Why a Current Account is Crucial for Businesses

current account

Setting up a current account is one of the most important tasks you simply cannot skip while starting your business. It is very crucial for you to keep your business banking operations separate from your personal banking. 

Having a current account for your business helps you keep track of all your expenditure while simplifying your taxation process.

Before we get started, let’s understand what a current account is.

What is a current account

A current account is opened by businessmen, entrepreneurs, and more, who have to make a large number of transactions regularly. 

Since the volume of transactions, as well as the amount per transaction are generally high, no interest can be availed upon the balance. But, a current account helps with deposits, withdrawals, and contra transactions.

You can open a current account in any commercial bank.

Advantages of having a current account

The whole purpose of a current account is to facilitate entrepreneurs and businessmen to carry out their transactions seamlessly, on a day-to-day basis. 

Here are some advantages you could get by having a current account for your business. 

#1 Current account = any number of transactions 

One of the most important advantages of having a current account for your business is that there is no constraint on the number of transactions. You can transact any number of times at whatever frequency you need to. 

Plus, the upper limit for transactions is so high that you don’t have to worry about money movement at all! This enables your business to have maximum fluidity in terms of operations. 

#2 Keep your personal assets from your business

It is of the utmost importance to keep your personal and business assets disjoined.  It is always recommended you have a current account so you can track your cash inflow easily. This gives you a superior way of planning and managing your budgets. You also get a roundup on your expenditure.

Having a clean financial record allows you to organise your data, which can come in handy for taxes and deductions. Great bookkeeping is always a bonus!

#3 Current account makes your operations easy

Delayed transactions can result in unwanted hiccups. A current account is just what you need to keep your business operations running like a well-oiled machine! 

Your day-to-day transactions are carried out effortlessly and proficiently. Without any delays or jam-ups with your operations, you also get benefits like online banking. The speed of your transactions is usually high, which helps you maintain a good rapport with your vendors and customers!

#4 Current account translates to business legitimacy

Sure, we already talked about the importance of keeping your personal and business assets away from each other. But there is more. As a businessperson, you may write cheques or make online transfers to your vendors, partners, and more. It may seem unprofessional when you make payments from your personal account.

This is not entirely a deal breaker, but having a current account in the name of your business allows your payees to feel affirmed about you having a legitimate business.

#5 Reap extra benefits from your current account

Your current account has all sorts of other benefits that you would typically get from your savings account.  Based on your business, your bank will offer you free Demand Drafts, NEFT and RTGS transactions, Pay Orders, and more, other than the unlimited withdrawals and deposits you can make with your current account. 

Now that we have talked about nearly everything current accounts can help you with, let us break it to you. There is a whole lot more you can get with current accounts.

Introducing RazorpayX Current Accounts

What if we told you that you could get all the benefits we mentioned above, and then some more?  Traditional business banking is not the most efficient way to manage finances. And, several Razorpay merchants told us how suboptimal their business banking experience is.

We conducted a survey among 1500+ CxOs and spoke to 400+ merchants to understand their business banking experience.

  • 64% of companies believe their payment service providers are best equipped to solve their payment challenges as opposed to banks
  • 10x as many companies polled believe payment service providers innovate better than banks
  • 36% of businesses believe manual dependency and reconciliation are the biggest challenges in their current money management

During the survey, another significant problem that stood out was automating money movement. Businesses spend lots of time and money to get their financial operations moving without any trouble. And, with RazorpayX, we aim to put a stop with all problems around money movement.

We built RazorpayX Current Accounts to help you kickstart your journey towards an efficient and seamless business banking experience. The RazorpayX ecosystem provides you with effective end-to-end money movement capabilities, giving you real-time insights on your transactions.

Payouts via Dashboard and APIs

If you already have a current account in a bank, you surely know that API integration takes forever. With RazorpayX Current Accounts, you get APIs by default.

Integration takes very little time and you can start making payouts to your vendors, customers, partners, employees, and more, almost instantly. You can also make or queue your payouts using the RazorpayX Dashboard. 

Approval workflow

Although approval workflows are available with banks, they are quite difficult to set up. And once they are set up, changing them is very difficult since it is long and laborious, involving many documents.

With RazorpayX, approval workflows are very smooth, right from setting them up and changing them. All you have to do is raise a request and our Ops team will get them done in no time. 

Smart insights and reports

RazorpayX converts your financial data into information, and information into insights, so that you have a better overview of your money movement.  

  • View financial summaries of your transactions with customers, vendors, employees, etc.
  • Drill down views of transactions at a contact level and a category level
  • Instantly access/download financial reports and summaries of your contacts
  • Get data on real-time transactions that help you make better business decisions

Apps and integrations

This is one among other things that makes RazorpayX Current Accounts truly stand out from banks. RazorpayX comes with its own set of apps that give you value-added benefits.

Your business banking operations will be much smoother with apps like Vendor Payouts, Payout Links, and Payroll With these integrations in place, your current account will be 10x times more efficient than your average current account.

[ Suggested reading: RazorpayX – How Businesses can Simplify Payouts ]

The verdict

The real difference is how RazorpayX Current accounts comes with its own package of everything you could possibly need for smooth money movement. 

RazorpayX is your one-stop virtual CFO that you need to maintain everything in one place and keep your money moving efficiently.

Payout Links: Automate Money Transfers Without Bank Details

The COVID-19 pandemic that unfolded recently has resulted in a significant change in the way transactions are carried out today. While the demand for goods and services is increasing, many e-commerce businesses and online gaming companies are struggling with their manual financial processes to get instant access to their customers’ bank account details for refunds and prize money.

E-commerce is one of the largest online businesses in India today. Granted that most e-commerce businesses accept payments online, over 60% of Indian consumers still prefer CoD (Cash on Delivery) over making an online transaction.

This mode of payment creates a gash in the system for businesses if their customer wants to return their purchase since the business does not have the bank account details of their customer. 

Let’s face it. On average, about 30% of online businesses experience returns. Since CoD facilitates a big chunk of online purchases, this is not a problem that can be overlooked. 

What is RazorpayX Payout Links? 

Payout Links is the easiest and fastest way to disburse funds into your customers’ preferred bank account via IMPS, UPI, NEFT, and RTGS.

What problem does Payout Links solve?

Like we mentioned before, CoD refunds are something that most e-commerce businesses face. The process is manual, not to mention time-consuming. 

Here’s what happens when a customer returns their purchase, opting for a refund.

  1. The business sends out a form or an email which the customer needs to fill out with their bank account details
  2. The business hands the details over to the team responsible for making payouts to complete the refund process
  3. If the customer does not respond to the email or form, an agent from the company reaches out to them via call or email 

So, what’s wrong here?

The first thing that’s happening here is that once the business receives the information sent by their customer, they actually have no way of verifying the validity of their account information. 

Next, the finance team will collate the information and make a one-off payout by uploading the account information on the bank’s portal, or make a bulk payout if there is more than one refund. 

There are multiple iterations for something that can be very straightforward. The business, the finance team, and customer care executives are involved for the refund to take place successfully. This takes up many many hours of manual processing, while this time can be utilised for other important tasks. 

This is why a refund takes 5 to 7 business days, making it difficult for both the business and their customer. 

Can you imagine this entire process carrying through in minutes? That is precisely what Payout Links can do for your business.

How does Payout Links work?

Payout Links helps automate the entire process of making a refund to your customer within minutes. All you have to do is create a Payout Link on your RazorpayX Dashboard by entering your customer details along with the amount that needs to be refunded. You can send the Link to your customer or have RazorpayX send it out. 

Also, if you need to create several Payout Links, you can use APIs to create them in bulk.  Now that your customer gets the Link, the process is done in a blink.

Here’s what happens next.

  1. Your customer opens the Payout Link and verifies themselves via OTP
  2. They enter their preferred account which can be a bank account, or their UPI ID
  3. On successful entry of their account details, they receive their refund almost immediately
  4. Your customer is notified if there is any error with the account details they have provided, so they can re-enter the details or try with a different account

Why make your customer wait for 5 to 7 business days? With Payout Links, you can easily reduce the multiple touchpoints and automate the process, and make the refund in a few minutes! Talk about elevated customer experience!

Bonus: If you have already made a refund using Payout Links to your customer, their account details automatically populate the next time they receive a Payout Link from you. However, they can still add a different account if they choose to. 

Popular use cases

To further help you understand how you can make the most of Payout Links, here are the top use cases.

E-commerce: Like we discussed before, e-commerce companies that don’t have a wallet of their own, or need bank account details to set up a customer account, can make use of Payout Links to make refunds to their customers.

Rental businesses: Most rental businesses take an upfront security deposit for the rental services they provide. And, once the rental period is over, they refund the security deposit to their customers after making internal quality checks. Payout Links works best for this use case.

Online gaming: Gaming companies (and other companies) that offer rewards, cashback, and reimbursements to their customers can use Payout Links to disburse money in real-time, since instant gratification is very important in these cases.

Suggested reading: Money Movement Decoded for Online Gaming Companies

payout links ecommerce cod refunds

Payroll Changes Due to Atmanirbhar Bharat Abhiyaan

Recently, the Atmanirbhar Bharat Abhiyaan package made headlines all across the country. The government announced major steps that will be taken to alleviate some of the impacts of the pandemic on the economy. 

The package involves fiscal policy and relief measures for various industries as the economic ramifications of the pandemic have left no sector untouched.

Read more: Highlights from the Atmanirbhar Package

How does Atmanirbhar prompt payroll changes?

As a part of the relief package, the government also introduced a few measures that will change payroll processing to an extent. Here are the major payroll changes in effect.

  • Reduction in EPF contribution
  • Minimised TDS rates 
  • Changes in Direct Tax (ITR filing deadline)
  • Selection of tax regime (Dual Tax Regime)

payroll changes atmanirbhar razorpay payroll

EPF contribution rate

Under the Atmanirbhar package, the EPF contribution rate of both employer and employee is reduced to 10% from the previous 12%. This is for all categories of businesses that come under the EPF & MP Act, 1952. 

This payroll change is introduced to aid both employers and employees of over 6 lakh businesses manage funds in a slightly relaxed manner.

As a result of the reduction in the EPF contribution rate, employees will have access to higher liquid funds because of higher take-home pay. This also helps lower the liabilities of employers to a certain extent.

This payroll change is applicable for the months of May, June, and July.

Note: The reduced EPF contribution rate is the minimum number for the period mentioned above. However, employers and employees can make higher contributions.

New TDS rates

During the Atmanirbhar package announcement, the government also called forth the new TDS rates. 

According to the announcement, there is a reduction in the tax deducted at source by 25% for all non-salaried payments. Dividend Income, interest on Fixed Deposit, and more fall under the category and the TDS rates are applicable at different levels. 

The new TDS rates have come to effect as of May 14th 2020, and will continue to be applicable for the financial year 2020-21. 

payroll changes atmanirbhar razorpay payroll

ITR filing deadline 

The Atmanirbhar relief package also pushed forward a change in filing Income Tax Returns. 

The government announced that there would be an extension for ITR filing deadline. Earlier, the ITR filing deadline was July 31st 2020, from which the due date is pushed to November 30th 2020. 

The extension in the deadline is a part of the earlier extension made for receiving Form 16 from March 31st 2020 to June 30th 2020. This is to ease some burden on the taxpayers for the financial year.

Tax regime selection (Dual Tax Regime)

Although not a part of the Atmanirbhar package, the Dual Tax Regime has also resulted in payroll changes. The regime brings prevalent changes in the way taxes are calculated from the financial year 2020-21. As opposed to the higher tax slabs with benefits and exemptions, the new tax regime is all about lower tax slabs, but without the benefits and exemptions.

  • The new income tax for employees whose income lies between ₹5 lakh and ₹7.5 lakh is 10% whereas according to the old regime, the income tax is 20%
  • The next slab is for the range between ₹7.5 lakh and ₹10 lakh, where the tax is 15% while the tax is 20% in the old regime
  • Employees with income between ₹ 10 lakh and ₹ 12.5 lakh would pay 20% tax, which is reduced from 30% in the old regime
  • Finally, for income over ₹ 15 lakh, the tax is 30%

Suggested reading: How to Choose the Right Tax Regime

Payroll changes – how to be compliant

Since there are multiple changes in payroll, it is absolutely important for businesses to be compliant. 

If you are dealing with payroll using spreadsheets or an outdated payroll software, it can set you back in more ways than one. Change management is one of the biggest troubles if you have to implement every single one of the payroll changes. This can limit your productivity since payroll processing is laborious and time-consuming. 

Next, your HR team will have to spend long hours every month to keep up. 

If you are wondering how you can manage payroll with minimum impact while being compliant, we have a solution for you.

Opfin is 100% compliant with payroll changes

Opfin is compliant with all the new regulations that have come about as a part of the Atmanirbhar relief package. You don’t have to worry about dealing with compliance ever again! 

It is also compliant with the Dual Tax Regime, allowing employees to choose their preferred regime during the time of their investment declaration for the financial year. 

Employees can see their projected taxes for the year based on their income and regime so that they can make an informed decision keeping their tax liabilities and savings in mind. Further, you completely automate your payroll process without any manual intervention.

Also read: Automate Your Payroll Process With Opfin

Don’t rely on outdated payroll software while you can carry out your payroll operations without any interruptions. Stay up-to-the-minute with changing regulations and compliance with Opfin while it does all the hard work for you.

Money Movement Decoded for Online Gaming Companies

payment solutions for online gaming companies neobanking razorpay

The online gaming industry has seen a rapid expansion in recent years. It owes its growth to many attributes like increased smartphone penetration, accessible data, affordable tech, and the rise of the digital payments user base. 

Lately, we’ve seen the upsurge of several popular online games like PUBG, Fortnite, and more, successfully stirring up the interest of the youth of India. With more and more gamers joining the bandwagon, the demand for online games has increased. 

This has resulted in the outset of many online gaming companies in India. payment solutions for online gaming companies neobanking razorpay

The many forms of online gaming

“Online gaming” has multiple interpretations today. With so many different modes of gameplay, genres, channels, and player formats, the categories of online gaming are diversified.

However, among the most popular categories are freemium games and online real money games.

Freemium games

The word freemium is a fusion of free and premium. Freemium games are free to play, but compel the gamer to unlock features and customisations by paying the company. These types of games have mostly been sought after in recent times.

Online real money games

Online games that gamers play to win real money, which can be transferred to their digital wallets or bank accounts are called online real money games. These games are in high demand and are increasingly getting noticed by gamers.  payment solutions for online gaming companies neobanking razorpay

Online gaming and digital payments

Online games offer a ton of advanced features to be unlocked by gamers. And, Razorpay has already powered digital payments to several online gaming companies. 

Freemium games with in-app purchases are usually powered by Razorpay Payment Gateway, and the games that require month on month payments to unlock special features, typically use Razorpay Subscriptions. 

Let’s see how Razorpay powers online real money gaming companies.

There are two segments of online real money games. 

  1. Pay to play – where the gamer pays the company before playing
  2. Play to win – where the gamer wins money after playing

Play to win games are all the rage right now. Backed by well known VCs like Sequoia, RummyCulture, Dream11, MPL, Howzat, and more are very famous for their play to win games. 

In both these segments, instant gratification carries a lot of weight for these games to be as successful as they are. And that is simply because of the nature of these games. 

A gamer can collect their winnings after completing a game against an opponent. This means, it is not a continuous, cumulative victory, but a timed one. The gamer does not have to accumulate a certain number of points to collect their winnings. This means they might as well collect their winnings after the conclusion of each and every game. 

So, let’s talk about how these online real money gaming companies pay their winners. 

Essentially, rewarding the winner is considered a payout, a customer payout in particular. And, most of the time, there are many problems associated with making payouts traditionally.

  • Gaming companies need to make sure that the payouts are processed within banking hours so that the gamers get their money as early as possible
  • They have to wait out the cooling period after adding each one of the bank account details
  • UPI and IMPS based payouts have a cap on the total number

This is exactly why online gaming companies need a better solution so they can make timely payouts and ensure that the gamers get their winnings instantly. RazorpayX, a neobanking platform, helps with exactly that.

RazorpayX Payouts

Payouts helps automate the process of making payments to the winners, getting rid of manual intervention. 

  • The winners can be paid instantly via IMPS, UPI, without having to worry about bank hours
  • There is no cooling period, companies can make payouts to accounts immediately after adding them
  • No cap on the number of transactions

[ Read more: How to Simplify and Automate Payouts ]

Most online gaming companies do not require the gamer’s bank account details while setting up a gamer profile. So, how can they make sure the winners are awarded?

Again, RazorpayX has a solution.

RazorpayX Payout Links

Payout Links is the easiest and fastest way online gaming companies can disburse funds into the winner’s preferred bank account via IMPS or UPI. 

A Payout Link can be created on the RazorpayX dashboard. If there is a need for multiple Payout Links, APIs can be used. 

Upon sending the Payout Link to the winner, all they have to do is verify themselves via OTP and enter their preferred bank account or UPI ID. On successful entry of their account details, they receive their refund almost immediately. They will also be notified if there is an error with the account details they have provided, so they can re-enter the details or try with a different account.

The verdict – RazorpayX for online gaming

With RazorpayX, gaming companies need not make the winners wait for 5 to 7 business days to collect their winnings.  payment solutions for online gaming companies neobanking razorpay

2020 – The Year for Neobanking in India

RazorpayX - neobanking platform

Banks have been around forever. In India, the history of banking dates way back to 1750 BC. We have traditionally been dependent on banks for all of our financial needs, as individuals as well as businesses. 

Banks have offered us everything that we have required – from current or savings accounts to credit cards, various types of loans and also, insurance and investment plans. But with fintech startups, the dependency on traditional banks for these services is gradually decreasing, especially for businesses.

These new-age banking services providers are commonly known as neobanks. They are using technology to unbundle traditional banks. And how!

Lately, “neobank” has become somewhat of a buzzword in the fintech space. Quite a few neobanking platforms have emerged in the last few years, creating a storm at a global level. The term itself has gained so much momentum because of the media that it has become a hot topic.

Banking has moved forward in leaps in bounds in the past few years. The way businesses and individuals consume financial services has changed significantly ever since neobanking, API banking, and open banking became prominent in 2016. 

It’s no secret that traditional banks are on the front of increased competition from many arcs of the digital world. Neobanks are expanding rapidly, using state-of-the-art tech to win over customers, who demand simpler, faster, and more efficient financial services. In recent years, neobanks have become the next big thing in fintech. 

So, we wanted to bring you a snapshot of how neobanks are on the way to transform financial services globally. RazorpayX neobanking platform - RazorpayX - what is a neobankrazorpayx - neobanking platform

The expansion of neobanking platforms

Fintech startups all over the world, especially in banking and financial services have over 15 million consumers, out of which, over 50% of the consumers are acquired by neobanks. 

The incredible growth opportunity for neobanking platforms is sprouted by their low-cost business model, which has resulted in high adoption by small and medium-sized enterprises, as well as businesses with variable incomes and earnings, and businesses that embrace innovative tech. 

The speed of neobank adoption has intrigued investors, corporates, as well as venture capitalists all over the world. 

[ Read more: Everything You Should Know About Neobanks ]

Neobanking in India 

Globally, neobanks are entirely digitised. But, in India, regulations don’t permit 100% digitised banks. Fintech companies showcasing themselves as neobanks offer services that are built on top of traditional banking services. 

Regulatory framework for neobanks in India

Neobanks in India emerged as a comprehensive aid for banking and financial services, as well as for small and medium-sized businesses. But, RBI’s regulatory policies neither agree nor disagree with the factuality of fully digitised online banks – meaning, in India, neobanks aren’t 100% digital. 

Back in 2018, RBI kicked all forms of cryptocurrency to the curb, with an explanation that crypto transactions would be a threat to security. Also, other tech innovations like online currency and associated banking services appear to have come to a halt. This has put a damper on the tenacity of new business models since regulatory guidelines are muddled. 

However, in August 2019, RBI ushered in a new regulation for the testing of new fintech innovations in a restricted ecosystem, which is motivating for emerging fintech companies. 

Business banking with neobanking platforms

Neobanks have taken business banking to the next level on the grounds of their enormous range of offerings to businesses. 

Usually, businesses have to deal with dreary and dull processes involving payouts and disbursals. These processes take up many hours of manual effort owing to buggy software and complex infra systems. 

Neobanks are supported by the traditional banking infrastructure, and in return, neobanks help sell current accounts. With the partnership, neobanks provide all the benefits of traditional business banking, along with customised reports, flexibility for bulk upload, easier failure identification, scheduling of payouts, and so much more. And, RazorpayX is at the forefront of the banking revolution in India.

With RazorpayX, businesses can

  • Manage their contacts and end-to-end payout operations via powerful APIs
  • Get notified about their payout status and tracking codes through webhooks
  • Make 24*7 payouts, disbursals, and refunds through UPI, NEFT, RTGS, and IMPS
  • Recharge, store or transfer funds to their RazorpayX account for payouts
  • Offer 24*7 instant refunds and payouts to their customers and vendors etc., without any manual intervention
  • View financial summaries of all their transactions and drill down views of transactions at a contact level
  • Instantly access and download financial reports and summaries of their contacts
  • Get complete control and visibility of their finances with real-time summaries, without any help from financial analysts
  • Automate and execute payroll, compliance, and contractor payments with a dual tax regime compliant payroll software

The RazorpayX story

Traditional business banking is not the most efficient way to manage finances. And, several Razorpay merchants told us how suboptimal their business banking experience is. Since we were already spearheading payments, we thought about giving business banking a shot.

We conducted a survey among 1500+ CxOs and spoke to 400+ merchants to understand their business banking experience.

  • 64% of companies believe their payment service providers are best equipped to solve their payment challenges as opposed to banks
  • 10x as many companies polled believe payment service providers innovate better than banks
  • 36% of businesses believe manual dependency and reconciliation are the biggest challenges in their current money management

And so, we started our neobanking journey by creating a whole new platform on which we could build products and integrations. We created an entire API and dashboard payouts platform over a virtual account setup that merchants could use during the early access in 2018. As we scaled, we realised current accounts are the heart of the product to support higher volumes of transactions.  razorpayX dashboard - neobanking platform During our event FTX 2.019, we announced RazorpayX’s expansion into current accounts, payroll, and corporate credit cards. 

We built RazorpayX with Current Accounts in partnership with RBL Bank and included all standard banking services like cheque book, debit card, and accounting statements. For payroll, we acquired Opfin, a payroll and HR management software company, that also manages tax filing and compliance via a unified platform, without having to hire any external vendors.

We wanted to take this platform just a little bit further with Corporate Credit Cards.

We’re partnering with banks and networks to build corporate credit cards from the ground up that offer immense flexibility with limited-time credit period and auto-repayment for businesses. These cards powered by our credit intelligence engine can be used to make payments towards Google Ads, Facebook Ads, AWS, Business Travel, and so much more.

[ Read more: RazorpayX – How We Built a Startup in a Startup ]

The future of banking with RazorpayX

Online real money gaming is a forthcoming industry in India. The key aspect of making a great game that attracts a huge customer base is to ensure the game winners are rewarded, and really fast. The business model is all about providing its customers with instant gratification.

But, relying on netbanking and other manual payment modes are not the best way to go about disbursing the prize money to the winners. RazorpayX has helped companies like Mobile Premier League, RummyCulture, Pokersaints, and many more to transfer winnings immediately, and with ease.

The year for neobanking

There are over 42.5 million small and medium-sized businesses throughout India, constituting nearly 95% of the total industrial units in the country. But, only 47% of these businesses have been able to access tools for payments, disbursals, and other vital processes.

Furthermore, about 23% of SMEs use ERP software and CRMs. This means, there’s a huge market opportunity for neobanks, especially since they have a lot to offer. 

The gig economy of India has over 15 million contract workers and freelancers, who actively boost the growth of startups. And just like SMEs, only about 67% of the gig economy has access to innovative tech that helps with money management. Neobanks can help the gig economy by enabling independent workers with customer management and banking services.

Over the last 3 years, India has seen the rise of neobanks with 811 by Kotak, Yono by SBI, RazorpayX, Open, NiYo, and more. And, these neobanks have been successfully helping SMEs, large enterprises, and the gig economy with billing, cashflow management, disbursals, vendor management, and so much more.

Special Report: The Impact of Lockdown on Digital Payments

covid-19 era of rising fintech

Life during a pandemic is not something we anticipated. With social distancing, these trying times have affected the way we go about our daily lives. While we are still confined to our homes, trying to keep safe from COVID-19, the distress still persists. The pandemic has also devastated businesses across industries, including digital payments.

We analysed the digital payments made before and during the lockdown for our 5th edition of The Era of Rising Fintech report and gathered some noteworthy observations and insights.  

All findings in this report are based on digital payments made on the Razorpay platform during March and April 2020.

Key highlights

  • There was a 180% surge in NGO donation transactions in the past month since the beginning of the lockdown
  • During the lockdown, industries like utilities (bill payments), IT & software, and media & entertainment grew by 73%, 32%, and 25% respectively
  • Industries like logistics, travel, real estate, and food & beverage were hit the hardest as they observed a slump of 87%, 83%, 68%, 54% with closed establishments and cancelled travel plans
  • Mobile wallets exhibited impressive growth in the lockdown period, with Jio Money growing by 66%, Amazon Pay by 63%, and Paytm by 43%
  • In tier 2 and 3 cities, the mobile wallet wave swept over as they continued to witness a massive surge in wallet transactions for bill payments
  • Before the lockdown, UPI at 46%, remained the most preferred payment mode and continued to be so at 43%, 30 days into the lockdown
  • We firmly believe that fintech companies are likely to gain the profound trust of Indian consumers in the months to come
  • With tier 2 and 3 cities rapidly adopting the digital route for making payments, we foresee a gradual rise in digital transactions across industries

Fintech: 2020 and beyond

  • The trade impact for India has been estimated to be $348 million, according to the UN Conference on Trade and Development
  • We believe that the pandemic may boost demand for fintech-related services for consumers and offline businesses
  • We can also anticipate an expansion in various spheres like consumer banking, neobanking, as well as wealth management 
  • Investments in financial technology and opportunities for partnerships are likely to grow manifold as the fintech industry continues to burgeon steadily

 

Upgrade to a Dual Tax Regime Compliant Payroll Software this Financial Year

dual tax regime opfin

Earlier this year, the Finance Ministry of India introduced the dual tax regime, a whole new tax regime to the existing one, bringing in prevalent changes to the way taxes are calculated for employees from the financial year 2020-2021.  

Since the financial year has just begun, businesses need to quickly upgrade to a payroll software that is compliant with the dual tax regime and automate their payroll process.

Let’s talk a little bit about the tax regime.

As opposed to the higher tax slabs with benefits and exemptions, the new tax regime is all about lower tax slabs, but without the benefits and exemptions. The Union Budget 2020 allows employees to choose from the two options.

dual tax regime payroll software

  • The new income tax for employees whose income lies between ₹5 lakh and ₹7.5 lakh is 10% whereas according to the old regime, the income tax is 20%
  • The next slab is for the range between ₹7.5 lakh and ₹10 lakh, where the tax is 15% while the tax is 20% in the old regime
  • Employees with income between ₹ 10 lakh and ₹ 12.5 lakh would pay 20% tax, which is reduced from 30% in the old regime
  • Finally, for income over ₹ 15 lakh, the tax is 30%

The perks of the new income tax regime

Lower taxes

Your employee can take home more money than before under the new tax regime since the taxes are reduced. Meaning, your employee need not exclusively invest in tax saving schemes.

Fewer compliances 

The new tax regime is very straightforward compared to the old regime. Except for NPS, savings interest from the post office, and PPF, benefits, and exemptions are cut off, making the tax filing process much simpler.

Flexible investments 

With the new tax regime, your employee can personalise their investments that provide better fluidity to withdraw their money.

Like we mentioned before, the benefits and exemptions are nearly cut off. HRA (House Rent Allowance), housing loan interest, investments like life insurance, provident fund, etc. (Section 80C investments), medical insurance, education loan interest, savings bank interest, and leave travel allowance are removed.  

What exemptions are still available in the new regime

  • Leave encashment on retirement
  • Scholarship received for education
  • Funds received on VRS up to ₹5 lakh
  • Maturity amount and short term withdrawals from NPS
  • Pension commutations
  • EPF
  • Death, retirement benefits

How to choose between the two income tax regimes

Your employee should consider both the advantages and disadvantages of the new tax regime in comparison with the old one. They should calculate their deductions, income after taxes, and the total tax for their annual income, based on both the regimes. 

This will help them understand what works for them the best. 

How the new income tax regime will impact your payroll 

Payroll compliance is absolutely important, especially when there is a change in regulations. Having an out-of-date payroll software will definitely not help you with change management and will limit your productivity since payroll can be largely time-consuming if done manually. 

Also, let’s not disregard the fact that your HR team will have to spend hours and hours every month to keep step with compliance, whereas they could be contributing to the business. 

If you’re wondering what can help your business minimise impact, let’s introduce Opfin, a payroll software that will put an end to all your payroll processing troubles. 

Opfin is compliant with the dual tax regime. The payroll software allows your employee to choose their preferred regime during the time of their investment declaration for the financial year. 

They can also see their projected taxes for the year based on their income and regime so that they can make an informed decision keeping their tax liabilities and savings in mind. dual tax regime Your employee can then file their declarations and edit them based on their regime. Opfin also recommends a breakup predicated on their salary, so that they’re aware of the benefits of both regimes. 

This helps you completely automate your payroll process without having to worry about the dual tax regime compliance, without any manual intervention.

[ Suggested read: Automate Your Employee Salaries with Opfin ]

Opfin for all your payroll needs

Relying on outdated payroll software will create a big setback for your business.

Opfin will help you carry out your business operations without any interruptions since the software scales itself and helps you stay up-to-the-minute with changing regulations and compliance. 

Decoding Payroll – Why Businesses Should Automate Employee Salaries

RzorpayX opfin payroll software

Payroll is one of the most important financial operations a business carries out, no matter the size of the company. For businesses, it’s crucial to ensure that their employees are being paid without any delays.

Having a smooth, reliable, and error-free payroll process directly reflects upon the morale and the financial stability of the business. 

But, do you trust your payroll process to be the best?

What is payroll?

Payroll is the total amount of fees paid by a company to its employees, contractors, and other workers. It’s an organisation’s biggest disbursement, not to mention, the most time consuming human resource task.

Payroll is typically processed over a specific period of time. Organisations differ in the way they process payroll. While the process is different, they all need to work in a highly organised system, be updated with the latest rules and regulations, and a highly structured plan. 

Why your business needs a payroll software

Payroll processing is long, tedious, and so time consuming that it takes away your efforts from other important business tasks. Processing payroll by yourself means never-ending administrative and tax-related responsibilities.

Plus, you need to be somewhat of an expert in tax law and payroll if you don’t want any run-ins with the IT department. Using a payroll management software will help unscramble the process so you can focus on what’s important. Razorpayx opfin payroll software Businesses end up spending too many hours on manual efforts on payroll processing every single month. A payroll software enables you to spend these hours on something more productive. Processing payroll manually is not simply time consuming, but is prone to human error, too.

You have to take into account salary structure, working hours, overtime, vacation days, etc, making manual calculations as complex as can be. 

What you need in a payroll software

You can find two types of offerings in the market today. 

SaaS tools

There are a few tools available that are mostly focused on effective processing. These tools help with salary disbursal and compliance fees like PF, PT, TDS, and more.

This does not mean your entire payroll is automated, someone still has to oversee the process and the disbursal, while making sure compliance is upheld.

Payroll agencies

Several agencies provide services where you outsource your payroll process. These agencies collect your employee database along with all the details they’ll need to calculate their salaries. They either process it manually or using their inhouse tool.

You’ll need to approve the calculations so that they proceed to pay your compliance You need the best of both offerings to have a fully functioning and automated payroll system. 

Opfin – a payroll software that has decoded payroll processing

If you’re wondering what’s so different about Opfin, let’s break it to you.

Opfin works on a Direct Deposit model in which Opfin processes payroll, as long as you maintain your balance. Think of it like a wallet you deposit your money into using which your payroll is carried out. It’s designed to be highly intuitive and easy to use, that takes away all the redundant steps. 

The upside is, you don’t have to worry about TDS, PF, ESI, and professional taxes, ever again. Plus, your employees are always paid on time! Next, you can pay your contractors and pay TDS automatically. Opfin deals with quarterly filings, form 16s, and 24Q.

Opfin gives more power to your employees by allowing them to claim their reimbursements and tax exemptions on their dashboard, based on which their monthly payroll is adjusted automatically. 

Who is Opfin for

A business should be able to carry out its processes without having to interrupt them for payroll.  Opfin helps you track attendance, time and leave management, along with vendor and contact payments.

So, any business that is looking for a non-intrusive payroll processing, needs Opfin. 

The Types of Payouts and How Businesses Can Simplify Them

Razorpayx payouts

A structured financial management system is the pillar of any well-heeled business strategy. As much as a business would like to focus on great cash inflow, making payouts is also an equally crucial task.

And, leveraging out-of-the-box technology to streamline the process is what every business should do.

Let’s take a step back.

What is a payout?

A payout is a taxable payment made by a business to its stakeholders from the company’s current or retained earnings. In traditional business banking, the methods using which a company can process payouts are IMPS, NEFT, RTGS, and UPI.

What are the different types of payouts?

types of razorpayx payouts

Vendor payouts –  payments made by a business to a vendor (supplier) for the goods or services provided

Partner payouts – a business pays a commission to another business or a contractor for cross-selling products or services

Employee payouts – a business pays its employees for their services

Customer payouts – Cashback, rewards, and refunds made by a business to its customers

Common problems with payouts

Have you ever had to make a crucial payment to your vendor or customer, but you couldn’t process it because of fixed banking hours? Delayed payouts often lead to interrupted service. Not to mention, they’re just embarrassing.

But it can happen more often than not for many reasons.

  • You can only process payouts via NEFT and RTGS, and only within banking hours
  • Uploading contacts in bulk to make a bulk payout is very complicated because of complex file formats
  • There’s a hold-up upon adding a contact for a payout
  • You can’t verify the validity of a bank account before making a payout
  • Limitations on bulk payouts when made via UPI and IMPS
  • A low cap on TPS
  • No easy way to track and identify errors because of complicated and vague error codes
  • Reconciliation can be very difficult in the case of refunds and failed transactions

So, how can this process be made simple so that businesses don’t have to go through these setbacks? 

Let’s introduce to you, RazorpayX Payouts

razorpayx payouts

Imagine solving your payouts problem in just a matter of minutes, and further simplify all of your business banking operations! That’s exactly what RazorpayX Payouts can do for your business.

Whether you’re making a bulk payout or just a one-off, RazorpayX helps you move money seamlessly, without you having to worry about banking hours. RazorpayX Payouts is that one single platform that automates your business banking operations to such an extent that you don’t have to worry about making any manual effort.

How does RazorpayX simplify your payouts process?

  • Make payouts, disbursals, and refunds via UPI, IMPS, RTGS, and NEFT, at any time of the day, instantly
  • No hold-up upon adding a contact; transact immediately
  • Upload any number of contacts in one go, without dealing with confusing file formats
  • Create payouts in bulk via APIs or directly from the dashboard
  • Offer 24*7 instant refunds to your customers and vendors etc., without any manual intervention
  • Add multiple team members with access control and secure payments with 2-factor authentication
  • With intelligent error code mapping, identify errors without any trouble
  • Reconcile refunds and failed payments in ease
  • Track, automate, and accelerate money movements and make impactful business decisions

How to make a payout via RazorpayX?

You can make payouts on RazorpayX in five simple steps.

  1. Signup and activate RazorpayX account
  2. Add funds to your business account
  3. Create contact
  4. Add fund account to the contact
  5. Create payout

What kinds of payouts can RazorpayX handle?

Bulk payouts You can make your payouts in bulk, all at once. Simply upload all your contacts, sit back, and relax. RazorpayX will take care of all your outflow.

Payouts queue – If you need to make a payout and your account is low on funds, RazorpayX will queue your payouts that go over balance, and process your payouts when you add funds to your account.

Scheduled payouts (coming soon) We’re working on helping you schedule your payouts well in advance, so you don’t ever have to worry about delayed payouts.

Payouts, simplified!

Like we said before, making payouts is as important as cash inflow. Never worry about delinquent or delayed payouts ever again! Make fast, effective payouts to your customers, vendors, employees, and partners, and track all forms of money movement with RazorpayX.

What You Need to Know About Banking as a Service (BaaS)

banking as a service BaaS

Banking as a Service (BaaS) is yet another fintech innovation that is enabling bank and fintech collaborations. The tickler is, many of these innovations are confused for another.

We’re here today to clarify what Banking as a Service is and what it isn’t.

The banking sector has gone through somewhat of a metamorphosis in the last few years. With fintech players entering the market, this transformation has become unstoppable. Financial services are changing in a way that they’re creating new products, channels, partnerships, and opportunities. Banking as a Service plays a significant role here, at the core of it all.

What is Banking as a Service?

BaaS is an end-to-end approach that facilitates fintech companies and other third party organisations to connect with a bank’s system employing APIs.  This helps organisations build innovative financial services upon the provider bank’s regulated infrastructure while enabling open banking services. Banking as a service BaaS

How is Banking as a Service different from traditional banking?

To understand this, let’s break down the functions of a bank – holding money, remittance, and payment processing. For banks to support these functionalities, they need to put in a ton of investment and constitute the necessary infrastructure. 

The processes, along with the complex infrastructure, end up creating gridlocks. And these gridlocks are what have created an immense thought and application for fintech companies and non-bank organisations towards building financial services — partnering with banks instead of building these financial services from the ground up.

How does Banking as a Service work?

Banking as a Service allows third party organisations to draw off of the existing banking services through APIs that communicate between banks and third parties. These APIs allow the use of these banking services by fintech companies, programmers and developers, and other non-financial companies.

This allows them to build their own features as a layer on top of the existing banking services.  In simple words,

  1. Fintech company/individual pays to use BaaS
  2. Bank/financial institution which is a BaaS platform opens its APIs 
  3. Fintech company/individual builds innovative financial services using these APIs

Banking as a service BaaS

[ Also read: The New Age Ways of Business Banking ]

What are the factors influencing BaaS?

While fintech is growing and revolutionising the way financial services work today, there are a few key aspects that have led to the emergence of BaaS.

  • Banks are trying to catch up to the speed of fintech companies. Or, banks are partnering with fintech companies to innovate financial services
  • Startups and SMEs are starting to leverage easier and effective business banking
  • The digital transformation and mobile-first approach that has soared over the recent years has played a phenomenal role in influencing BaaS
  • Business architecture of banking is evolving to a much more modern system that is inclusive of newer tech and methodologies
  • Banking regulations have seen an evolution that has further promoted a healthy growth of industrialisation

How do businesses benefit from BaaS?

  • BaaS helps creates new sources of revenue for businesses by enabling cross-selling capabilities because of API driven facilities
  • With BaaS, businesses can compartmentalize business logic and data, and reduce time to build and ship apps
  • Businesses innovate much more by means of capitalizing on APIs of their own, along with third parties
  • Building products and services using API ecosystems can drastically increase Customer base

Banking as a Service vs open banking

The BaaS model is often confused with open banking since both models involve the use of APIs to communicate among banks and fintech companies. But in reality, both models serve completely different objectives. 

Banking as a Service: Businesses integrate complete banking services into their products

Open Banking: Businesses use only data for their products

Industry impact of Banking as a Service

BaaS has created quite a trend in the fintech industry. Many countries around the world have seen a rise in the latest fintech buzzword – neobanks. 

[ Suggested reading: What is a Neobank? Everything You Should Know ]

Neobanks help businesses manage their entire financial operations by providing more transparency and options, along with real-time capabilities. RazorpayX has enabled businesses like Cure.fit, MPL, Dunzo, and more, to make payouts at scale while keeping the costs low.

RazorpayX Current Accounts takes business banking further by including all standard banking services like debit cards, accounting statements, cheque books, and more.   

Many neobanks and challenger banks looking for an alternate source of revenue have also opened their doors for other non-financial companies to use their APIs. 

More than just creating a source of revenue, BaaS has also enabled legacy banks to grow a relationship with emergent as well as fintech giants. This further helps legacy banks to catch up to what some of the fintech companies are doing. 

Xperience the future of banking