Solutions for Business Facing Cash Crunch?

Businesses have always vied for liquidity to run their business operations. Be it a matter of petty cash for day-to-day small payment, Impress accounts or payment to parties; cash has been the king and traditionally the most preferred option.

This is not withstanding the risks involved, counting and verifying or keeping laborious account for every transaction. Despite these hardships, however, things took a hit for the worst after the demonetization of higher denominations of currency notes by the Indian government. Coupled with the cap on daily cash transaction limit and volume of cash in the kitty at one time, things are slated to see the worse with more stringent steps on the anvil for curbing cash transaction.

The government is going no holds barred in an all-out war against black money and curbing corruption. At the same time, government i giving unprecedented push to a digital and cashless economy with transparency as an important underlying element. What it means for businesses is that the days of dealing in hard cash are over. It is imperative for the businesses to become tech-savvy and rely more on e-transactions.
 How business can overcome cash crunch?
 It is said that “necessity is the mother of invention”, and it was amply proved during the aftermath of demonetization. Almost overnight, the petty hawkers like tea-sellers and vegetable-vendors, small traders operating from small kiosks, people selling their wares on movable carts, began to accept e-payments through mobiles. Many adopted certain mobile wallets to facilitate transactions with their customers. Several of them pasted their QR codes on their sales counters. In the aftermath of demonetization, most of the traders and business upgraded themselves to the next level of getting and using money.
 What are the options for electronic transactions?
There exist several electronic options for sending and receiving Online Money Transfer, albeit with certain specific drawbacks. The first and foremost is Net-Banking. It offers three services for transferring money; National Electronic Funds Transfer (NEFT), Real-time Gross Settlement (RTGS) and Immediate Payment Service (IMPS). Only IMPS is instantaneous and works 24x7. However, the drawbacks are; it requires information of name, ban account and NFSC of the receiver and needs this to be registered before initiating a transfer.
 Another option was payment through Debit or Credit card. However, customers are generally hesitant to swipe these on the merchant’s swipe machine and put their secret PIN in public.
 A newer option was Mobile wallets. However, it required money to be loaded first, which ceases to earn any interest. The payment would go to the mobile wallet company first, before a merchant could get it transferred to his bank account, after paying charges. It also had a very low cap of daily spending to enable customer make any large purchases.
 The UPI option: What makes it the Best!
 The UPI App simplifies money transfers and makes it as convenient as cash, or even more. For businesses the most important benefit is that, it allows transfer of a very high amount of up to Rs. 1 lakhs in a single transaction. Moreover, the charges are minimal. The transfer is instant and reflects in the books of account. There are many more advantages of UPI, a few of which are listed below:
 • Mobile phone becomes the Point of Sale (POS) device. It can also “pull” payments by sending the “Pay” message to the customer’s phone.
 • UPI allows for a mobile phone to be transformed into a POS (point of sale) device for merchants. This will democratise payment collection systems for even the smallest of merchants.
 • Coupled with a Bharat QR code working on UPI, and having the capability to generate Static or Dynamic QR codes; it provides a complete payment solution.
 • UPI is interoperable across any bank’s account.
 • It is a universal payment solution and is not tied to a specific Payment Service Provider (PSP).
 Any business facing cash crunch can avoid it by switching over to UPI. It has become the game-changer in the payment vertical which was dependent on cash earlier.