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Efficiency is a simple term. It describes all the actions taken to make a business more productive, profitable, and less wasteful. Unfortunately, as with many other phrases in corporate terms, the word is often used as an unmeasurable distraction, becoming meaningless. Without the numbers to back it up, a phrase such as “energy efficient” doesn’t actually tell us much at all.
Ratings for efficiency do exist. In the UK, for instance, the energy efficiency scale for fridges and fridge freezers was recently amended to remove all the ratings above A (e.g. A+, A++, and A+++) and turn all previous A-rated products into D. The overall outcome of this is that manufacturers have to improve all their products to accommodate more stringent environmental guidelines. Meanwhile, in India, the International Energy Agency claims that only 24.5% of products are subject to energy efficiency policies, despite the fact that the demand for power has increased by more than 50% since 2010.
Why is all this important? Energy is an industry where independently-established ratings do exist. In the sector we’re about to discuss – payments – things aren’t quite so clear-cut.
Consumer Trust
According to at least one criterion (time taken), the efficiency of payments and other transactions is easy to measure. If a new product claims to enable faster transactions, and it turns out to be much slower than an older way, it’s clearly not efficient at all. In the latter case, this could mean that wages go unpaid and loans fall into arrears. Efficiency in payments is therefore vital to the overall success of any company in Odisha and, indeed, the rest of the world. The payments industry is run largely on the promise that your transaction will happen in the advertised time.
The rating for transaction speed is usually an adjective based on customer reviews – fast or slow – but codifying this could have a beneficial effect on consumer trust. So, why isn’t there a movement to make this happen? The problem is that each transaction is as individual as the person sending it. The amount of money, the type of accounts involved, the time of day, and plenty of other variables mean that things don’t always go as planned. Even services like PayPal, which promises instantaneous payments, have added a disclaimer on their site highlighting that instant payments aren’t always possible, dependent on the circumstances.
Increased Control
There is more to payment efficiency than transactions, though. The digitisation of financial products has increased the control that customers have over their money. For example, companies like Moss encourage the use of products like corporate cards, which can be issued to employees within businesses, allowing senior staff to view real-time updates and overviews of expenses amassed. The advantages to schemes like this include the fact that payment card fraud is essentially eliminated as a potential issue, owing to the fact that the cards are virtual. Also, there are nifty bonuses like being able to earn a percentage of payments as cashback. It’s perhaps no surprise that businesses are opting for this reliable and efficient payment alternative in an increasingly cashless world.
All-in-one style financial products help create a feeling of transparency that isn’t always possible with more traditional credit cards and bank accounts. After all, having to wait an extended period of time for something to arrive, like a statement, just to check a handful of transactions, can create feelings of anxiety and eat into customers’ faith. This kind of combined solution has only been possible since the creation of the internet but financial products have become more efficient and trustworthy over time. This improvement has affected overall adoption, too. In India, the use of online banks is set to increase by 9.8% a year to 2028.
Indian Providers
Indians are in the privileged position of being able to watch the payments industry evolve in real-time. The World Bank indicates that the number of Indian people with an internet connection increased from 20% of the population in 2018 to 43% in 2020. While this number might be considered low by the standards of some other countries, such as the 99% of Icelanders with broadband or the 97% of Norway, the accelerated modernisation of India’s infrastructure is exciting for the country’s citizens. Digital India reveals that India already has north of 150m online banking users.
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The efficiency of payment providers on the subcontinent contains to grow in size alongside its digital environment. Odisha’s local gateway, DirecPay, promises functionality like overnight integration of payment systems for businesses and acceptance of international credit cards, two things that can directly impact company performance. The gateway is by far India’s largest provider of corporate products but there are plenty of others out there, like RazorPay and Paytm. This extended choice can be a headache when it comes to picking one but competition is usually good news for customers overall.
Late Payments
Overall, efficiency in payments is a bit of a hydra. While a company might promise instant payments for all different kinds of transactions, a lack of support for foreign cards or requiring that customers have paper statements means that using it could produce a net loss in productivity. Just to reiterate, this is the reason why standardised grades or ratings for financial products simply don’t work and customer reviews remain the yardstick for judging a business’ capability, even though they’re about as far from scientific as it’s possible to get. Only angry and overjoyed people write reviews, after all.
As a final point, the efficiency of payment providers doesn’t always matter, as there is evidence that almost all (92%) businesses pay slowly. There are lots of reasons why. On the more innocent side of things, late payments happen due to poor or broken accounting processes, lost paperwork, or simple absentmindedness. The malicious side of late payments tends to have its roots in a need to reduce spending so managers may lie about contractors’ quality of work to get a discount. This can cause serious problems for external workers if e.g. false complaints end up on social media.
Efficiency is a rather nebulous term that describes everything from transaction speed to online support for products. As we discussed, failed or late payments can even provide an insight into a company’s internal culture. Overall, though, businesses should strive for parity across all their different departments and processes.
