Zoho has launched Zoho Payments, a payment solution embedded into its finance applications. Zoho received a certificate of authorisation from the Reserve Bank of India as an online Payment Aggregator in February. It has now completed the work to launch the new solution.
The B2B payments platform is powered by the Bharat Bill Payment System (BBPS) of NPCI Bharat BillPay Limited (NBBL). Unusually, the partnership means that Zoho Payments is powered by a third party rather than developed itself. The BBPS is an integrated bill payment system operating in India. Offering interoperable and accessible bill payment service to customers through a network of agents of registered members as Agent Institutions (AI), enabling multiple payment modes, and providing instant confirmation of payment.
BBPS is also authorised to accept payments from non-resident Indians to an Indian Bank account. The new payment gateway will enable Zoho customers in India to accept payments online.
Sivaramakrishnan Iswaran, Global Head of Finance and Operations BU, Zoho, commented, “At Zoho, we strongly believe that business finance, banking, and payments should work together. Towards this vision, we had launched our ‘Connected Banking’ solution across our finance apps, integrating with leading banks. With the launch of Zoho Payments today, along with B2B payment capabilities, we are able to achieve our goal.
“NBBL’s BBPS standardises invoice presentment and payments, providing multiple payment modes, instant payment confirmations, invoice financing, and a unified platform for invoice transmission and reconciliation. This marks a major advancement in the fintech domain. As a result, we can now offer a more holistic financial management solution for businesses.”
Digital Payments are rising rapidly in India, as they are worldwide. According to the Ministry of Finance, digital payment transactions volume reached a staggering ₹11,660 crores in 2023 from ₹3,134 crores in 2018-19. The growth is due to the widespread adoption of mobile payment mechanisms such as UPI, developed by NPCI. UPI enables inter-bank peer-to-peer and person to merchant payment transactions.
Fully Integrated into the Zoho Tech stack
Zoho Payments is a PCI-DSS level 1 compliant payment solution. It will enable businesses to securely accept payments through UPI, 35+ Net Banking options, as well as credit and debit cards such as Mastercard, VISA and RuPay. Zoho has fully integrated the payments engine into several applications. Thus making the workflow smooth and ensuring that dropout rates are low. The platform also offers high levels of security. It is SSO enabled with the rest of the platform, using SSL encryption for data and supports multi-factor authentication.
Initial integrations include Zoho Books, Zoho Billing, and Zoho Invoice. Though not mentioned in the press release there will also be integrations to Zoho Checkout and Zoho Commerce. With its simple interface, Zoho Payments has been designed to minimise cart abandonments. Cart abandonment in India is high; according to India Marketers, the cart abandonment rate in India is about 51%, though many studies see it as much higher. Anything that simplifies the payment process and allows customers to use their preferred payment method is welcome.
Zoho Payment is already tightly integrated into the Finance and Operations suite. Meaning that customers will not have to integrate a third-party payment platform, which is time-consuming and may require technical support. With SSO, customers can also do everything within a single account. They can also receive the benefits of integrated reporting and a level of fraud management. However, there is little detail around this at the moment. The platform also offers refunds and administrates payment failures, updating relevant business applications to ensure that businesses are aware and can take mitigating actions.
The integration with Zoho Books will enable businesses to exchange invoices with buyers and sellers through the BBPS network. Invoices received by BBPS will be recorded automatically in Zoho Books.
Businesses can also obtain financing for their unpaid invoices from lenders on the Trade Receivables Discounting System (TReDS) platform through the BBPS network. The platform also supports bulk payments with transactions recording the information automatically across the accounting platform. Thus making the process far simpler and with much less manual work.
Pricing
The Early Access program for Zoho Payments has no set-up or maintenance fee. It will be interesting to see if one is introduced later. However, the benefit to Zoho may be the additional revenue from customers using its other applications.
Every transaction has a fee associated with it. Though UPI payments appear to have a 0% fee (except UPI on Rupay Credit Cards and Wallets). All other transactions have a 2% fee per transaction. All transactions are subject to 18% GST.
Transaction fees are deducted before the payment is made into the seller’s bank account. Payments are all received on a daily basis.
Enterprise Times: What does this mean
This announcement has a huge potential, not just in India but also beyond. It will make the Zoho financial and operations applications have greater appeal to Indian businesses. Especially if cart abandonment rates can be reduced and the fraud management capabilities are made clearer.
This also has huge potential outside India as well. Online payments to and from businesses are becoming commonplace. However, the integration between accounting platforms and payment systems is not always seamless. It will be interesting to see who Zoho partners with as it looks to expand this capability worldwide. The platform is still in early access, though, so that rollout is not likely to be until at least 2025. It will be interesting to see where it decides to launch Zoho Payments next.
