With the new age of digital platforms and aggregators revolutionising the market, the RBI has proposed nodal accounts for online intermediaries. The purpose of a nodal account is to hold funds on behalf of the customers and vendors. It safeguards the interests of customers and vendors so that payments are collected, processed and payouts, are done to relevant vendors without undue delay. Your business would be an intermediary if you meet any one of the following criterias:
You are collecting money on behalf of vendors from your customers
You are sourcing the products/services and are not the manufacturer or creator of the same
You do not fully pay for the products or services
Below are some of the real-world use cases and how nodal accounts are advantageous for them:
E-commerce & Marketplaces:
Easily set up sellors/vendors and set up commissions and settlements
Instant refunds through various bank settlements
Easily reconcile payments and automate payouts
Offer cashback and offers to customers through direct settlements
Lending & Financing
Easily Disburse loans to customers
For lending aggregators, easily manage funds of various lendors and customers with direct disbursals and recollections
Easily send refunds
Maker & Checker for lending partners & aggregators to ensure compliance
Instant disbursals of claim amounts
Track every transaction and claim payouts through APIs
Settle commision payouts for every insurance vendors & partners
For aggregators, instantly settle with Insurance providers and settle commissions on payouts.
What is a Nodal Account?
Nodal Account is a type of current account that is used to hold the funds on behalf of customer & vendors (payouts) to safeguard the interests of the two parties. A nodal account ensures that the money does not legally belong to the intermediary at any point of time. Nodal Accounts were introduced by the RBI as a mandate for intermediaries such as aggregators, e-commerce platforms & payment gateways.
The guidelines posted by the RBI regarding the same as posted below:
During the operation and onboarding, the problems most people face while working with most banks:
Complicated On-boarding and minimum business requirements
Multiple modes of collection of payments through external partners into the Nodal Account
Defining commissions for multiple vendors, intermediaries and aggregator
Manual adjustments for payouts for transactions level requests such as discounts, cashback, additional charges, fees, etc.
Unable to handle instant disbursals to vendors, with defined commissions to create smoother settlements.
Complicated reconciliations for the entire flow of funds
Through Paytm Payments Bank’ Nodal Account offering with powerful APIs, easier on-boarding and dedicated Key account manager, the entire process becomes easy. We provide a powerful, easy & robust system to help you focus on your business.