Bank transfer modes like NEFT (National Electronic Funds Transfer) and RTGS (Real Time Gross Settlement) have been used for online and offline transactions for more than a decade now. Although new online payment methods have emerged since, many customers and businesses still rely on bank transfers for payments. Typically such businesses handle sales of large ticket sizes and prefer to accept payments via bank transfers to save on the percentage paid towards processing payments. In such cases where bank transfers are used, while functionality of the payment mode is achieved, it can prove to be an efficiency drain for businesses. The manual effort needed to manage bank transfers in terms of verifying the source of payment, validating the payment value, reconciling account receivables etc., can be a major hassle for businesses. Keeping tabs on customers who have made the payment and the ones who have not is both tedious and time consuming. The physical effort of reconciliation while being complex is still manageable if you process only a handful of bank transfers in a day. But imagine the situation if your business were to manage many hundreds of bank transfers in one day – dedicated human resources will need to be hired to simply do the job of reconciliation manually. And, if the your sales were to translate into thousands of transactions a day a large reconciliation team will need to be instituted, leading to a colossal waste of time and resources.
When businesses receive large volumes of bank transfers, they also typically require additional systems or software to manage the reconciliation process. This reconciliation process is quite complicated as it is not directly linked to the collection process which is still handled by banks. Mapping a transaction against a specific payment would still not be simple and straightforward, given the need for two completely different systems to interact with each other. All this leads to poor cash flow management and problems with effectively managing accounts receivables thereby restricting businesses from scaling and growing.
Being in the business of processing payments, we realized that this was a real bottleneck for businesses and decided to tackle the problem. We are delighted to introduce Razorpay Smart Collect, the simplest way to automate bank transfers and payment reconciliation.
Razorpay Smart Collect automates the entire process by allowing businesses to easily generate virtual bank accounts to collect payments via RTGS, NEFT and IMPS. This makes reconciliation easy, convenient and quick, all while saving businesses from massive resource drain in terms of man hours and dollars.
Here is how Razorpay Smart Collect seamlessly automates bank transfers through four simple steps:
- Create a virtual bank account via API or dashboard
- Share the virtual bank account details with the customer, who can then add the account as a beneficiary
- Customer makes the transfer using NEFT/RTGS/IMPS to the virtual bank account
- Payment is received and instant alerts are triggered to the merchant
Watch this video to see how the solution works:
So, what really is the need to create virtual accounts? Well, sharing your actual account number for purposes of receiving a NEFT/RTGS/IMPS payments has many disadvantages, most notably that of reconciliation. This is a tedious task, involving matching the bank reference IDs shared by the customers with those present in your bank statement. Razorpay Smart Collect addresses the issue of payment collection and reconciliation of account receivables through a single platform, by creating virtual accounts that act as easy payment identifiers. The solution can be easily integrated using a few lines of code and is fully manageable through a nifty dashboard.
This is how a typical virtual account number will look:
The custom-built solution is designed to meet several use cases to provide maximum flexibility to businesses. The business use cases we cover in the first version of the solution are:
One time payments – Used in cases where you need accept a single, large payment from a customer via NEFT, RTGS or IMPS. The account can be closed as soon as the payment is received.
Repeat payments – For instances where customers are likely to make repeat payments, dedicated virtual accounts can be created for each customer to easily keep track of every incoming payment.
Campaign based payments – For special events or campaigns, unique virtual accounts for specific campaigns can be created. Thus segregating the incoming payments for maximum control and visibility.
The solution also comes powered with features that ensure complete control and end-to-end visibility of the collection and reconciliation processes. The exclusive feature that come enabled on Razorpay Smart Collect are:
Seamless Refunds – Send out full or partial refunds to customers via Dashboard & API and your customers will receive it directly in their bank accounts.
Custom Account Number – Create account numbers the way you want. Highlight your company name or assign account numbers specific to customer IDs or any other custom field.
Status Tracking – Track status of every transaction and virtual account in real time. Get notified as soon as payment is completed via Dashboard and Webhook.
Smart Reporting – Get actionable insights from Dashboard & Reports using our downloadable reports. Check collections, settlements and much more.