ServiceTree is one of the early adopters of the Paysharp solution. ServiceTree is an on-demand appliance service company, one can call it an Uber for appliance repair. It is a three-year-old company headquarterd in Chennai. The business helps connect appliance technicians with customers. What stands out for ServiceTree is that the technicians (clients) can pay them by cash or bank transfer. The average payment amount is INR 10,000.
Earlier most of company's clients paid in cash which led to inconvenience. It proved to be a big burden on office staff as they faced safety issues with the involvement of depositing cash in the banks. Therefore, the company encouraged clients to make bank transfers to the greatest possible extent. With the efforts centred on the bank-transfer initiative, the business saw results in a few months, wherein it received 90% of payments by bank transfer.
Although transactions saw success with swift bank transactions as opposed to cash, it paved way to a new concern, reconciliation. For instance, upon the bank transfer, the clients were directed to notify the firm’s sales team about the payment, who then shared the update with the accounts team. The process saw a setback with mismatches in the amounts due to several credits with the same amount. The occurrence gave rise to the business having to educate the clients on the UTR (Unique Taxpayer Reference) number. UTR is a unique number that is created to identify any fund transfer and is mandatory to claim the payment transaction.
On putting the use of UTR number in place, the company started receiving UTR numbers from their clients for over 70 % of payments, even though the reconciliation process involved the complex task of matching the reference number and tagging each client’s payment. Every month the business spent three days matching the reference numbers and tagging it with the correct client name. In case of any unknown payments, the amount had to be saved in a suspense account, which the staff kept a tab on every month end.
Following are some of the solutions that did not work for the business
With the company’s average ticket size of INR 10,000 and the fee acceptance via payment gateway, the MDR (Merchant Discount Rate) stood at around 2%. Besides, it took T+3 days to get the money transferred to the bank account. The continued deployment of the solution did not bring any reconciliation issues to the business, but caused a 2 % loss in the total revenue. Therefore, it did not seem a feasible payment method for the company.
Due to the widespread popularity of UPI applications, the clients paid to the business’s bank account using Google Pay or PhonePe with a screenshot attached. The staff at company then had to verify the UTR number against the bank statement and make tags. The solution did not make the employee’s work any easier.
The inception of Paysharp led to automated reconciliation without manual effort so that the business no longer had to verify the payment with UTR number and tag the client as the system did all the work.The firm then started sharing its new Paysharp account numbers to its clients upon their enrolment. Likewise, the clients made the payment to the assigned account number, where the Paysharp system took care of the process. The company received payment settlements to its bank account on the same day without losing a percentage of revenue.
On using the Paysharp web-based solution, ServiceTree saved a lot of man-hours on reconciliation and prevented human errors. Additionally, it also enabled the business from holding any funds in suspense account and enhanced the overall customer experience. All it took for the company to go live is just two days