PayUPaisa has launched ‘All-in-One’ payment settlement solution, that attempts to address challenges related to money settlement and help marketplaces achieve higher efficiency by providing better control over fund disbursements mechanisms.
A marketplace or an aggregator sells to buyers from its website and in turn settle money to thousands of sellers for every transaction that happens on its website. However, the payment settlement happens through standard sources of payments like- cash, cheques, NEFT transfers etc. This typically leads to tiring manual reconciliation of large data, tedious dispensing of accurate individual payments to sellers which often leads to delays and there is lack of transparency between both the parties. This creates serious problems for a marketplace when it comes to maintaining account history and running balance for a seller.
How does PayUPaisa’s All-In-One Settlement Solution Works
As per RBI’s mandate, aggregators need to maintain a nodal bank account and settle payments to sellers within T+2 days. There’s a significant operational cost attached to do this. PayUPaisa takes care of nodal account registration and other regulatory requirements for the sellers. This way, marketplaces can cut huge cost on seller on boarding.
For instance, when a buyer buys various products offered by different sellers operating in a marketplace and makes successful transaction on the payments page, a single order ID is generated for the buyer against this transaction and PayUPaisa reconciles the payments for the marketplace at this single order ID level.
However, the settlements and refunds done to individual sellers happen on sub order ID level. (Each seller gets a sub order ID) PayUPaisa APIs then handles the distribution – i.e. the marketplace’s share of transaction i.e. the marketplace commission is segregated by PayUPaisa and is transferred to marketplace’s bank account in T+2 days. (T is defined by the marketplace at the start of the process). On the other hand, PayUPaisa calculates and reconciles the sellers’ share of transaction amount. It also deducts the refund amount for the sellers, who’re eligible for a refund. The final amount is then settled into seller bank accounts within T+2 days. Again, the marketplace defines the value of ‘T’ here. ‘T’ could be the date of transaction, shipment date of order, delivery of order etc.
The service has gone live on UrbanLadder and PayUPaisa claims that using All-In-One’ Payment settlement solution,marketplaces can reduce the operational costs by 85% and add transparency into payment settlements.