Hands Payments - Image by Alexander Lesnitsky from PixabayIs Zoho Payments about to get even better? Zoho has received a certificate of authorisation from the Reserve Bank of India as an online Payment Aggregator.

Enterprise Times contacted Zoho about the potential update, no significant details were added, but one suspects that this is just for India.

What will Zoho do next?

Zoho already facilitates payments within its platform through integrations with other aggregators such as Stripe, PayPal Verifone, Braintree, CG, Authorize.net and PayTabs. Users are able to leverage these integrations within at least six of its applications: Zoho Billing, Zoho Checkout, Zoho Commerce, Zoho Inventory, Zoho Invoice and Zoho Books.

Becoming an aggregator means that Zoho can set up direct relationships with credit card companies and banks to facilitate payments without having to go through a third party. It seems likely that Zoho will develop the required functionality within India first with one or two banks. Importantly, it already has relationships with several national and international banks through banking integrations with Zoho Books.

Once it has completed its pilot phase, the functionality won’t be able to roll out internationally until it has attained the appropriate authorisation within each region. In the EU, this may become slightly easier following some proposed amendments to the second Payment Service Directive. The key changes that will affect this potential Zoho initiative are that the EU intend –

  • allowing non-bank payment service providers (PSPs) access to all EU payment systems, with appropriate safeguards, and giving them a right to have a bank account;
  • improving the functioning of open banking, especially as regards the performance of data interfaces, removing obstacles to open banking services and consumer control over their data access permissions;
  • merging the legal frameworks applicable to electronic money and payment services.

In the UK, Zoho’s Dutch subsidiary was registered with the FCA through Token.io, though its registration appears to have lapsed. It will be interesting to see if it recommences the process again. In the United States, Zoho’s largest market, the regulatory landscape is more complex with Federal and State legislation to comply with.

Enterprise Times: What does this mean?

If Zoho develops and rolls out the functionality, it will make life much easier for its customers. It will be interesting to see where the greatest adoption is, whether it is B2C or B2B. For B2B, Zoho, in a similar way to Xero, will be able to facilitate payments directly between its customers without having to go through a third party, such as Stripe or Paypal.

Another question is whether it will enable international payments for its customers. The Business Research Company estimates that the payments market size will reach $748.02 billion in 2024 (2023 – $678.42 billion) at a CAGR of 10.3%.

Zoho continues to show innovation for the benefit of its customers. If it does plan to develop a solution, Zoho will aim to deliver the payment solution as securely as possible. Once developed, it will also need to make sure customers use the solution. That might be harder, though it may be able to offer cost savings to customers while still increasing profitability as it will no longer have to pass on charges from the existing aggregators.

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