Find out How Digital Payment Benefits MSME
MSMEs or micro, small and medium firms make a huge contribution to the country’s GDP and employment levels. They offer many services across industries; however, many surveys have shown that only 5% of these MSMEs have adopted digital payments as part of their regular operations. This not only affects their efficiency and competitiveness in domestic markets but also globally.
The global pandemic made it even more obvious that a robust digital payment system will undoubtedly accelerate digital payment with the increased use of applications like Bhim UPI MSMEs. You can learn more about the Bhim UPI QR code here.
Some of the most intuitive benefits of integrating digital payment with MSME’s include:
Convenient, efficient, and user-friendly payment systems
● Reduction in the number of payment cycles
● The ability to offer customizable payment services
● Get discount schemes for your customers by partnering with issuers.
● Safe and secure transactions
● Ensure growth in business as customers prefer digital payment, as shown by studies
● Create your tailor-made loyalty schemes
● Minimize human errors and avoid frauds as it makes accounting and reconciliation easy
Any MSME that has embraced digital payment and added it to the infrastructure will have the upper hand will get these benefits and, in turn, have an advantage over its customers.
However, some problems have prevented the MSME from adopting the digital payment infrastructure. Some such factors include:
● Lack of awareness
Even though India has the second-highest number of internet users globally, there is a severe lack of digital literacy. Especially in MSMEs, people are not aware of the potential benefits of becoming a part of the digital payment infrastructure. This lack of awareness is especially common in businesses that have associations with traditions and customs,
● Insufficient infrastructure
For the 100% adoption of digital payment systems by the MSMEs, there must be proper infrastructure both at the physical and the digital levels.
The physical infrastructure refers to the logistics sector that offers interconnectivity between all the logistics chain operators, thereby guaranteeing last-mile connectivity.
Whereas digital infrastructure refers to reliable, safe, and secure access to the internet and the services. This is even a big obstacle in remote areas.
● Capacity deficits
The MSMEs and the associated operators find it difficult to adjust in the digital technology ecosystem because there are is a lack of knowledge and skill in operating the components of digital infrastructure.
Hence, it is apparent that the center and state have to play an important role in capacity building as that would take care of most of the problems listed above in time.
It is apparent that when an MSME becomes a part of the digital payment ecosystem, there are countless benefits. Therefore, the pandemic has accelerated the inevitable shift to digital payments, which was already underway albeit at a slower pace.
Even going forward, the MSMEs that have armed themselves with digital technology will have a better experience in the economic recovery and, therefore, will undoubtedly lead the growth from the front.
That stands true whatever of whether you are into hardware industries or khadi industries. Click here to learn in detail the effect of digital payment on your business, whether you want to know about the hardware business or any other business.