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ICICI Bank recently launched a digital and contactless banking and retail stack for merchants called ‘Merchant Stack’, which aims to enhance the productivity and efficiency of over 2 crore retail merchants in the country.

The comprehensive stack allows retail merchants — right from grocers and large retail store chains to online businesses and large e-commerce firms — to serve their customers during the pandemic in a contactless and efficient way.

To explore the seamless banking services, digitally-powered marketplace, and other value-added features of the Merchant Stack in depth, Madan Mohan Rao, Research Director at YourStory Media, talked to Pankaj Gadgil, Head- Self Employed Segment, ICICI Bank.

A stack that helps merchants to focus on their core businesses

Pankaj explained how the Merchant Stack is a natural extension of the ICICI Stack that was released in 2020, given that it aimed to make the journeys of its customers as smooth and convenient as possible.

“The Merchant Stack provides a host of contactless services on the banking side to the merchants, which can be availed digitally and instantly. Based on the concept of ‘business with care’, this solution ensures that the merchants can accept payments in a contactless manner without any hassles,” he said.

He also mentioned the other services of the Merchant Stack that went beyond banking, so that traders could spend most of their time on their business and its growth.

Five things to watch out for in the Merchant Stack

Given that the focus of the stack was to offer a set of contactless and digital services, so that banking, accounting and payments became easier for merchants, Pankaj spoke about the five pillars of this single delivery solution.

“The first pillar is the Super Merchant Current Account, a zero balance account that that is available in two variants —Super Advantage and Super Advantage Plus— to suit the requirements of merchants as per the size of their operations,” he said, adding that account holders also get the benefit of instant reconciliation by using the bank’s ‘Connected Banking’ platform. It integrates banking and their accounting system, saving them both time and effort.

Pankaj also delved into how the current account offers retailers the convenience of transacting with their customers using multiple digital modes of payment like cards, UPI and payment gateways.

According to Pankaj, the second pillar is a unique scorecard that dovetails a merchant’s transactions, types of merchant, credit history and more and allows ease of access to working capital with the bank. He also outlined how they are creating a ‘Merchant Overdraft’ facility that empowers pre-qualified merchants with a linked ICICI Bank point of sale (POS) machine and to get upto Rs 25 lakh digitally.

“Further, the bank provides instant settlement of POS transactions with ‘Express Credit’. It offers enhanced convenience as merchants can instantly access the funds, in contrast to the industry practice of waiting for a few working days to get credit for sales on POS machines,” he said.

He also talked about how the mechanism decongests the settlement process with network partners for movement of funds— a move that can help many traders with their working capital constraints.

Explaining the third pillar, Pankaj highlighted that ICICI Bank would help merchants go online with digital store management as it allows customers to go online and order products seamlessly.

The three features enabling this are: easy supply, easy billing and an easy store. Through this feature he said that merchants can actually create a virtual store in almost no time, and the customer can ensure that the actual process of buying is contactless.

“We have provided the entire service on the InstaBIZ mobile application. It has more than 10 lakh users today, with more than 200 services. And the Merchant Stack is embedded in these services and dovetailed with corporate internet banking and trade online to provide a seamless and digital experience,” he said.

A deep-dive into the digital store manager

Pankaj explained how after getting feedback from merchants, it dawned on them that integrating payments, banking along with forward and backward linkages was going to be a meaningful proposition for them. As a result, they developed a digital store manager where onboarding onto the Easy Store just takes around 30 minutes. He then explained the three services of the digital store in-depth.

The first being easy billing, in which data entry becomes a seamless process with the help of 1.5 lakh store keeping units (SKUs) that are stored in a catalogue that goes a long way for merchants taking down orders and preparing bills.

“It allows merchants to provide customers a link to an online marketplace, which allows them to order seamlessly. It also ensures that reconciliation takes place between billing, accounting and banking.”

The next feature is called easy supply, which takes care of the backward linkage aspect. “Most of these merchants order from distributors, so we made sure that the leading distributors provide these catalogues inside the easy pay application, so that merchants can order through these catalogues. The store is updated every 7 days and it is made sure that the right prices are put up,” he said.

Going beyond banking to provide value to merchants

Pankaj also covered how the InstaBIZ application supports all tasks on the agenda of a small business, right from banking transactions, to compliances and paying GST to corporate taxes.

“Some of them are into imports and exports businesses, which is enabled in InstaBIZ. Many merchants also want to avail lending to maximise productivity and freely network with the large customer base of the ICICI Bank, They can do all this with the InstaBIZ app,” he said.

Pankaj also talked about how certain partners of ICICI Bank allow merchants to be able to take care of their medical needs, and maximise the time they spent on their businesses by finding someone to take care of marketing and other functions.

The road ahead

Pankaj ended the session by outlining the potential of growth in the sector. “Digitisation still has a long way to go. Come FY22, the market of digital spends, a summation of UPI, netbanking and wallets is going to be Rs 31 lakh crore,” he said, with more than 2 crore merchants estimated to operate in the retail space in the near future.

“We would want to have a meaningful share (of this market), and make sure that the Merchant Stack reaches more and more people. To that end, we are ensuring that the customer insights are regularly captured, given that they keep changing. It is these insights that will guide the new developments on this front,” he said.