B2B fintech companies are adopting the Bharat Connect platform for improved transaction efficiency. Leading firms like EnKash and PayMate are enhancing their operations, while challenges persist regarding commercial credit cards and the need for unique business benefits. Regulatory standardization is stabilizing the sector, although questions remain about its overall impact on fintech revenues and operations.
B2B fintech companies are leveraging the Bharat Connect platform to streamline their operations. Companies like EnKash, Happay, Open, Zoho, and PayMate are establishing themselves as significant players capable of facilitating transactions on this system. “Standardisation of Bharat Connect ensures that businesses, regardless of industry, can transact under a unified system with minimal friction,” stated Ajay Adiseshann, founder of PayMate. Additionally, Yadvendra Tyagi, co-founder of EnKash, emphasized that the regulation of this system allows pay-outs to be directly linked to invoices and mapped to GST filings.
The move to Bharat Connect follows a notable decline in corporate credit card spending, with SBI Card reporting a drop in corporate expenditure per card from Rs 51,000 to Rs 11,000 in just a year. In August of the previous year, the National Payments Corporation of India (NPCI) initiated business payments on Bharat Connect, encouraging fintech companies to switch to this enhanced platform. However, the exclusive business contracts for these firms have been eliminated, which presents a challenge for sustaining business models.
Despite the progress, hurdles remain as commercial credit cards are not yet permitted on the platform. This situation limits the potential benefits for business owners and raises questions about the unique value of Bharat Connect. A fintech founder noted, “The current payment modes via bank accounts were anyway available with the companies. The question we are being asked is what is new that businesses get via Bharat Connect and what is their commercial benefit.”
While regulatory challenges have been notable, the standardization of fintech products has stabilized operations in this sector. Tyagi remarked, “As operating units, we are regulated ventures now and investors are finding comfort in the fact that there are regulations in this space.” Investors are closely evaluating startups in light of the Reserve Bank of India’s stance, which helps in easing customer onboarding—a significant expense for fintech firms.
Adiseshann added, “One of the key benefits of the platform is the reduction of redundant tasks, such as repetitive KYC collection and customer identification, which currently demand substantial time and resources.” This development, although faced with challenges, signals positive traction towards formalization in the fintech landscape in India, as credit card transactions continue to face restrictions from the RBI.
In summary, the movement of B2B fintech companies to the Bharat Connect platform represents both an opportunity and a challenge. While standardized regulations aim to facilitate transactions and enhance investor confidence, the absence of commercial credit card usage and the need for distinct benefits for businesses are critical concerns that remain unaddressed. Nonetheless, the shift heralds a new era of formalization and stability in the fintech sector.
Original Source: m.economictimes.com
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