Did you ever imagine merely 10 years back that one day you can able to pay your favorite roadside tea stall or Chaiwala with your smartphone? I think you did not. But today, you can pay all your small payments from your mobile within a fraction of second. Be it the guy collecting payments at your monthly Kirana Store or your favorite Chaiwala, they all are happily and gracefully accepting digital cash without any arguments.
The concept of money is changing, we used to believe the paper currencies are the only method of payments. But the adoption of digital currencies has made us think beyond paper currencies. Though this adoption of digital payments or mobile payments in a country like India is not a one day story. Still, digital penetration is not homogenous across the people, regions, and states. The reason behind this is acceptability & accessibility.
Here’s in this article, we will take a glimpse on some best digital payment option especially for the Small Business like Retailers, Unregistered Business, Small Merchants, Shopkeepers, and Freelancers in India. These merchant payment apps or methods are specifically discussed for small vendors like street food stalls, Chaiwala, small Kirana Shops, small shops, or any types of unregistered businesses that do not require the GST Numbers or MSME registration.
Why Digital Payments?
India has the second-highest mobile internet users (After China) and more than 690 million people use the internet today, thanks to low Data Charges from the telecom providers. But most of these data are used to surf the Social Networking sites, rather than more actively making mobile payments.
With the launch of NPCI’s UPI or Unified Payments Interface, India’s Digital Payments are showing massive growth in recent years and are also expected to show the same momentum in the future. The recent pandemic has also completely shattered our behaviors and lifestyle. In the Post-Pandemic era, people may shift more towards digital or contactless cashless payments that we have witnessed during the demonetization of old currencies in 2016.
- Digital transactions are witnessing a growth of more than 383%.
- Bangalore is the most digitized city, followed by Hyderabad, Delhi, Mumbai, and Pune.
- The top three digitalized states in India are, – Karnataka, Maharashtra, and Telangana.
- Mobile wallets have shown impressive growth in the lockdown period, and companies like Jio Money growing by 66%, Amazon Pay by 63%, and Paytm by 43%.
- The top three sectors for Digital Payments are – Utility Bills, Financial Services & Food.
- UPI is the most preferred method of Digital payment with about 46% contribution. Amongst the UPI payments, Google Pay holds more than two-thirds of share in India, followed by PhonePe & Paytm.
- The most important fact is that tier 2 and 3 cities rapidly adopting the digital route for making payments.
Here are some key advantages of digital or cashless payments for small retailers or merchants
- Instant Payment: The payment processing is fast almost on a real-time basis.
- Less Time Consuming: Hassle-free and less time-consuming. You do not have to visit the branch or ATM for cash withdrawal and payment to the retailers.
- Cost-Effective: For small retailers, transaction and fund transfer charges are nil.
- Quick & Easy Setup: Anyone can set up the payment processing app within 5 minutes.
- Less Risky & Secure: No manual Cash handling and carrying which involve very high risks whereas the Digital Payments system is totally risk-free because you only transact with the digitalized form of money.
- Availability: The benefits of Digital Payments Service is available for 24*7 and all the time in a year. Therefore, no headache of Bank Holiday or Strike or Cash Shortages.
- Customer Trust: Digital and contactless payment methods build more trust to the customers. You might also create a recurring payment or EMI facility for the customers.
- Accessibility: Anyone can access the services of the Digital payments system, you just need a Smartphone & internet connection.
- Rewards & Discounts: More rewards & cashback for the merchants or shopkeepers for the Payment made by Debit/Credit Card, QR, or UPI Platform. These kinds of offers available both for the retailers and customers.
What are the various payment methods available for Small Business?
There is numerous way, you can pay, send & receive money digitally, I have already written a detailed article on various digital payments methods in India. You can read the article here
As a small business owner or freelancer, here are the easiest and convenient payment methods, you can adapt to transfer money securely to the bank account.
1. UPI or Unified Payment Interface: UPI is the most innovative & popular payment method launched by NPCI in India. All the popular payment apps like Google Pay, PhonePe, or Paytm are using this method to pay or receive money digitally on a real-time basis. Anyone can digitally send or receive money to any mobile number directly from the bank account. I have already written a detailed article on UPI payments in India and popular apps use the UPI platform to send or receive money digitally. As a business owner, you do not have to register for GST to digitally receive money from the customers.
As of now, 164 banks and 33 third-party apps integrated the UPI payment system in India. Right now, all the payment apps in India use this UPI platform for small value transactions.
Here are the methods, you can receive money using the UPI Payment method
#QR Code: You can display QR code at the business location or store, customers can pay the amount by scanning the QR code on their UPI Payment App and confirming the same MPIN. Most Payment App companies offer QR Code Displayers to the retailers or merchants to display at their business location.
You can also share the QR code via Whatsapp or any other messaging apps if you want to collect payment from someone who is not physically present at the business location. It is very easy to generate QR code from the UPI Apps or Mobile Banking Apps, the code can be directly shareable from the App itself.
You can generate QR Code from any type of UPI Payment App like BHIM, Paytm, PhonePe, Google Pay, or NPCI’s Bharat QR and starts accepting payments via UPI, Cards, Mobile Wallets or NetBanking.
NPCI’s Bharat QR is slightly different than the QR Codes provided by the payments app like Paytm or PhonePe, which I will discuss later in this article.
The government is also considering the mandatory setting up of the QR code-based payment system at all shops in India.
#VPA Id: You can share the VPA or Virtual Payment Address id to the Customers, the customers then initiate payment on their UPI Payment App and authenticate the amount by MPIN. A VPA id is something like [email protected]/AppName. This type of payment method is convenient when the customer and business owners or service providers are not physically present at the same location. You can create multiple VPA id from the different UPI apps available in the Play or App Store, only you have to link an Indian mobile number to the bank account.
#Sharing Mobile Number: Customers also can send money directly to mobile numbers. The UPI apps automatically detect the bank account linked to this mobile number and deposit the money instantly to the bank account.
But always remember to follow the safety tips while using the UPI transaction on mobile.
2. Payment Links: A payment link is also something similar to a Virtual Payment Address, but not a unique number like it. It’s a randomly generated dynamic link. contains the payment information This type of payment method is most suitable for those where the sellers and buyers of the Goods and services are not physically located at the same place. Unlike the VPA id, you can collect payment from the overseas countries by sharing the payment link.
Most of the payment gateway service providers allow you to generate payments link instantly from its dashboard which can be shared by Whatsapp, Email, or any other messaging system.
There are several popular payment gateway service providers available in India that allow the unregistered business owners to create a free account instantly. I have written a detailed article on that, you can read the article here
This type of digital payment option is suitable for freelancers or business owners who require cross-country payments.
3. Sharing Bank Account: This is one of the traditional methods to transfer money between bank accounts. In this method, you have to share bank account details like account number, IFSC Code, Business Name or MMID, etc. The customer will initiate the transaction on their mobile banking app and transfer the amount using IMPS or NEFT/RTGS.
This is not a very convenient digital payment option for the small and unregistered business owners, because it may take time to settle the amount to bank accounts and chances of error or mistake is high.
4. Aadhaar Enabled Payment System(AEPS): It’s a biometric-enabled device, can be attached to a smartphone using a cable. Every bank has its own BHIM Merchant App which requires to activate the device and linked to the merchant’s bank account. The merchant also can use this option to receive payment by fingerprint authentication of customers. You do not need a GST registration number or current account to avail of the device from the bank.
5. Digital Wallet: Mobile Wallet or digital wallet or eWallet is a kind of virtual account with limited features and primarily linked to a mobile number. You can store money in digital form and use it for any online transactions directly from the wallet. I have written some detailed article on mobile wallets, you can read the articles here
- Best eWallet apps in India for Android & iOS users
- A detailed guide on digital payment methods in India
Best Digital Payment Options for Small Business & Unregistered Retailers
Here is the list of some best digital payment options for the Small business & Unregistered retailers in India.
1. Paytm for Business
Paytm is a well-known wallet service providers in India and most downloaded payment app in India today both in Android and iOS App market.
Paytm has a complete business solution for the merchants named as Paytm-All-in-One. You can use Paytm All in One service to accept payment both in Online as well as Offline mode. You can create a free & instant Paytm Business account and accept payments from the customers within a second.
Paytm Business Account provides four types of payment solutions right now, namely All-in-One PG, All-in-One POS, Paytm Sandbox, and All-in-One QR. You can sign up with your existing Paytm wallet linked mobile number for Paytm for Business portal.
Paytm for Business provides a complete digital payment solution for small businesses as well as unregistered retail outlets. For small retail business owners and shopkeepers Paytm All-in-One QR is a must today and you can easily create Paytm Business Account and order All-in-One QR for free.
Paytm Business account provides all the digital payment methods like UPI, Credit or Debit Card, Payment Links, Mobile Wallet to accept payments from the customers. Currently Paytm holds the major market share in India’s mobile wallet segments transaction.
How to create Paytm for Business account and order Paytm All-in-One QR?
- Download Paytm for Business App from Play or App Store or Go to Website.
- Sign up with your existing Paytm account or create a new account.
- After signing in, you need to provide the business details like business name, category, and subcategory. Select the appropriate business details and click on proceed. Please note that your Business Name should be the same as your bank account name.
- On the next page App automatically detect your linked bank account, you may also add a new bank account here. For that, you have to provide the bank account number and IFSC code. All can also change the bank account later from the App dashboard.
- On the next page, All-in-One QR will be generated within 60 seconds, and you can activate it by clicking the link.
- After activating the QR code, you have to provide your business address and business identities like business type, PAN, and name of PAN.
- The Paytm All-in-One QR will be delivered to your address with a manual to link to your bank account.
- If you are a freelancer or a blogger, you can generate Payment Links easily from Paytm for Business Dashboard.
All the payments received via All-in-One QR will be settled to linked bank account without any additional charges.
2. Google Pay for Business
Google Pay is probably the number one UPI Payment App today in India and already captures more than 2/3 of the share of the Indian UPI market in terms of value. The most notable feature of Google Pay App is its simplicity and innovative features that make it the most popular UPI app today.
As an unregistered merchant or small shopkeeper, you can also use Google Pay to manage your business more securely on Google’s network. Google offers Google Pay for Business App to Indian small merchants and shopkeepers to accept payments from more than 80 BHIM UPI app users.
The set up of the app is very simple,- Just download the Google Pay app for Business app from Play Store, sign up with your existing Gmail id, configure it by following a few simple steps, and start receiving payments from the customers. The app does not have any iOS version.
You can use the Business Console to set up the Google Pay API by yourself and integrate it with your Website or Android App to accept payments via UPI. You do not require any GSTIN to integrate Google Pay for Business API on your website. For freelancers or small digital sellers, Google Pay API is one of the best digital payment options to accept payment online from Indian customers.
Google Pay for Business App supports UPI, QR, Phone number, and Tez or Contactless Payments.
Why should shopkeepers and small retailers consider Google Pay for Business App?
- Google Security: Hosted on Google’s secured network which helps to prevent hacking or frauds.
- No Set-Up fee: Business account setup is completely free.
- Easy to activate: Very easy to activate, just need to download the app and follow some steps.
- Support Multi-language: Supports multiple Indian regional languages.
- Instant Credit: No wallet feature. Rewards and cashback will instantly credit to the linked bank account.
- Rewards: Get more rewards and cashback than any other similar types of apps in India.
- Business Handling: User-friendly dashboard to track daily, monthly or yearly transactions.
- More Exposure: Google Business helps your shop to reach out to millions of customers.
3. PhonePe for Business App
PhonePe is one of the top UPI payment cum Money transfer App in India and currently holds 2nd position in UPI Payments’ market share. This Bengaluru based digital payment company has started its operation in 2016 and is now acquired by the eCommerce giant Flipkart.
PhonePe is one of such Fintech company that is known for its many innovations in the Indian Digital Payment sphere. PhonePe probably the fastest money transfer app in India. Today PhonePe is a household name in India today.
PhonePe has recently launched PhonePe ATM, where your nearby Kirana Stores can also dispense cash like any other Bank’s ATM.
Unregistered Business, shopkeepers can also integrate the PhonePe’s innovative digital payment solution, all you need is to download the PhonePe Business or Merchant App. The App has an extremely user-friendly dashboard and many useful features for the merchants.
PhonePe Merchant app supports all types of digital payment methods like BHIM UPI, Rupay, Credit or Debit Card, QR, Wallet, etc. The most important thing of this app is that the customer’s payments will directly be settled into the merchant bank account on a real-time basis, where Paytm for Business App takes 24 hours to settle on Bank Account.
- Best Money Transfer Apps in India – For Domestic & International Fund Transfer
- Top Payment Gateway Service providers in India for Small Business
How to create a PhonePe for Business or Merchant Account?
PhonePe for Business account creation is extremely easy and you can register for yourself within 5 minutes by following few steps. Here are the steps to sign up for the PhonePe for Business Account
- Download PhonePe for Business App for Andriod or iOS.
- You will find two tabs, Sign in and Sign Up.
- Select the Sign-Up tab, Enter your Full Name & Mobile Number and Click on Get OTP.
- Enter OTP and Fill Up the Business Address details or Enter the GPS to autodetect the location.
- After Saving Business Address go to next Page and Fill Up the Business Name and Category, please remember Business should match your bank account name. If it’s an unregistered business, select individual name, or if it is a Proprietorship business, select the Business name accordingly.
- Click the submit button and go to the next page.
- Select the Bank Account where the payments will get settled, the Bank Account must be linked with the same mobile number as the payments will be settled Via UPI payments.
- After selecting the bank account, the phone messaging app will automatically be opened with a pre-composed message. You just have to send the message from the registered mobile number. This process is done to link bank account numbers with PhonePe for UPI payments.
- After completing the above process, you can proceed to the QR code generation.
The payments will get directly settled in Bank Account through UPI on a real-time basis.
4. BharatPe for Merchants
BharatPe for Merchants is one of the leading digital payment service providers for the merchants in India. Head-Quartered in New Delhi, BharatPe is a UPI based Payment app, enables the merchants, retailers, and shopkeepers to accepts payments directly to the bank account without any extra charges. Similar to other Merchant Payment Apps, BharatPe offers Offline QR Payments to the merchant or shopkeepers with instant credit to the bank account.
Recently, BharatPe has launched two new features in its app to minimize the need for touching the smartphone frequently, these features are- Paisa Bolega & BharatPe Balance.
Paisa Bolega is a Voice Alert on transaction features, – the shopkeepers able to hear loud the instant confirmation of payments into the bank account without touching the phone.
BharatPe Balance is a kind of digital ledger, which provides the merchants with the available balance across the deposit, loans, and daily collection on QR.
The registration process of BharatPe is very simple like any other merchant payment apps in India, simply download the app from the Android or iOS App Store, follow the steps like Business Address, Business Category, linking Bank Account, etc. You can generate QR instantly by registering the BharatPe for Business app.
Why should you consider BharatPe for Merchants App?
- Easy and quick registration with instant QR generation.
- One QR code for all types of digital payment methods like BHIM UPI, wallets, etc.
- Zero set up fee and zero settlement charges.
- Up to 7 lacs of Working Capital loan with zero processing fee to meet up the business needs.
- XtraIncome Credit card which will be linked to the Interest A/c.
- BharatSwipe PoS machine with zero MDR for the merchants. BharatSwipe does charge any rental fee like any other PoS machines offered by companies like Paytm, Pine Labs, MSwipe or Jio.
- Invoice management.
5. BHIM SBIPay for Merchants
BHIM SBIPay is the official UPI Payment App for the State Bank of India customers. The BHIM SBIPay App can be used both for the regular SBI consumer as well as for the merchant payments.
If you are a merchant, select the “I’m Merchant” option which you will find in the BHIM SBI Pay Dashboard, fill up the Business Details, and generate the QR code, print it out and paste it at the billing counter. The important feature of this app is that you can toggle between your Regular Consumer and Merchant App without the need for installing a separate app.
The BHIM SBI Pay app is a very popular UPI enabled payment app in India for the SBI customers, but it’s Merchants’ Payment option is not known to many people. The App supports all digital payment methods like BHIM UPI, Wallet, QR Payments, etc. The transaction charges are completely free in SBI Pay UPI App.
SBI also has another dedicated Merchant QR app called Bharat QR Merchant App which is not very popular amongst the customers.
6. Bharat QR for Merchants
Bharat QR is not actually Merchant Payment Apps, it’s a type of QR based Person 2 Merchant (P2M) digital payment solution, launched by the NPCI, in collaboration with Visa, Mastercard, Amex, and Rupay. It’s a newer type of digital payment method in India, that you can find in Bharat QR enabled mobile banking apps like ICICI Bank, Kotak Mobile, HDFC, SBI’s Banking app.
Bharat QR is not the same as BHIM QR which we generally find in different payments apps like Paytm, PhonePe, or Google Pay(Tez). BHIM QR is a UPI enabled P2P or P2M app, requires the Virtual Payment Address(VPA) for completing the transaction, whereas Bharat QR is used mainly for P2M transactions and payment is done via Credit/Debit card or Prepaid card.
Bharat QR is much secured than the UPI enabled QR offered by the popular eWallet companies. Any customer or merchant can register for Bharat QR, only he/she needs a Bank Account, and the bank’s mobile banking app has to be integrated with BQR.
You can accept payments via Bharat QR without set up and transaction fees.
How to get Bharat QR Code for Merchants at your Store?
You can easily register for Bharat QR and accept Bharat QR payments at your store. Just you need to download the BHIM app and following some easy steps.
- Download NPCI’s Official BHIM App for Android or iOS.
- Link your bank account with BHIM App.
- On the BHIM app dashboard, click on the three lines at the top right corner of the App.
4. Click on Generate QR Code.
5. On the Next page, QR code will be generated, you will find the download option at the bottom of the page.
6. Download the QR code, take a print out of the QR and paste it at your shop counter or any other suitable place.
7. The customer has to open the mobile banking app, select the Bharat QR option, scan the QR, and make payment via debit or credit card.
Bharat QR code is an alternative of Point of Sale Swipe machines, it allows customers to use their mobile banking app to make payments through the debit card. The payments take place via IMPS methods and immediately credited to the merchant’s bank account.
The Bharat QR is more secure than Paytm, PhonePe, or any similar UPI apps, because all the transaction processing is done on the customer’s own banking app after capturing the QR. The customer does not have to show any card details like number, CVV, or expiry date, etc. The customer also has to authenticate the OTP before making final payments.
To enable the Bharat QR Merchant App, the retailers or shopkeepers only have to take a print out of Bharat QR code, paste in billing counter, or any suitable place and accept digital payments.
Currently, 29 banks already live on the Bharat QR platform as an issuing bank and 28 banks live on Bharat QR as an Acquirer. (Source Data: NPCI)
For more details on NPCI’s Bharat QR, you can visit here.
Cashless is Future, we never had thought, a cashless digital economy could have been possible in India. But today more than 100 Million people use digital methods of payment at least once in a month and this number is probably more than the population of many countries. The growth is mainly propelled by Rural India, where the adoption of digital payments is more than urban areas. Though we are still far behind many Western and Asian countries.
The digital payment options and merchant payment apps that are discussed above are best for the unregistered business and small vendors for collecting small payments from the customers. Though the list is not final, I will update the list as and when required.
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