FAQ

How do we Operate?

As an MoR, we also ensure compliance with local laws and regulations on your behalf. This includes protecting you from fraudulent transactions and assisting you in fighting chargebacks. We employ a combination of built-in protection from our payment providers and our proprietary rules and algorithms to safeguard your business.

From a legal standpoint, our role as an MoR means that we act as the reseller of your software. This grants significant benefits as we take on the complex tasks of handling compliance and taxes worldwide, relieving you of these burdens. We handle everything automatically as part of our comprehensive service, allowing you to focus on your core operations.

It's important to note that our approach differs from traditional Payment Service Providers like PayPal, Stripe, or Adyen. While they process payments similarly, they do not function as an MoR. This means that with these providers, you would still be responsible for handling local compliance and taxes on your own. Failing to do so properly in any country where you're selling exposes you to potential fines, penalties, and legal issues.

How Vinpay can help you handle SaaS Taxes?

Vinipay acts as a Merchant of Record (MoR) and offers payments infrastructure solutions specifically designed for software companies. Our platform handles the complexities of back-office administration and engineering involved in payment processing, ensuring full tax compliance. With Vinipay, businesses are safeguarded against tax fraud and potential penalties, allowing them to focus on their core operations with peace of mind.

Vinipay simplifies the process of selling software on a global scale, making it more accessible and streamlined for businesses.

Vinipay operates as a Merchant of Record (MoR), providing comprehensive services to handle GST in India. We take care of collecting, accounting for, and paying these taxes to the respective Tax Authorities, relieving you of any responsibilities in this area.

How Complex can GST( Goods and Services Tax) be?

With Vinipay as your MoR, you can be relieved of these complexities. We have a dedicated finance and legal team that handles monitoring GST thresholds, applying for tax registrations, appointing tax agents and representatives, differentiating between B2B and B2C sales, reporting and remitting taxes, keeping up with tax rate changes, ensuring compliant documentation, and supporting automation of the sales process.

We understand your desire for details. As your chosen Merchant of Record (MoR), Vinipay takes on several responsibilities on your behalf. Here's an overview of what we do to support your business:

Tax Compliance:

Registering for GST( Goods and Services Tax) in India.

Appointing Tax Agents and Tax Representatives where mandatory, which can involve additional external costs.

Distinguishing between B2B and B2C sales to ensure accurate application of GST tax.

Reporting and remitting GST( Goods and Services Tax) to the respective Tax Authorities.

Monitoring changes in GST( Goods and Services Tax) rates in jurisdictions where GST is already implemented and staying informed about proposed changes worldwide.

Ensuring compliance with the Indian GST( Goods and Services Tax) laws when issuing supporting documentation, receipts, and invoices for both B2B and B2C customers.

Implementing systems to automate the sales process from a GST( Goods and Services Tax) perspective, such as applying correct rates based on jurisdictions, sale types, and customer types, and securely storing relevant data.

Fraud Prevention:

Utilizing three layers of protection against fraud.

Leveraging built-in anti-fraud solutions provided by our payment gateway service providers.

Employing third-party anti-fraud software to enhance security and prevent malicious checkout activity.

Flagging transactions with high fraud scores for manual review, temporarily freezing the transaction and funds until a decision is made.

Card Security:

Ensuring that we never view or store complete credit or debit card details on our platform.

Collaborating with Payment Card Industry (PCI) compliant providers for secure credit and debit card transaction processing.

Implementing an additional layer of security through a third-party tokenization service, enhancing the protection of customer data.

Compliance:

Maintaining PCI compliance and adhering to the Payment Card Industry Data Security Standard.

Handling credit card transactions on your behalf in a secure and compliant manner.

By taking on these responsibilities, Vinipay simplifies tax compliance, protects against fraud, and ensures the highest level of security for your transactions. With our comprehensive services as an MoR, you can confidently focus on your core business activities while we handle these critical aspects on your behalf.

Expanding the Global Reach of Your SaaS Business: Streamlining Finance, Legal, and Operations:

As international expansion becomes a strategic imperative, finance leaders, particularly CFOs play a crucial role in guiding growth decisions. Their expertise is essential in shaping the future of the business. The teams reporting to CFOs hold the responsibility of managing critical operations, such as accounts payable and receivable, payroll, and tax. The success of these teams and the robustness of their infrastructure are paramount for the smooth functioning and scalability of the business.

Considering the high stakes involved, it is crucial for finance, legal, and operations teams to direct their attention to key areas that can set them and the business up for success.

Among the various focus areas, two critical areas to prioritize are payments and compliance.

Enabling Global Sales: Building a Dynamic Payments Infrastructure for Seamless SaaS Transactions:

Expanding your sales globally necessitates a robust payments infrastructure capable of efficiently handling various aspects, including:

Local Payment Method Integration:

Incorporating local payment methods specific to India.

Offering customers the convenience of using their preferred local payment options, such as digital wallets, bank transfers, UPI, Net Banking, Credit and Debit cards.

By building a flexible and comprehensive payments infrastructure that addresses these aspects, businesses can streamline their global SaaS sales operations, enhance customer experience, and maximize revenue potential across various markets.

Cross-Border Payment Processing:

Facilitating the acceptance of payments from Indian customers.

Managing transactions across borders, ensuring smooth payment flows regardless of geographical boundaries.

Merchants can choose the pay-out cycle and the payments will be processed via our Partner AD1 Bank in India.

What makes establishing such a payments infrastructure challenging?

Challenges arise in the form of payment failures and foreign exchange (FX) fees, leading to revenue loss and involuntary customer churn.

As businesses scale internationally, payment failures become a more complex issue. The longer payment chains and lack of established relationships between banks create a sense of distrust, increasing the risk of legitimate transactions being mistakenly flagged as fraudulent. This can result in disruptions to the payment process, leading to lost revenue and dissatisfied customers.

Furthermore, longer payment chains incur additional costs. Processing payments across borders involves multiple parties, each responsible for transferring the funds a portion of the way. Each party charges a fee for their services, which can accumulate as the payment progresses through the chain. Additionally, foreign exchange fees come into play when converting one currency to another, further increasing overhead costs.

These challenges, including payment failures and FX fees, can impact the profitability of global operations and hinder customer retention. Implementing strategies to address these challenges, such as improving fraud detection systems, optimizing payment routes, and negotiating favourable FX rates, becomes essential for businesses aiming to succeed in the global marketplace.

How To solve the Problem?

Maximizing revenue and minimizing customer churn can be achieved by enhancing payment acceptance rates and reducing transaction fees. Here are several strategies to accomplish this:

Optimize Payment Routing:

Evaluate and select the most reliable payment providers and processors to ensure higher acceptance rates.

Utilize intelligent payment routing systems that dynamically direct transactions to the most efficient and cost-effective payment channels.

Enhance Fraud Detection and Prevention:

Implement advanced fraud detection tools and techniques to accurately identify fraudulent transactions while minimizing false positives.

Continuously update and refine fraud detection algorithms based on real-time data and industry best practices.

Offer Diverse Local Payment Options:

Provide a wide range of Local payment methods to cater to customers' preferences and regional requirements.

Incorporate popular local payment methods to facilitate seamless transactions and increase conversion rates.

Optimize Currency Conversion:

Partnership with AD1 Bank in India to access competitive rates and minimize transaction costs related to currency conversion.

Offer Merchants transparent and fair FX rates to encourage partnerships and encourage Local payment acceptance.

Streamline Checkout Experience:

Implement a user-friendly and intuitive checkout process with minimal steps to reduce cart abandonment rates.

Enable guest checkout options and offer convenient features like saved payment details for returning customers.

By implementing these strategies, businesses can enhance payment acceptance rates, reduce transaction fees, and create a positive payment experience for customers. This, in turn, leads to increased revenue capture, improved customer satisfaction, and reduced churn rates.

Incorporating local acquiring banks can significantly boost payment acceptance rates, resulting in a 20% increase for new customer transactions.

By leveraging local acquiring banks, businesses can tap into their established relationships and expertise within specific regions. This allows for smoother payment processing and improved acceptance rates, as these banks have a better understanding of local payment preferences, regulations, and fraud detection mechanisms.

Integrating with local acquiring banks enables businesses to offer localized payment options, such as local credit cards, direct debit, or region-specific digital wallets. This localized approach enhances the overall customer experience, increasing the likelihood of successful payment transactions.

The use of local acquiring banks also helps minimize transaction declines, as these banks have a deeper understanding of local transaction patterns and customer behaviour. This reduction in payment failures and declines contributes to higher conversion rates, expanded customer acquisition, and improved subscription renewal rates.

By embracing the capabilities of local acquiring banks, businesses can leverage their expertise to optimize payment acceptance rates, driving revenue growth and ensuring a seamless payment experience for customers.

There are important considerations to keep in mind when implementing the use of local acquiring banks:

Time and Resource Investment:

Establishing a local bank account in each new geographical location can be a time-consuming and resource-intensive process.

It may take several months to complete the setup and operationalize the accounts, requiring significant planning and coordination.

Building Trust with Issuing Banks:

Being perceived as a trusted seller by issuing banks can take time and consistent payment volumes.

Initially, even with a local banking entity, it may take some time to build a track record of payment transactions that establishes trust with issuing banks.

It's crucial to consider these factors when embarking on the implementation of local acquiring banks as part of your payment infrastructure. While the benefits of increased payment acceptance rates and improved customer experience are valuable, it's important to be prepared for the time and resource commitment involved. Building trust with issuing banks may require a gradual ramp-up in payment volumes over time. By having a clear understanding of these considerations, businesses can plan and execute their payment strategies effectively, ensuring a successful integration with local acquiring banks.

Sell through a Merchant of Record(MoR):

To streamline the payment and billing process, SaaS companies are increasingly leveraging the services of a Merchant of Record (MoR). Acting as a reseller, the MoR serves as the intermediary between the business and its customers. The MoR takes on the legal responsibility of selling goods or services to the end customers, handling the entire end-to-end payment and billing process on behalf of the SaaS company. This arrangement allows SaaS companies to focus on their core offerings while entrusting the payment operations to the expertise and capabilities of the MoR.

What are the benefits?

Merchant of Records (MoRs) go beyond managing just the transaction aspect of payments. They take on a comprehensive role encompassing the entire payment process, including checkout, transactions, returns, chargebacks, and compliance management. Additionally, MoRs assume liability for sales tax obligations.

MoRs possess extensive payment volumes, established relationships with payment processors, international merchant accounts, and their own fraud prevention mechanisms. Leveraging their existing infrastructure minimizes the risk of payment failures and alleviates the need for businesses to set up these tools and processes independently.

By partnering with an MoR, businesses can offload the complexities and responsibilities of payment management. This allows them to focus on their core operations while relying on the expertise and resources of the MoR to ensure a seamless and compliant payment experience for their customers.

Things to Consider:

By engaging with a Merchant of Record (MoR), certain touchpoints with the customer are managed on your behalf, resulting in reduced workload. However, this also means relinquishing some control over specific aspects of the customer experience. Nonetheless, you retain control over how your product is presented, priced, packaged, and the overall relationship with your customers.

Similar to payment processors, the timing of revenue reaching your account is subject to payout schedules dictated by the MoR. These schedules outline when funds are transferred to your designated account, ensuring transparency and predictability in the cash flow process.

GST( Goods and Services Tax) Compliance:

To effectively sell in India, it is imperative to establish a robust system for registering, filing, and remitting sales tax payments. This entails:

Monitoring Tax Regulations:

Keeping abreast of changes in local and international tax rules to ensure compliance with evolving tax regulations.

Accurate Tax Calculation:

Precisely calculating the amount of tax due in each geography based on the applicable tax rates, thresholds, and exemptions.

Considering factors such as product type, customer location, and transaction type to determine the appropriate tax amount.

Filing and Remittance:

Adhering to the schedule set by Tax authorities in India for filing GST( Goods and Services Tax) returns and remitting the payments.

Ensuring that all necessary documentation, reporting, and supporting records are prepared and submitted accurately and on time.

By implementing a robust process for registering, filing, and remitting GST payments, businesses can navigate the complexities of global tax compliance. This enables them to meet their obligations, minimize the risk of penalties, and maintain a positive relationship with local tax authorities in each jurisdiction where they operate.