The COVID-19 pandemic brought along financial challenges for many economies and institutions. A major force behind driving the Indian economy, Micro, Small & Medium Enterprises (MSMEs) also faced a setback. During the lockdown, with working from home and minimized contact, the need for digital payments grew in India.
Digital payments were once an option for customers to be exercised, now prove to be a need for them. According to the statistics, around 78% of the respondents of a survey claimed to be using digital payment modes for a minimum of three times a week. Monetary assistance from the government, leveraging UPI and Aadhaar, awareness of contactless payments amongst the citizens increased the transactions through digital payments. Approved AePS transactions increased to 403 million in April 2020, from around 172 million in March 2020 (as per the data from NPCI).
Digital payment is a force for MSME growth. MSMEs benefit from the creation of solid infrastructure for digital payment in the country. This has accelerated the move towards digital payment for a lot of MSMEs. With the emphasis on digital selling during the Covid-19 crisis, for MSMEs to thrive in the competitive world had to adapt to this option too. Becoming a part of the digital payment ecosystem brings along many added advantages for them.
Some of the major benefits include:
- Providing customers with their preferred payment system, hence driving more sales
- Shortening the payment cycles
- Enabling secured transactions
- Exposing a convenient and easy interfaced payment system
- Assist customized payment facilities
- Reduced liabilities, as chances of frauds and human errors are minute
- Launch loyalty schemes of your own
- Provide discounts by partnering with issuers to earn customer satisfaction
MSMEs having a well-established structure for digital payments attract more opportunities and have an edge over their competitors. In research conducted by Instamojo, factors that build value for customers in digital payment technology include:
For MSMEs, integration of business systems with the payment systems offers better solutions and gives leverage to the business resulting in value creation.
Moving forward, MSMEs who are the members of the digital payment system, have more strength to fight COVID-19 consequences, contribute towards economic recovery, and accelerate towards growth.
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