India Businesses Look to Flat-Fee Pricing to Save on Transaction Charges

In India, direct bank transfer, checks and cash remain popular B2B payment methods, despite their drawbacks — mostly because businesses haven’t had any good alternatives. Because B2B ticket size is high and margins are low, payment gateways are not an option due to the high transaction charges and settlement delays using them involves.

Paysharp, a two-year-old FinTech, now offers a solution: a flat-fee pricing model. The company is a payment gateway for National Electronic Funds Transfer (NEFT), Immediate Payment Service (IMPS) and real-time gross settlement (RTGS) payments with a flat, fixed fee per transaction.

“Businesses feel like they are collecting directly to their bank accounts, they receive real-time notifications and they receive the funds on the same day — even for selected businesses we provide settlements in two hours without any additional charges,” Paysharp founder and CEO Krishna Kumar Mani told PYMNTS.

Acting as a Very Thin Layer Between B2B Payor, Payee

This flat-fee solution also saves the transaction fee and eliminates issues with reconciliation, as well as offering easy integration and scalability, Mani said.

Businesses either pay a small fixed flat fee per transaction or they can opt for a flat monthly subscription fee. In either case, the company does not charge based on the value of the transaction.

“Paysharp is a payment intermediary that acts as a very thin layer between B2B business and end customer who pays to business,” Mani said. “Paysharp provides a collection solution with transaction-level automatic reconciliation and seamlessly integrated with their existing system.”

Seeing a Lot of Opportunities in B2B Payments

In India, business-to-consumer (B2C) payment gateways are a huge and growing market, but B2B is unattractive for companies operating in that because the pricing is not based on a percentage.

“The B2B payment issue, as a serial entrepreneur, I faced in my previous startup also,” Mani said. “B2B businesses need two points: fixed price and instant settlement. Also, they are fine with limited payment methods.”

Paysharp supports B2B business payment collection via bank transfers. Because many businesses, such as those in the logistics industry, remain largely cash-based, the company is working on a product to collect physical cash by partnering with a bank. It expects to have the cash collection product live this quarter.

“We see a lot of opportunities in the core B2B payment segment,” the Paysharp founder said. “Based on demand, we are innovating new payment solutions for B2B business and marketplace.”

Paysharp is also exploring solutions such as offering completely split payments at a fixed price, developing an application programming interface for order-level transaction mapping and acting as a technology service provider to some B2B clients, along with other connected banking solutions.

“We are working closely with B2B clients and banks and constantly innovating and improving our products,” Mani said.