Here’s everything you need to know about ONDC and Vansh’s experience on the network.

What is ONDC? Did you hear about it?

ONDC, or Open Network for Digital Commerce, was set up by the Government of India’s Department for Promotion of Industry and Internal Trade. It is a private non-profit company founded in April 2022. It is an open network made of open protocols. Like the Unified Payments Interface (UPI), ONDC allows sellers and buyers to be part of a larger network that can be accessed through their preferred e-commerce applications and platforms. Any seller on a platform registered with ONDC will be visible to buyers across other platforms on ONDC.

The network aims to:

• Enable interoperability through data sharing over all registered platforms to boost inclusivity and healthy competition
• Promote e-commerce on the back of minimal public digital infrastructure
• Be scalable, keeping India’s growing population in mind
• Ensure data localization within India to secure seller and buyer data
• Make digital commerce more accessible to small businesses in any part of the country
• Improve buyer experience and improve decision-making with increased choices and pricing options
• Be conducive to innovation in digital commerce

The network allows local goods and service providers from any segment, like logistics, travel, eateries, groceries, and fashion, to fulfil buyers’ needs quickly and transparently. Take Vansh’s example. When his local buyers place orders, he delivers them the same day. This improves customer satisfaction, as his buyers don’t have to wait for days to get their orders.

ONDC aims to unify all digital commerce platforms and buyers rather than directly competing with them. However, interconnectedness and decentralization can help tackle big players’ monopolization of specific market segments. This will also allow smaller businesses and platforms to get a level playing field in the Indian e-commerce ecosystem.

How to register your business with ONDC?

ONDC is already present in over 270 cities like Delhi, Bengaluru, and Coimbatore and will soon be available in other parts of the country. There is no specific ONDC app currently, but an ONDC website exists. Any business, big or small, can join the ONDC to leverage the power of e-commerce for its growth. Here is the 10-step process for joining the ONDC:

1. Learn more about ONDC and its functioning
2. Choose the role you want to play on the network
3. Fill up and share your participation form
4. Plan the implementation after completing the NP profile form
5. Initiate implementation after completing the onboarding formalities
6.  Start testing the staging
7. Complete verification and certification
8. Complete technological development and compliance to move on to the Pre-Production Environment
9. Meet all the technical, operational, and regulatory compliance checklists to move to the Production Environment
10. Go live

Click here to learn more about the ONDC registration process.

Why get on ONDC? Benefits for sellers and buyers

Technologies enabling e-commerce have completely changed how goods and services are sold and bought. It also creates space for numerous other stakeholders, like e-commerce platforms and payment aggregators, that make doing business and buying much easier and seamless. ONDC allows all these players to interact on an open, decentralized network to make e-commerce more robust in India.

Here are the broader benefits of joining ONDC for sellers and buyers:

• Sellers
  • Take your business online with minimal set-up costs
  • Become visible to more buyers
  • Improve product discovery
  • Lower your cost of doing business even while expanding
  • Get more options for business services like software tools, logistics, packaging, etc.

Let’s build on the earlier example from Vansh’s business. One-day delivery within the same city is a standard expectation today. But what about fulfilling orders from locations other than where your business is situated? Vansh had the foresight to tie up with a logistics partner he found through ONDC. Now, he provides fast and reliable deliveries even outside his city. His buyers can track their orders and get timely alerts, increasing customer trust and loyalty.

• Buyers
  • Discover more sellers and their offerings, increasing choices
  • Get quality products and services with speed through local sellers
  • Better customer experience due to improved service and transparency

Transforming e-commerce in India

ONDC is a big step in addressing the gaps and challenges related to e-commerce models other than those based on an open-network system. As mentioned, it establishes merchant-friendly practices and provides massive opportunities for businesses of all sizes and types to benefit from digital commerce. This allows even the smallest businesses in India’s remotest parts to participate in its e-commerce revolution.

The post ONDC: The Future of Inclusive E-Commerce in India appeared first on PayU Blog.

MSME challenges to accessing credit 

The majority of MSMEs in India are in rural areas, and many are involved in services. They don’t always have assets like offices or equipment. Without proper documentation of proof of business and collateral, it is difficult for MSMEs to get secured loans. MSMEs may also lack a well-established credit history or operating history, making it difficult for banks to gauge their creditworthiness. Their challenges also include meeting strict eligibility criteria, lengthy and cumbersome application processes, and high interest rates.  

Depending on their location, industry, and other granular factors, MSMEs may also face challenges unique to their individual businesses. Traditional banks may cannot usually cater to such specific requirements or disfavor small-ticket loans due to high operational costs and lower returns. This pushes MSMEs to resort to informal credit sources with very high borrowing charges and repayment terms, making them more vulnerable to financial risks. 

Limitations of Traditional Lending 

MSME’s lending challenges are directly related to the limitations of traditional lending structures. Traditional banks need to catch up to MSME’s evolving credit needs and preferences. The major limitations of traditional lending structures are: 

• Lack of flexibility: Whether it is types of credit products or repayment terms, traditional lenders may not have the technological capability to adapt quickly to MSME credit needs. 
• Long loan processing time: Banks typically take a long time to process loans. MSMEs typically have limited time and resources, and delays in getting financing can have a significant impact on their business operations. 
• Lengthy documentation: Traditional lenders usually require hefty paperwork to provide loans, often leaving MSMEs feeling frustrated and disempowered. 

• Lack of transparency: Not providing adequate details about credit products makes it harder for businesses to compare and make informed decisions when looking to borrow. 
• High charges: Charges such as interest rates, processing fees, etc., may be high, as traditional lending processes generally involve high operational costs. 

Imagine this scenario: A small business less than a year or two old with close to no credit history applies for a loan worth 50 lakhs. First, they may not have enough data about the business’s finances or credit history. They may also be unable to provide substantial evidence of the business’s growth potential. Even if this business is eligible for the loan, the bank may take weeks to process the application and release the funds. Thich means crucial time to react to changing market scenarios or urgent business needs is simply lost. 

Advantages of fintech-based MSME lending 

Fintech companies leverage technologies like artificial intelligence, machine learning, and big data analytics to assess credit risk and streamline the lending process. Here’s how fintech lending help overcome the MSME credit gap: 

• Paperless and contactless processes enable quicker loan approval and disbursal times. This even allows MSMEs in remote parts of the country to get fast, reliable credit. 

Suppose you have an MSME based in a far-off village in North East India. It will be much easier for you to get credit from a fintech company as it may have a smooth online onboarding process that includes digital documentation and video KYC. 

• They can develop innovative, easy-to-use, and tailored credit solutions based on MSMEs’ specialized capital needs industries, such as real estate, technology, and healthcare. 
• With fintech lending, you can typically apply for a loan online in just a few minutes and receive a decision within hours or days. This, combined with the lower overhead costs associated with online financing, makes fintech lenders an attractive option for MSMEs looking to access capital quickly. 

• They require minimal documentation, making it easier for small businesses with limited credit and operational history to access credit. 

Fintechs have the ability to provide a more nuanced assessment of your business’s creditworthiness. They use data such as transaction history to predict a business’s future cash flow potential. Using this, they can gauge a business’s financial health and potential for growth and quickly provide small-ticket loans for urgent capital needs. 

• They can identify targeted financing opportunities for MSMEs, helping them fuel their business growth when needed. 
• They can partner with banks to help MSMEs avail of big-ticket loans. 

Banks have wider networks and lending capacity. Fintechs have the technology for alternate credit assessment methods and improved customer experience. By combining their strengths, fintech companies can facilitate the last-mile delivery of lending services to underserved MSMEs. 

• Fintech lending also offers greater transparency and flexibility, with many lenders providing clear information about their loan products, interest rates, and fees. You can easily compare offers and choose the financing option that best meets your business’s unique needs and circumstances. 

Lending-first approach to closing the MSME credit gap India 

Fintech companies that follow a lending-first approach can effectively address the unique challenges associated with MSME lending. It combines crucial factors such as a business’s intent to borrow, credit score, profitability, reach, scalability, and ability to adjust to changing market scenarios. This includes developing innovative credit assessment models that holistically evaluate the credit risk associated with small businesses, streamlining the application process to reduce delays and administrative burdens, and offering transparent, flexible MSME financing options that are more accessible, secure, and fuel their growth. 

The post How Fintechs are Paving the Way for Effective MSME Lending appeared first on PayU Blog.

Small online businesses are becoming popular with the advent of 4G and 5G services at low prices. We’ve got you covered if you want to know how to start an online business and find success when a new trend comes up every day. Let’s look at a step-by-step guide with actionable things to do before you start.

Step 1: Viable Product Idea

A great idea is like a seed, which, when nurtured, gives us the fruit of our labour. Any successful business needs a viable product idea to start. Testing the viability of your service or product is a wise decision before investing your money and time. There will always be some risk in business, but you can reduce the potential risk factor by testing whether your idea is viable. Once you finish this first step, you’ll get answers to most of your questions, like who your target market is, what your competition looks like, etc.

Step 2: Identify Target Market And Their Needs

The next step is to identify your target audience – the people you would sell your product or service to. Identifying the target market is as important as the product. This requires identifying their problems and hence their needs. Most people deal with day-to-day problems for which they look out for direct and functional solutions. Identifying the target audience will also help in marketing your product/service. Market research, competitor analysis, and customer surveys are different ways to identify your audience.

Step 3: Pick A Catchy Name

The next important decision is to pick a name for your product or business. Choosing a name that is available for registration on the web, like a domain name or an Instagram handle, is important. Also, the name you chose should provide a brief idea of your product or business objective. 

Step 4: Decide Where To Sell

With a sharp rise in online businesses in the past years, one has to decide where to sell to grab the attention of prospective customers. You can build your website or join an established marketplace like Amazon, Flipkart, or Myntra. You can also consider a combination of these. A user-friendly website or app helps build a strong image in the minds of your customers.

Step 5: Know Your Competitors

As you aim for a sustainable brand, you must position yourself in the market as unique and different. This can only be done after understanding your competitors. A good analysis helps identify successful tactics, shopping experience, trends, and the need for a shift in the market. This would also help you better position your product and develop competitive strategies for your business. 

Step 6: Market Your Product

A successful marketing strategy will fuel your online business growth and scalability. You can choose between email marketing, content marketing, Instagram, Facebook, YouTube, direct outreach, search engine optimisation (SEO), and influencer marketing. You may need to identify the channels that best suit your product or market.

Step 7: Set Up A Payment Mode

The last step is to decide how you want to get paid! Choose payment gateways to receive payouts for your product or service, keeping in mind the convenience of your customers. Choose from many popular online options like PayU, UPI, credit or debit cards, etc. Securing a payment mode will help in continuous cash flow for your business in the competitive online marketplace.

Also read: 8 Tax Tips For Small Businesses

Conclusion

So, are you ready to start your entrepreneurship journey? Remember, taking the first step is often the hardest. You won’t know the success you can get if you never start. So take your first step towards starting your online business, and the rest will follow.

Frequently Asked Questions

The post How To Start A Small Business Online? | PayU appeared first on PayU Blog.

Tax Tips For Small Businesses 

In this article, we have listed down some tax tips for small businesses that may help them overcome the complexities of taxation and, in this process, save their money. 

• Chalk Out The Expenses 
• Keeping Records 
• Limiting Cash Payments 
• Avoid Late Filing 
• Deduct Travel Expenses And Home Office 
• Depreciation 
• Deducting TDS At source 
• Hire An Accountant 

Chalk Out The Expenses 

For startups and small businesses, the initial kick-start expenditure can be significant, known as preliminary expenses. Preliminary expenses refer to the cost incurred while setting up the business, i.e., acquiring machinery, legal expenses, company incorporation expenses, etc. Initial expenses such as the construction costs and the market survey costs come under the capital expenditure. They can be written off as deductions, according to Section 35D of the Income Tax Act. The preliminary expenses are deducted from the total income in five equal installments over 5 years. 

Keeping Records  

One of the simplest ways to ensure positive tax returns is to keep thorough records throughout the year. Failing to do so may lead to several repercussions, including a possible inquiry or departmental investigation. The records should support the income, tax credit, and deductions shown in your tax return until the period of limitations runs out, i.e., the statutorily stipulated period for which taxpayers have to maintain the books of account. The copies of the filed tax returns must also be kept properly, as they help with future tax returns. A useful way of keeping records is using accounting software that can record all the income and expenses of the business. 

Limiting Cash Payments 

Cash payments seem to be very agreeable most of the time. However, small businesses must be cautious while doing so. Cash payments exceeding Rs. 20,000 in a day, for a single person, may lead to the prohibition of the tax deduction on such expenses. If a particular payment requires you to pay more than the amount, it is recommended to use banking channels but not in cash. Small businesses with unorganized labour require a proper recording of all the cash payments. Failing to do so may result in paying a higher tax payout. However, section 6DD of Income Tax allows some relaxations and lists out some exceptions where the payment exceeding INR 20,000 can be made in cash. 

Avoid Late Filing 

While filing tax returns, time is money. One of the primary benefits of timely filing of income tax returns is to set off present year losses against future income. These losses can be carried forward for a consecutive period of 8 years. This means you can deduct the business losses from the relevant income, which will help reduce the tax liability on the future income. However, this benefit cannot be availed without filing the tax return on or before the due date. Late filing of taxes may lead to a penalty. For small businesses whose income does not exceed Rs. 5 lakh during the financial year, late filing of the taxes would lead to a penalty of Rs. 1000. 

Deduct Travel Expenses And Home Office 

For expenses that help the business grow and sustain, certain deductions are allowed by the Income Tax Provision. For businesses wherein travel is essential, travel fare and accommodation may be shown as business expenses as it is concerned for business purposes only. To cut the costs, small businesses usually use their homes as offices. If that is the case, then the taxpayer can claim a deduction on expenses related to the home office, including rents, repairs, utility bills, depreciation, maintenance bill, and property tax. Section 32 allows the tax deduction for depreciation, and Section 37 allows for the other expenses. 

Depreciation 

Additional benefits are provided to manufacturing businesses. The Income Tax Act allows a tax deduction for the depreciation of machinery. For new machinery purchased in a year, the taxpayer can claim depreciation of 20%, in addition to the normal depreciation. So, for every new machine being put to use, you can claim the regular 15% deduction and an additional 20% for depreciation. This helps recover the cost of the asset over time. These benefits are to encourage capital investments. 

Deducting TDS At Source 

Several transactions mentioned in the Income Tax Act require the buyer to deduct tax at sources, such as payments made to freelance employees or commissions. If the taxpayer fails to deduct this TDS, the whole amount can no longer be added for reductions. This will eventually turn into a tax burden. For example, if the owner pays Rs. 1,00,000 as commissions and fails to deduct the 10% tax, then the whole amount of Rs. 1,00,000 will be inadmissible for tax profits.

Hire An Accountant 

Tax planning is the essential method of reducing the tax burdens. Reading up about the tax policies and rules may just not be enough. To avoid paying a higher amount of taxes, professional help is of utmost importance. Experts will help prepare the account books and help in the computation of the taxes as well. They will help the small business through the complex aspects and provide tactical recommendations that will help businesses reduce the tax liabilities and simultaneously enjoy the benefits of the tax-saving schemes. 

Final Words 

It is crucial to abide by the rules and regulations and pay the necessary taxes. All of these tips will guide small businesses to save this tricky situation. Taxes may scratch out some cash from the pockets of your business; however, with careful study of the Income Tax Act and maintaining proper records of the expenditure, one can easily manage to save maximum. The government also showers with several benefits on the timely submission of the taxes and the tax returns. At PayU, we help people facilitate seamless digital transactions along with facilities to conduct a smooth tax filing. To know more, visit PayU.  

The post 8 Tax Tips For Small Businesses In India appeared first on PayU Blog.

At PayU, our aim is to make it easier for businesses to move online and start accepting payments digitally. And PayU Partner Program is one of the key initiatives we took in this direction.

Catering to more than 3.5L businesses already, we built this program to help more businesses on board this digital journey. Digitization is a win-win for both our merchants and partners and everyone involved, after all.

About PayU Partner Program

PayU Partner program is a referral program through which you can offer our comprehensive range of payment solutions to your clients and customers and get rewarded for the same.

This program is not limited to companies, platforms, implementation, & plugin partners alone. Even developers, designers, bloggers, digital agencies, freelancers, incubators, co-working companies can be a part of our affiliate program and earn rewards on every successful referral. Simply put, any individual or an organization that provides any kind of services to businesses can become a PayU reseller by offering our payment gateway services.

Thousands of companies, including platforms, plugin builders, and extension developers, providing services to small & medium businesses, work with PayU. Some of them include WIX, Shopify, Shopmatic, Zoho, Tally, WordPress, WooCommerce, and many more.

Why Take Part in PayU Partner Program

• Quick, Easy & 100% Digital Onboarding for You and your Merchants – While the sign up is done in 2 easy steps at PayU, our onboarding process in 100% online and hassle-free
• Lucrative Rewards on every Successful Referral – You earn rewards for every transaction made by your referral
• Powerful Dashboard – You can refer and add your merchants, track your earnings, reconcile payments, get real-time updates, access exclusive marketing material and much more from one single platform
• Quick & Easy API Integration – Our APIs are easy to integrate with your digital platforms
• 100+ Payment Options – We support various payment modes such as Credit/Debit Card, Net Banking, UPI, E-Wallets, Paytm, Google Pay, PhonePe, LazyPay, etc.
• Highly Secure – PayU is PCI-DSS compliant which means we adhere to all security standards and practices recommended by the Payments Card Industry
• Dedicated Account Manager – In case you have any queries or suggestions, you can reach out to your dedicated Key Account Manager (KAM). Details of KAM can be accessed through the dashboard. Also, we provide 24*7 assistance through our help portal help.payu.in
• Certified Partner Badge – Enrolment under the Partner program gives you access to Certified PayU Partner Badge. Copy code or download the same from your dashboard

Besides this, PayU Also Has Several Add on Features that Can Help You & Your Merchants Grow:

1. Payment Links: Create and share invoices over SMS, email, WhatsApp, etc and collect payments instantly from your clients
2. EMI – Provide convenience to your customers by giving them the flexibility to pay over-time
3. Payouts: Disburse payments to anyone, anytime using NEFT, IMPS or UPI
4. Same-Day Settlement:  Get money in your account the same day!
5. International Payments Acceptance: Accept payments in 100+ currencies
6. Subscriptions: Put payments on autopilot by offering multiple modes of recurring payments

How to Sign up for PayU Partner Program

1.Visit our website https://partner.payu.in and complete the sign-up process. Once the signup is complete, you will get access to add merchants from the Partner Dashboard

2. Add your merchant details and upload documents to complete their KYC. You can refer a single merchant or number of them by uploading a CSV file

3. You can also send a “referral link” to your merchants and ask them to create an account with PayU using the link

That’s it! You will now earn rewards on every transaction your referral does.

Here’s What our Partners have to Say!

“PayU’s Quick onboarding and flexible rate feature are the key driving factor for us. The best part about the PayU partnership is that I have a dedicated person to resolve all my queries and my referred clients are on boarded in a single day without much glitches.” – Kewal Kedia, Freelancer

“Most recommended payment gateway to all our clients. We offer payment gateway integration as service and highly recommend this partner program.” – Vibgyor Services, Technical Service Provider

Conclusion

At PayU it’s simple – you are rewarded for referring successful leads. Our partners can register leads, access marketing resources, and leverage our robust stack of payment suite to grow their business. You can learn, grow, and enhance our respective businesses for a rewarding and profitable relationship.

The post Join PayU Partner Program – Turn Referrals into Earnings appeared first on PayU Blog.