Key Benefits Of Implementing A Merchant Management System

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Banks and financial institutions today have access to a multitude of solutions for managing the merchant acquisition ecosystem. Each acquiring that the banks enable as service offerings to its merchants require the banks to onboard and integrate the merchant for enabling the same. This also brings about an overhead for merchants to manage such integration and banks to manage merchant settlements and payouts. To help banks adapt and prosper in this multi-channel world, merchant management solutions are a great option.

Through the use of a merchant management system, merchant acquirers can enroll merchants, manage fees, track terminal inventory, assess risks and generate merchant statements quickly and easily. It seems strange, then, that acquirers aren’t jumping at the opportunity to put merchant management systems in place.

Using merchant management systems, acquirers will be able to enroll merchants onboard, manage their feed, track terminal inventory, and also generate merchant statements within no time. Acquirers are pretty excited at the possibility merchant management systems bring to the table. Even so, many systems on the market aren’t yet fitting the bill. Acquirers are still using legacy systems and in house programmes, having poor flexibility and restricted scope for real-time development. To grow with growing times requires dynamic development platform realizing the full potential of merchant management. Mindgate is a merchant management solution provider of a highly optimized, open source platform for effectively managing merchants.

Here are a few benefits of implementing an effective merchant management system:

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  1. Multiple acquiring interfaces such as Mobile, Web, Kiosk, POS, PC-POS, API’s, & H2H.
  2. Access to multiple transaction channels viz. HTTPS, SMS, USSD, RFID, NFC, OTA.
  3. Multiple transaction identities such as Mobile Devices, Biometrics, Virtual address, Cards can be used.
  4. It provides access to varied methods of transactions namely Face 2 Face payments, Collect payments, QR payments, Identity Token/National ID payments, Bulk payments, H2H payments.

The Mindgate merchant management solution provides a compound hierarchical organizational structure with pre-defined protocols at various levels such as the country, territory, stores, outlets, departments, terminals and partners. A simple UI can be used to manage all merchant accounts. The system can exchange and synchronize merchant data online and offline. For effective integration of the system with CRM and other portals, it has to be customized for all possibilities. A merchant management system is scalable and adaptable. By grouping individual fees and charges into a tariff plan which represents a pricing model for a product, the plans can eventually be organized into a hierarchy having the characteristic to inherit, change or override specific charges each level. The PGA platform by Mindgate addresses these challenges in a holistic approach. The platform allows banks to onboard all merchants on a single platform and defines the scheme for merchants as well as dynamic routing with merchants settlement and payouts, thereby providing a comprehensive merchant management system.

Corporate Payments And Collections, The Paradigm Shift

corporate payments and collections the paradigm shift

For banks worldwide, payment and collection solution services are an increasingly important source of revenue and driver of loyalty among corporate customers. For corporate offices and SMEs, expectations around the efficiency and convenience of payments are growing really fast, especially after the advancement in the retail segment. For example, an online app makes it possible to complete the purchase of grocery items in a matter of a few minutes whereas it could take days, or even weeks, to complete the paperwork behind procuring menial stationery items for a corporate office. This gap has invited the need to restructure the corporate payment operations. The banks are now investing in newer payment technologies owing to the demand of evolution in the corporate payments landscape.

Present Challenges In The Corporate Payments System

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The corporate payment and collection sector has to overcome several challenges namely fragmented banking products, paper-based and rigid processes, lack of transparency in payments, and overseas transaction, in order to achieve objectives.  Most banks still communicate with corporate clients via separate business lines which results in a relationship based on silos. Silo-based and fragmented processing involves capturing payments data in different forms and databases, leading to errors & discrepancies.

Outdated paper-based payment processes are still widespread in the reconciliation of purchase orders, goods received notes, bank accounts, accounts receivable, accounts payable, and customer contracts. Many of the organizations require manual checks to verify the authenticity of clients. All these physical processes are time-consuming and cost ineffective. Cross-border payments pose a challenge of tracking the transaction and acknowledging the receipt of payment. There is also the risk of entering an incorrect account number and currency evaluation, let alone the cost incurred in this whole process.

Current Trends In Corporate banking

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Matching customer expectations – A rapid shift in retail and consumer market owing to real-time payments, because of the services like UPI and e-wallets, has left the corporate payments far behind. Banks now need to close the gap between corporate expectations and the reality they are currently living. Corporate offices today seek greater speed and efficiency through automation and digitalization. To satisfy this demand, banks are responding with sophisticated banking applications for mobiles and tablets.

24×7 real-time services – Banks’ corporate payment services are developing the ability to empower customers for real-time payment information round the clock. Meaning, services offering up to date payment status, corporate internet banking, tracking and context, all available 24×7.

Ease of International trading – These days, more and more organizations are dealing internationally than ever before. Hence, corporate customers are seeking multi-currency real-time services and other services such as account balances and real-time status updates. In response to this demand, banks are coming up with services such as instant SMS & email alerts with notification on corporate portals.

Mobile banking solutions – One of the areas where the retail segment outmaneuvers corporates has to be mobile payment. Banks are now making corporate mobile solutions available in areas such as reconciliation, cash management, customer administration, trade services, and operational support.

Digitizing financial instruments – Payments via check are the most regular in a business transaction and also one of the last to go digital, until now. The recent regulatory changes have allowed banks to use digitized scans of checks in place of the actual physical instrument.

How Virtual Accounting helps

Virtual accounting is a tool to automate collection and reconciliation. When it comes to account reconciliation, most corporates struggle due to lack of sufficient information resulting in inaccurate cash position and increased day sales outstanding. To deal with this, banks are providing their customers with ‘virtual accounts’. virtual accounts are essentially the “subaccounts” of a main physical bank account held in a Virtual Account Management (VAM) system.  The main account can hold as many virtual accounts as the customer requires, enabling funds to be allocated without the need to segregate them physically. For a current account maintained in a bank’s ledger, a VAM solution mirrors the account into ‘shadow accounts’. Corporates can then open a series of multi-level account hierarchies under this shadow account enabling POBO COBO functions through them.

Mindgate is a corporate payment and collections solution provider for banks and corporates. – Collect by Mindgate is a PCI-DSS (Payment Card Industry Data Security Standard ) certified corporate payment & collections platform, which aggregates the channels, core system, and other payment methods to offer multi-platform & simultaneous presence to the corporates and its customers. e-Collect allows you to accept payments made via a variety of online and offline methods. Using e-Collect, you can create any number of virtual accounts for your customers for transferring funds (via NEFT, RTGS, IMPS, etc.) to an account linked directly to your bank account. A new account can be created for each customer, allowing you to easily track payments made by them, as e-Collect will notify you of each payment made to any of your accounts, thus, handling the complexity of reconciling these payments on your behalf.

India’s UPI: Transforming Banking and payments landscape

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The digital payment landscape in India is undergoing a massive transformation. The past few years have seen a significant exodus to digital payments especially after the strong steps implemented by the government (read: demonetization) in favor of cashless economy. Add to this the ever increasing growth of smartphone users and the sprouting UPI and wallet mobile apps. To quote an instance, the UPI based digital payment app by the govt. of India called BHIM created a world record of sorts when it was downloaded 17 million times within two months of demonetization. Other channels such as IMPS witnessed a steep growth of 97%.

India witnessed an overall digital monetary turnover of around Rs. 3,37,200 Crore in 2018 and is estimated to grow at a CAGR of 17.5%.  This is in spite of the fact that a huge chunk of smartphone users is not yet comfortable using digital modes of transactions such as a digital wallet or a UPI (Unified payment interface) app. Recently, a hugely popular communication app, Whatsapp, entered the digital payment space with elan. With a loyal customer base of more than 230 Million users in India alone, Whatsapp can surely change the UPI dynamics. The availability of cheaper smartphones and easy affordability of the internet in India has led to a further rise in the number of people adopting digital payments, contributing to the growth of UPI. Interoperability, which was deemed as a challenge some time back, is now possible with UPI apps supporting direct bank account transfers without the need of having a UPI app at the recipient’s end.

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The digital payment scene in India is experiencing sharp disruption with the possibility of integrating utility payments into their ecosystems to further drive user engagement. UPI payment has thus become the blue-eyed child of digital payments attracting attention from e-commerce and FinTech players due to its ever-expanding customer base. UPI has tremendously reduced the reliance on hard cash and has also improved the liquidity, thereby boosting financial inclusion.

UPI solution is relevant to all parties. The biggest plus point of the UPI is that the money is directly transferred from bank to bank, unlike the wallets which require a third party app to hold your money. With 70+ banks already operating on UPI platforms such as BHIM and Google Pay, having a transaction volume of nearly 1,67,000 crores, UPI stands a strong contender in transforming the digital payments landscape in India.

On the banking front, with the upgraded version of Unified Payments Interface i.e. UPI 2.0, financial institutions such as banks and lenders are set to get access to a lot more consumer data, which is likely to boost consumer profiling and credit scoring in the future. Experts have commented that the new upgrade which comes with features such as an overdraft credit line through the app, will be useful in flow-based lending.

UPI is a utility that is affordable and relevant so long as user privacy is not compromised. By incorporating UPI payments into the mix, Fintech organizations can open new avenues to support India’s digital ecosphere and boost financial inclusion, transforming India into a truly digital economy. Mindgate is a leading UPI solution provider building new generation payment gateways and mobile-based collections and payments platforms like RTP & UPI.

Why Should Banks Go For An Integrated Payments Hub

Why should Banks go for an Integrated Payments Hub

The payments landscape within banks is often-times complicated due to the many intertwined fragments such as payment type, currency, clearing mechanism etc. which comes as a part of the age old legacy systems. In most cases, banks have to deal with multiple different currencies and instruments since they operate in geographies spread worldwide or are constantly acquiring other banks having their own CSM (Clearing and Settlement Mechanism) and payment infrastructure. Quite evidently then, such an amalgamation of architectures is rightly referred to as the spaghetti architecture!

Common problems of the spaghetti architecture

Common problems of the spaghetti architecture

Of late, banks have been facing the complications that come up with the legacy system and are now increasingly shifting their gaze towards adopting an integrated payments hub. The problems frequently faced by banks are:

✓ Multiple layered payment processes and systems

✓ Dealing with way too many file formats

✓ Less transparency of payments and payment processes

✓ Recurring payment related issues, such as technical breakdowns.

✓ Legacy systems with obsolete enhancements carried on since years.

✓ That all generate dealing with different payment formats generated by ERP, TMS and in-house systems and connecting to banks in a multitude of ways.

✓ Slow payment system implementations and long integration time frames

Overcoming the above prevalent shortcomings and optimizing the existing process, invites the need of an integrated payments hub.

What is an Integrated Payments hub?

What is an Integrated Payments hub?

An integrated payments hub is a flexible platform that enables banks to develop their own payments services that can integrate with multiple systems and channels, essentially breaking down the silos present in legacy structures.

Over the last few years, the concept of integrated payment hubs has been promoted by technology vendors and industry analysts as the leading approach to modernizing banks’ payment infrastructures.

Benefits of Implementing Payment Hubs

Benefits of Implementing Payment Hubs

  • The banks can consolidate all channels such as internet banking, mobile banking, corporate portals, social media, etc. through a single integration layer.
  • New Services can be realized and implemented swiftly across front-end channels.
  • Data from multiple internal systems can be aggregated at the back end. This data can be routed to appropriate payment networks such as Automated Clearing House (ACH) and Real-time Gross Settlement Systems (RTGS). This aggregated data can also be used for analytics.
  • The payment hub solutions can replace the existing legacy platform thereby completely transforming the existing payment processing system.
  • The integration standards of the payment hub create a scalable, flexible and agile integration layer which provides the best efficiency.
  • Increased operational efficiency.
  • Reduction in the bank’s operating expenses (through the reduction in point-to-point connections.)
  • Reduction in the customer’s expenses (through the ability to determine or create the lowest cost payment methods, such as transaction aggregation for batch settlement and real time payment solutions.)
  • Improved payments visibility.
  • Quick payment system implementations and shorter integration time frames
  • Capability to handle the ever-growing volumes of payments.

Mindgate’s integrated payment hub provides the capability of processing any payment on a single platform, irrespective of instrument type, currency, the value of the payment, customer, channel, or transaction type. Its modern architecture delivers core payment processing functionality for each of those scenarios. Payment hubs promote banks into modernized system architecture to make them better positioned for new business demands.