UPI Payments For Businesses: A Guide

According to RBI, UPI Payments will cross 999.57 million transaction volume in April 2021. Nowadays, accepting UPI payments for businesses is necessary. In this blog, we will give you a detailed overview of how you, as a business owner, can use UPI to facilitate your business transactions.

In one of Cashfree’s previous blogs, we covered the concept of VPA in UPI. It listed out the advantages of UPI infrastructure for customers. In this blog, we will dive deeper into UPI’s wide range of business applications. 

How can you use UPI for your business needs?

UPI for collection

Integrate with a payment gateway that supports UPI flow

To simplify your payment processes, you can integrate with a payment gateway. However, you need to ensure that your payment gateway supports UPI flow. Ideally, this feature should work across web, iOS & Android platforms.

Thereafter, you can accept payments UPI enabled apps like Paytm, Google Pay, PhonePe etc. 

Cashfree offers the widest range of business applications for UPI including UPI Payment gateway, AutoCollect, Cashfree Subscriptions with UPI Autopay (UPI recurring payments) with features like UPI ID Verification, among other features.

UPI Payments For Businesses

Collect in-app UPI payments

Today, customers are swiftly moving towards mobile payments. Chances are, mobile payments will increase in the near future.

Mobile app UPI integration will allow your customers to make UPI payments through their cell phones. In addition to that, the customer experience will improve drastically due to faster checkout experience.

UPI Payments For Businesses

Payment collection via UPI payment link 

Payment links allow businesses to generate a link that can be easily shared with their customer over WhatsApp, email or SMS. 

You can also choose to send a UPI payment link to collect payments.

UPI Payments For Businesses

Collect payments via UPI dynamic QR codes

If we are on the topic of simplifying payments, QR codes definitely deserve a mention!

UPI Quick Response (QR) Code is a graphic code that helps accept payments through UPI. These codes can be static or dynamic.

The static QR code has fixed information. However, the dynamic code is editable by the business for each specific instance. In dynamic code, the payment amount is auto-filled. 

All the customer has to do is scan the dynamic QR code and voila! 

All the payment details are on the screen and this payment can be done instantaneously. 

UPI Payments For Businesses

Offer subscription plans by enabling UPI e-mandate

You can also create subscription plans for your customers and allow your customers to enable auto-debit on their UPI linked bank account. This can be enabled by doing a one time UPI mandate authentication by the user. These payments can be set for weekly, yearly or monthly transactions. 

The customer doesn’t need to worry about the payment schedule and yet never miss a date! 

Create virtual UPI addresses for reconciliation

Remember the P2M- Virtual VPAs we discussed in our blog on VPA in UPI?

Well, they can come in handy when it comes to UPI payments for businesses. Through P2M-V VPAs (Also called virtual UPI IDs), reconciling payments becomes a breeze since each VPA is mapped to a unique user.

Cashfree launches Virtual UPI IDs for easy reconciliation

I hope this section gave you a complete rundown on how you can accept UPI payments for all your business needs.

However, businesses don’t just have to deal with payment collection. They also need a solid payment disbursal system. 

Thankfully, UPI can be used to do payment disbursals and issue refunds to customers as well.

UPI for disbursal

UPI VPA verification

Incorrect bank account details are one of the primary reasons for bank transfer failures. Similarly, in the case of UPI transfers, an invalid VPA may lead to transaction failure. In fact, the amount may get credited to the wrong beneficiary account. 

To avoid such instances, businesses can do UPI VPA verification. 

To validate the VPA in UPI, businesses can make a small amount of transfer (also called a token amount). The verification process will ensure that the name of the account holder is the same as the bank record. Moreover, it will verify if the VPA is valid or not. 

Cashfree allows you to verify the UPI VPA in a matter of minutes!

UPI Payments For Businesses

Automate businesses payment reconciliation

Businesses need to transfer amounts in bulk to other businesses like suppliers, vendors and other partners. Moreover, they need to refund money in several cases. This makes the reconciliation process extremely tedious. 

After all, manual cross-checking can only take us so far.

This is where P2M-Virtual (or Virtual UPI IDs) come to the rescue again. They can help businesses send money in bulk transfer and reconciliation is done automatically through webhooks.

UPI Payments For Businesses

Now, this will give you a very clear idea of WHAT you can do when allowing/making UPI payments.

But, we are yet to cover the HOW.

There are many ways through which you can offer UPI as a payment option to customers. Naturally, the same kind of payment option and platforms is not suited to all.

Once you have decided which payment provider suits you best, the real work begins. You can accept UPI payments by integrating UPI as a payment option on your website. 

Accepting UPI payments on websites

To accept UPI payments, you have to choose a UPI integration. There are different types of UPI integration which results in different checkout flows. 

The checkout flow plays a huge role in whether the customer will end up completing the purchase or not.

So, the UPI integration that you choose should be in line with your budget and your customer’s expectations.

Let’s have a look at the different UPI integrations that you can choose from:

Webflow UPI integration

This is the most popular and economical of UPI integrations. It will allow you to accept UPI payments rather seamlessly.

If you are applying the Webflow UPI integration, your customers will:

  1. Select the item and fill in all the necessary details (like shipping address/delivery instructions)
  2. Select UPI as payment mode and enter their VPA. The VPA is then verified and submitted.
  3. Complete the two-way authentication. The authentication will include the thumb impression/phone passcode and the UPI PIN.

UPI Google Pay integration

The Gpay UPI integration is rather similar to the Webflow UPI integration. However, here the customer enters the mobile number instead of the VPA.

Here, the customer will:

  1. Enter the mobile number
  2. Do the 2-factor authentication 
  3. Complete the payment.

Intent flow UPI integration

This integration offers a frictionless experience to customers because the UPI app is launched automatically.

  1. The user does not need to enter the VPA or amount details as it is auto-filled. 
  2. After the 2 factor authentication, payment is completed. 

UPI SDK Flow integration

If you choose to use the UPI SDK, the customer can make the payment without opening the 3rd party app. This kind of integration is offered by banks like ICICI, Yes Bank, Axis Bank etc. 

  1. Here, the bank will create the VPA for you and customers will pay you on that VPA. You will need to add the UPI SDK to your mobile app/website to allow the UPI transaction.
  2. Most importantly, your customers will not need to redirect to any 3rd party UPI app. Resultantly, your conversion rate increases.

NEW: Cashfree now offers UPI SDK integration as well. Get in touch here

Dynamic QR code

We mentioned the QR code in the section before this one. With a dynamic QR code you can:

  1. Create a tailor-made QR code for each customer. 
  2. The customer opens any UPI app, scans the code and pays.

AutoCollect to collect and reconcile payments

In all of the aforementioned integrations, the merchant has a website or an app. The customer visits the app/site and then starts the payment.

But, what if the business does not have a website? 

Well, in this case, Autocollect can come handy.

We discussed using UPI payments to offer subscription plans by e-mandate. Autocollect makes that a reality. 

Autocollect creates custom VPA aliases for each customer. This way, the payments are very easy to reconcile. 

To learn more about UPI integration, head over to this exhaustive guide!

….but what if you don’t know the UPI ID?

In many cases, the UPI ID of the beneficiary is not known. Here, Cashfree’s Cashgram services come to the rescue. The merchant can choose to give the beneficiary a payment link with a predetermined amount. Thereafter, the customer can choose whichever payment method they want.

Improve success rate of transactions through UPI

If you have read the blog till now, we are sure you understand one thing.

There are a lot of players at work here. Moreover, every transaction requires several steps to complete. 

Naturally, a lot of things can go wrong.

So, how do we ensure that  UPI payments are successful?

Well, here are some tips that might help:

General tips

  • Businesses need to use multiple acquiring banks. This will allow smart/dynamic routing based on availability and performance.
  • As a business owner, you need to be proactive. If any particular UPI app or bank is having issues, inform the customer with advance warning messages.  

Tips specific to Collect Flow:

  • Validate the VPA before initiating the payment. Allow token payment.
  • Include a dynamic UPI QR code. This will ensure that the user doesn’t have to add the amount/VPA.
  • On the website, include UPI QR code so the user doesn’t have to type their VPA. They can just scan the UPI QR Code.
  • Save the VPA of customers that have had successful transactions. This way, they wouldn’t need to add it again.
  • Include a timer that shows the expiry limit of the collect request. This will urge the customer to make the payment faster.
  • You can also utilize the wait page to inform the customer about the next steps (which app they will receive a notification on / they have to enter the UPI PIN etc.).

Tips specific to Intent Flow:

  • Only show efficient apps to your customers. You can choose to blacklist apps that are unreliable or have very low transaction success rates.
  • Consider implementing Intent Flow for mobile apps as it has a higher success rate.

We hope that this guide has been helpful to you.

To know more about UPI payments for businesses, head over to the Cashfree Payments Stack For Businesses.

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