needs.

Know more about SOLV, click here.

Even in Crisis, Opportunities Abound for MSMEs

The ongoing COVID-19 pandemic has affected more than 150 countries, destroying lives, stalling economic growth and disrupting international trade & business. The Micro, Small and Medium Enterprises (MSME) sector in India has been one of the worst-hit in this calamity. This sector is ~64 Mn strong, many of which are in semi-rural or rural areas and employs close to 120 million people.

With the Government’s ‘Atmanirbhar Bharat’ initiative and support to the MSME sector with manufacturing and import substitution sops, opportunities are galore for businesses of all sizes to flourish.

Reducing import dependency on China
The call for a self-reliant Bharat and the stress on being “vocal for local” has opened up the possibilities for a larger demand for locally manufactured goods. The intention to reduce import dependency on China and the need to diversify our supply chains, coupled with the recent trend of going into manufacturing rather than largely services by MSMEs, signals a sizeable opportunity for seize here, especially in sectors like auto components, iron & steel, pharmaceuticals, textiles, plastic, furniture and toys, where the potential market size for domestic demand is significant. It will likely take a few years to gain the right competencies and for the results to show, but now is the time to make a start!

Renewed focus on solar manufacturing
India’s heavy dependence on China in solar energy, with 80% of the domestic demand for solar cells and modules being met by Chinese imports, received a rude jolt due to the pandemic, when installations were severely disrupted. This has led to renewed focus by the Government on expanding domestic solar manufacturing capacity to ensure energy security for the country. We have so far been manufacturing cells, modules, ingots and wafer, but now we need to go beyond that and also start manufacturing other ancillary equipment like backsheets, glass, inverters, transformers and cables, among others. This will enable us to cater to an entire ecosystem of renewable energy. Exports could form another pillar of this enterprise. GoI is considering setting-up new export hubs focused on renewable energy equipment opening huge opportunities for scale in this segment.

States setting up Manufacturing SEZs
Most states have plans in place to develop new manufacturing SEZs to give the sector a boost. Karnataka, for example, has identified industrially backward districts and tier 2 and 3 towns to develop MSMEs. Relaxations similar to the IT/ITeS industry are being provided to Manufacturing SEZs, to encourage manufacturing exports.

Digitization of MSMEs – Cloud and SaaS-based business processes
Adoption of technology will be a key factor in ensuring MSMEs’ future success and open up new vistas of growth for them. The pandemic has accelerated the adoption of digital sales channels and the digitization of MSMEs is a welcome trend that is here to stay. In almost every area of operation, be it book keeping and accounting, taxes, payment receivables and payables, Cloud and SaaS technologies can be leveraged to improve efficiencies and productivity. This is already happening, with many home-grown tech players using SaaS models to ease the business service pains of MSMEs. India was already a leading adopter of FinTech globally; the COVID-19 pandemic is now pushing larger numbers on to this bandwagon and helping them become future-ready.

Adoption of cloud-based technologies will help MSMEs reduce costs, increase information visibility and therefore improve decision making, and enhance worker safety – a critical area for compliance & governance in future especially in context of social distancing, contact tracing and ensuing timely interventions.

Advent of e-marketplaces for MSMEs
B2B e-marketplaces for MSMEs are gaining wider acceptance among buyers and sellers, which have also prompted the Government and the largest bank in India, SBI to enter the space. . It is a watershed moment in India’s B2B e-commerce, similar to the likes of Alibaba’s success story when China went into its manufacturing spree and internet penetration was at historical highs . Many forward-thinking MSMEs are integrating with such e-marketplaces, preferring to have an omni-channel presence in these times of social distancing and contactless, digital transactions.

The benefits that MSMEs reap from using these e-marketplaces are diverse –connecting with large networks of customers and suppliers, financing and business processes automation, and establishing a credible digital footprint; enablers for MSMEs to become future-ready.

Developing partnerships and local networks
There is a strong need to develop localized services and local networks across the country to enable the Government to expand economic hubs beyond tier 1 cities. MSMEs have an opportunity to actively shape this through forging partnerships with big players – including foreign entities looking to set-up low-cost manufacturing bases and pay a premium for hyperlocal data and specific knowledge of micro markets that MSMEs possess.

The next phase of growth for India will clearly be defined by MSMEs that stay abreast of trends and are willing to reimagine their businesses and evolve.

Digital Marketing: 5 Simple Steps to Increase Visibility & Connect with Retail Customers

By Pankaj Nawani – Product Head

One of the best managers I have ever worked with, a man who is credited with creating a powerhouse financial services firm from virtually nothing was very fond of a particular quote- “Small strokes fell great oaks”. Big outcomes do not necessarily come from seemingly big actions. More often than not they are a result of repeatedly doing small things right. And these words are true for the digital future of our small businesses too.

Due to the recent COVID-19 lockdown my mother-in-law, has been stuck in Pune (where I live) for the past few months. Not knowing local shopkeepers and chemists, she found a nearby pharmacy on Google for her monthly supply of medicines and since then gets them delivered by the store on time every single month. Since the supply was regular and there were no complaints, I never gave the arrangement a second thought, till yesterday when I saw that the pharmacy, she ordered from is nearly 6 km away from our home! I was surprised that the search skipped 20 other pharmacies enroute! How did this happen and was it a one off? I made some enquiries with other people and found that this particular pharmacy makes at least 2 deliveries to our housing society every day. With an average order value of Rs 3000 per delivery, the pharmacy is earning at least Rs.2 lakh per month from one housing society alone. Astonishingly, he doesn’t play the price game either to woo his customers! Then what accounts for his popularity? Here are the reasons –

1. Understand search marketing & how you rank on it: Most small business owners do not understand search marketing. Their view is that being listed on Google with their phone number alone should suffice. It doesn’t work that way. You have to make sure that your listing is 100% (working phone numbers, photos of your store, correct location etc). Most business owners do this listing as a one-time exercise and don’t update.

2. Have a social media presence for your business. What’s seen is what’s sold: You might think having a small website, Facebook page or a twitter account is a fad, but your customer is present on these platforms and so should you. It helps your customers remain in touch, establish credibility for your business and also helps you build more authority. Put simply the more you are present online, the more you’re searched & talked about by your customers, the better your chances of discovery on a Google search wrt. your competition.

3. Invest in a CRM system. Don’t ask the customer the same question twice: Who is your customer, what does she order and what is her desired frequency of delivery. It will help you not only be in constant touch but also cut down the cost of doing business. It does not take much to update your simple excel worksheet and set reminders on the same. There are shopkeepers who do this on nothing more than pen and paper. While the age-old system works, your customer’s behaviour is changing towards expecting flawless service at the click of a button, your business should adapt quickly to the change.

4. Customer Testimonials are important. Actively seek them out: In today’s world nothing gives more legitimacy to your business than customer testimonials and ratings. This is something that you need to be actively promoting. Make it your goal to get a couple of good testimonials per week. Conversely be very aware of negative comments on your business. Do everything you can to make sure that the customer complaint/feedback is not only addressed but also seen to be addressed. Your reputation is very important. Enhance it and guard it with all you have.

5. Create interesting content: No matter how boring you think your business is, there are always things that customers don’t know about your product and which if told to them, is likely to be appreciated. Put that content out, gather feedback and improve. I still recall how a juice seller showed me how to peel a pomegranate and pick the right watermelon. It’s been 12 years since then and I still remember him fondly. Make your trade knowledge more accessible to your customers and they will appreciate it. Repeat the process and over time you will have a repository which will put you far ahead of your competition.

History of Indian Handloom

The beauty and variety of Indian handloom is legendary. The texture and colour with the most intricate of woven patterns and embroidery can leave most anyone spellbound. As we celebrate India’s rich history of handlooms on National Handloom Day (August 7), let’s take a look at the checkered history of this celebrated craft that is still standing strong in the face of many challenges and delighting textile aficionados the world over.

Archaeological evidence traces the beginning of handloom in the Indian sub-continent back to the Indus Valley Civilization. Subsequent Aryan settlers in the region also adopted and further honed techniques of weaving cotton and wool followed by embellishing these fabrics with dyes and embroidery. Spinning, weaving, dyeing and other textile related artforms gave rise to a flourishing cottage industry. The Indian handloom industry while being driven at a household level also found growing adoption across the world. Indian cotton and muslin fabrics were traded with the Roman Empire and Indian silk traded through China via the Silk Route to western countries. Indian textiles have been praised in several accounts by explorers and historians, from Megasthenes and Herodotus to Marco Polo.

The advent of the Mughal empire saw weavers getting patronage from the royalty and creation of new fabrics such as ‘Mulmul’, ‘Benarsi Brocade’, ‘Jamawar’ etc. As the Mughal empire expanded its boundaries, so did the Indian handloom industry with weavers from Kashmir and Persia contributing their share.  Demand for Indian textiles grew by leaps and bounds as the world marveled at the mastery of Indian weavers. India was manufacturing 25% of the world’s textiles in the 17th century, Bengal accounted for more than 50% of textiles and 80% of silks imported by the Dutch from Asia.

The arrival of the East India Company, however sounded the death knell for the Indian textile industry.  The weavers were forced into selling exclusively to the British at extremely low rates, pushing them into poverty. The taxation structure also benefited textile imports into India from Britain versus Indian exports. The decline was further accelerated by the industrial revolution. Advances in manufacturing technologies flooded markets in India and abroad with cheap, mass produced fabrics that Indian handlooms could no longer compete with.

The freedom struggle brought the Indian handloom sector back to the fore, with Mahatma Gandhi spearheading the Swadeshi cause. In no other nation has something as basic as one’s clothing or an act as simple as spinning cotton become so intertwined with a national movement. The humble charka (spinning wheel) and khadi became a dominant symbol of self-reliance, self-determination and nationalist pride.

Post-independence, the Government of India took several steps to revive the handloom sector. Parliament of India passed the Khadi and Other Handloom Industries Development Act in 1953. The All India Handloom Fabrics Marketing Cooperative Society was set up in 1955 to promote sales of fabrics made in handloom cooperatives. Several other institutions were also set up like the Weavers’ Service Centre, the Indian Institute of Handloom Technology and the National Handloom Development Corporation (NHDC), to name a few. The credit for the revival of handlooms in India also goes to pioneering individuals like Suraiya Hasan Bose, Pupul Jayakar and Laila Tyabji.  Designers like Ritu Kumar, Sabyasachi, Sanjay Garg and others have also given much needed exposure to handloom weaves not just in India but across the world.

The Indian handloom industry today employs over 4.5 million people, both directly and indirectly, and is the second largest employer for rural India next only to agriculture. There are about 2.4 million looms of different kinds. The export of handloom products from India was valued at US$ 343.69 million in FY19. In FY19, the US was the major importer of Indian handloom products, with an estimated purchase of US$ 93.94 million, followed by the UK, Italy and Germany at US$ 17.77 million, US$ 16.47 and US$ 14.65 million, respectively. Nearly 15 per cent of cloth production in India is from the handloom sector. Production of hand-woven fabric from India constitutes 95 per cent of the global production. While the numbers seem impressive, the handloom sector is still plagued by problems. Low wages, rising costs, rise in power looms and proliferation of fakes are some of the issues that weavers have to contend with. New initiatives by the Textiles Ministry along with private entrepreneurship will hopefully help the Indian handloom industry regain its prominence.

 

SOURCES: https://www.ibef.org/exports/handloom-industry-india.aspx

Time to Go Beyond UPI and help Digital Transactions Grow with UPI 2.0

By Nitin Mittal

UPI 2.0 has the potential to accelerate and drive change at a much faster rate. The challenge that NPCI has taken to expand the service beyond smart phone users to the 500 million-strong feature phone users in India, will help new avenues openup for industries like E-commerce, Travel & Hospitality, Health-care and in particular the Micro-merchant& Retailer segments across the country.

India’s focused on-ground implementation of the Aadhaar program paired with Jan Dhan Yojana is a massive asset which has doubled India’s banked population to 80% by 2017, starting from 2011. Bolstering this powerful mix is theUnified Payments Interface (UPI) introduced byNational Payments Corporation of India (NPCI)in 2016, which allowsfor full-scale interoperability and instant real-time transfer of funds through a mobile number associated with a bank account.

With the COVID-19 pandemic posing unprecedented challenges to micro & small businesses, digitization of payments systems, especially availability of UPI,is proving critical in facilitating immediate access of contactless funds to rural and urban customers alike and helping them buy essentials from merchants. The month of May 2020 alone saw a billion plus UPI transactions and millions of person-to-merchant (P2M) transactions as customers’ inclination to use QR-code based payments rather than cash and cards at retail outletsincreased manifold. This rapidly evolving trend negates the need for erstwhile point-of-sale machines and allows for massive savings in physical distribution, servicing and collection efforts that were previously undertaken by banks.

UPI has proven its worth and benefits. Given the current situation, it is now time to evolve to the next level in this journey and welcome UPI 2.0.

UPI 2.0 has the potential to accelerate and drive change at a much faster rate. The challenge that NPCI has taken to expand the service beyond smart phone users to the 500 million-strong feature phone users in India, will help new avenues openup for industries like E-commerce, Travel & Hospitality, Health-care and in particular the Micro-merchant& Retailer segments across the country.

In 2019, the Central Board of Direct Taxes (CBDT) issued a notification which ordered companies with a turnover of more than ₹50 crore to include the Unified Payments Interface (UPI) and RuPay debit cards as payment methods. It was a firm step ahead in bolstering digital payments in India.A lacuna in the guidelines, however, was evident in the unavailability of a recurring payments option.The upgraded version of UPI resolves this by allowing for a one-time mandate with block functionality wherein customers can pre-authorize a transaction and paylater on a pre-decided date which could be harnessed by e-commerce players both for B2B and B2C transactions for payment on successful delivery.

Individual users and small merchants will benefit tremendously from these features, as mandates are generated instantly, and payments get deducted automatically on the authorized date creating a ‘pay-later’ feature of sorts for the customer.

So far, users were able to link their savings and current accounts to UPI. UPI 2.0 allows users to access their overdraft accounts, offering need-based, short-term credit facilities with the transaction limit also now doubled to INR 2 lakh.To reduce the physical collection efforts of the BFSI industry, UPI 2.0 can add a significant push to the digital collection of small-ticket loans by running cyclical processes for collection request generation. Auto-generated EMI statements with collection requests can be sent for customers’ verification, post which the customer can authorize the transaction for instant EMI repayment.

Interestingly, the new UPI 2.0 also features additional security for customers. The upgraded construct allows for the dispatch of online invoice to the customer from the merchant, hence transferring the power of ‘verification of order & amount’ to the customer before paying the merchant. Also, to improve authenticity of transactions and merchants registered with the UPI ecosystem, customers can check the authenticity of merchants while scanning the merchant’s QR code, limiting the possibility of fraudulent transactions.Digital invoicing at micro-level will also allow for aggregation and analysis of data at merchant level and provide invoice financing solutions.

With the COVID-19 ‘new normal’ here to stay and innovative solutions like UPI set to be launched on feature phones, India will move closer to its 100% financial inclusion dream and accelerate the growth of thousands of micro-entrepreneurs across the country.

There is evident need to fast-track the adoption of UPI 2.0. As of now, UPI 2.0’s certification is still underway, and PSPs are yet to implement it. Considering the fast-paced nature of technology development and the importance of a robust & novel payment system like UPI especially for micro and small merchants, the government must facilitate a faster rollout of technical specifications with stakeholders like NPCI, PSPs and banks and accelerate the implementation, reach and adoption of UPI 2.0.

Article first published on: https://bfsi.economictimes.indiatimes.com/blog/time-to-go-beyond-upi-and-help-digital-transactions-grow-with-upi-2-0/4388