Smooth vendor payments are an important part of business operations.
It’s equally important that those vendor payments have high transaction success rates.
After all, you don’t want your payments credited to the wrong beneficiary. You also don’t want failed vendor payments as that can lead to a loss of trust and hamper loyalty.
Unfortunately, such occurrences are not uncommon.
In fact, according to Cashfree’s internal data, about 3.5% of all the vendors that the merchants onboard on easy split have incorrect credentials/bank account details. This results in a variety of problems:
- More number of fraudulent onboarded vendors increases your risk of doing business
- Increased reversals/settlement failures due to non-existing/invalid accounts leading to cash flow management issues
- Inability to find out if you made the settlements to the right vendor account due to lack of confirmation mechanism
- Increased vendor dissatisfaction if their funds are not received on time
As a market leader in vendor payouts, we knew we needed to fill the market gap.
Read this blog to find out how we did!
What is Vendor Account Verification?
The vendor account verification process involves checking the accuracy of details provided by your vendor/partner. It is the verification against the actual bank records or UPI servers, especially during vendor onboarding.
This process includes the verification of details such as the account holder’s name, bank account number, IFSC, and UPI ID/UPI VPA.
How Does Cashfree Payments’s Vendor Account Verification Solve This?
The Easy Split vendor account verification feature by Cashfree Payments helps solve all the problems stated above.
How do we do it?
Well, by validating the 4 most important parameters of any vendor onboarding process:
- Bank Account Number: It matches the bank account number that you provide with the actual bank records. This is to check if it’s a valid bank account and if it’s tied to the right beneficiary name.
- IFSC (Indian Financial System Code): Easy Split matches the IFSC code that you provide us with the actual bank records. This is to check if it’s a valid IFSC. It also verifies if the IFSC is linked to the right bank account number.
- Name Match: Matches the names provided by you with the name registered at the bank against the same account number and checks if it’s correct.
- UPI VPA / UPI ID: Matches the UPI ID / UPI VPA provided by you and matches with the UPI servers to check if it’s a valid UPI and if matches the name registered with it.
What are the Key Benefits to Experience When You Verify Vendors while Onboarding?
- Decreased risk of fraudulence among onboarded customers lowering your risk of doing business
- Zero reversals/settlement failures due to non-existing/invalid accounts leading to better cash flow management.
- Absolute confirmation on the beneficiary account ensures that you settle payments to the right account every single time
- Increases vendor satisfaction and trust due to timely payments without the hassle of payment failures/delays.
How to Use Vendor Account Verification Feature within Easy Split?
You can use both the Cashfree payments Easy Split dashboard and APIs to validate the vendor/partner information.
- Dashboard: Use the dashboard to add vendors – enter the vendor name, mobile number, email ID and bank account number.
- Cashfree Payments will verify if the bank account is correct and match the name provided by the vendor with the name as per bank records
- You can also verify the UPI ID of vendors in real-time
- Do single vendor verification or upload an excel file with vendor details and add multiple vendors in a go and verify their account details
- API: You can also use Easy Split API to add vendors and verify bank account details in real-time during onboarding – For this, you will have to pass an optional parameter “verifyAccount” = “true” while vendor onboarding or editing.
How Can You Use Vendor Account Validation?
Here is some industry use cases of vendor account validation.
- Financial Services: Businesses like Zerodha and policy bazaar which are investment and insurance marketplaces respectively need to validate their mutual funds/insurance providers before settling funds received from customers into their accounts.
- E-commerce Marketplaces: Businesses such as Flipkart and Nykaa need to validate their vendors/sellers/partners listed on their platforms to settle funds received from customers into their accounts.
- Ed Tech Platforms: Businesses like Unacademy need to validate the details of teachers to make payouts for the services that they provide on their platform.
- Franchise / Multi Branch Networks: Businesses with multiple branches need to validate the details of their franchises or branches to make payouts in the form of commissions/bonuses.
Vendor account verification is not limited to only the above use cases. In fact, any business owner that needs to make payouts to vendors/partners can make use of vendor account verification within Easy Split.
For more information, reach out to our payment experts here.
