How we deeply integrate with banks to support payments through net-banking
Apart from using cards, a major percentage of customers use their internet banking accounts to transact online. Net banking transactions contribute to around 20% of the overall traffic, thereby making it an important mode of payment. The payment flow of a net banking transaction is different from a card transaction. In the latter, distinct entities like acquiring bank, issuing bank and Visa/Master associations are involved whereas in a net banking transaction, PayUBiz interacts with the issuing bank only. This results in separate technical integration with each issuing bank. This presents us with a lot of challenges based upon different set of constraints related to individual banks. We will discuss this in a while. Now imagine a scenario:
- PayUbiz re-directs the customer to Bank login page. Customer logs in, completes authentication and bank debits the amount
- Bank re-directs the customer back to PayUBiz, but response drops before reaching PayUBiz Domain
- Though, the bank server knows that account is debited, PayUBiz and merchant aren’t aware of the status and transaction fails – leaving customer in disbelief
Once we focused hard enough on the problem and broke it into the above 3 steps, it was easy to spot the solution – which was pretty intuitive. Using the fact that the bank knows about correct transaction status in such scenario, PayUBiz came up with the idea to retrieve the correct status by making a server to server API hit to bank. This is a back-end call which helps reconcile the status of dropped transactions with the bank. We term it as update API. Its benefits are:
1) Customer and merchant get the updated status in real time. Without this API, PayUBiz would get the right status on the next day via Bank’s Reconciliation File
2) This is seriously useful in assuring the customer that his money is safe and the subsequent action can be decided instantly (whether to process the order or refund it)
Measuring data over a considerable time period, it has been observed that this API improves the overall Net Banking success rate by around 0.6%. If we visualize this feature as helping out an anxious customer whose account is deducted without any order confirmation, then 0.6% is a high impact number. It also means making the customer confident of overall payment experience so that he doesn’t hesitate in using the merchant portal next time around.
For the merchant, it has also reduced any operational efforts required for Reconciliation of these transactions and doing manual adjustments during settlement. The number of such cases have been reduced by 85-90%. To put it in another way, an average of 0.8% of total transactions had to be manually updated earlier during Reconciliation Process but it has been reduced to almost zero now.
Now back to the challenge mentioned earlier, which PayUBiz faced in this activity. With 50+ internet banking associations partnering with PayUBiz, 50+ different technical integrations had to be maintained by PayUBiz. Since this a bank’s API, PayUBiz had to ask each bank to open up this API for us. This meant separate discussions with each bank, getting it approved, developed, tested and deployed. The idea presented to them was simple – it being a win-win situation for all stakeholders including customer, merchant, PayUBiz and the bank itself.
With this API, PayUBiz now supports a deeper integration with banks – which can be visualized as PayUBiz being an extension of the bank using features like this which are a mix of PayUBiz’s vision, bank’s technology, customer’s ease and a merchant’s delight.