Zoho debuts payments solution with risk, compliance support

Business management solutions provider Zoho announced the general release of a new payments solution, Zoho Payments, promised to be the first step in a broader move into financial services. 

The new Zoho Payments solution focuses specifically on incoming, not outgoing, payments. While there are already several options to accept payments from within the Zoho ecosystem, Sivaramakrishnan Iswaran, Zoho's global head of finance and operations, said what makes this product different is that it works through its own payment gateway instead of integrating with someone else's. This gateway (basically the software needed to accept debit or credit card purchases from customers) will also be integrated with all the other solutions in the Zoho ecosystem, as well as their workflows. However, he later added that it will still support third-party integrations in case a customer wanted to use another one. 

Zoho Payments will also be available as a standalone offer, with Iswaran saying Zoho will be directly competing with incumbent payment solutions providers like Stripe and PayPal. 

"The obvious question is why are you getting into this area? Honestly, there is no one particular vendor who can actually address all the problems for [every] customer," he said during an interview. "The market is huge. There is room for a lot of players, and each market player can find their own niche." 

In the case of Zoho Payments, the major differentiating factor will be the amount of support happening in the background to facilitate all the major checks and balances typically needed for secure payments. Accepting payments can entail a lot more than just receiving the money and sending a receipt. Before the payment, businesses might need to consider things like identity verification, know-your-customer rules, sanctions and anti-money laundering screening, fraud and risk management; after the payment, they might need to think about transaction settlements, bank reconciliation, tax reporting and dispute resolution. 

Iswaran said this typically requires a lot of manual processes on the part of the user, which can delay the onboarding of new customers, sometimes severely so. By using its own dedicated payment portal, Zoho can do a lot of the heavy lifting without the user even noticing. While a transaction might seem simple to those sending and receiving the payment, it is supported by extensive support — both automated and manual — happening in the background.

"We do a lot of heavy lifting in the background," said Iswaran during the product announcement. "For example, before giving a merchant account to a customer, we have to do the complete [know-your-customer] check, identity verification, [anti-money laundering] and various sanction screenings, abide by various compliance rules that are set by the card networks like Visa and by the various central banks and the banks, manage risk and fraud, a whole lot of things. … So the product definition might look simple, but underneath, the underlying product is very complex."  

Beyond this dedicated support, he said that integrating Payments into the wider Zoho ecosystem means the solution both supports, and is supported by, other products in the suite. By working together, he said they can create a true end-to-end solution that covers every step of the process from start to finish. 

"So we will actually embed the Zoho Payments natively in all these products, into the entire ecosystem, making accepting payments very simple and easy. And we will also be supporting the various flows in which the payments can be collected. That is sending out an invoice and collecting the payment, or maybe sending out a payment link, or just collecting payment through hosted pages or subscription-related payments, or maybe just embedding a checkout form to collect payment from the e-commerce website. So we'll be supporting all these scenarios. So with this payment launch, we actually cover the end to end of the spectrum," he said at the product launch. 

Zoho Payments launched last year in India before becoming generally available now. Iswaran, in an interview, said that India (where Zoho is based) was a good place to start because the Central Bank of India imposes an unusually large amount of financial regulation and reporting requirements to regulate the payment industry there. The thinking was that if Zoho could build a product to satisfy regulators in India, it could be successful in many other countries as well. 

"Being a regulated business, the central bank actually asks for a lot of things," said Iswaran. For example, it often asks companies how they'll respond to particular scenarios that arise over the course of its work, "so that's the kind of environment we have in involvement with the central bank in India. So that actually prepares us a lot, and that is definitely helping us with the launch this year as well," he said. 

Iswaran said the release is just the first step in a larger push into the fintech/financial services space. 

"We have more products to follow. Zoho will have more exciting launches, so stay tuned," he said at the end of the product launch. 

Zoho Payments helps businesses accept card payments in over 135 currencies and ACH payments for transactions within the U.S. The payment solution works out-of-the-box with Zoho's apps from finance and operations, sales and marketing, low-code and collaboration platforms. Businesses can also connect to any third-party systems via APIs to collect payments. The solution is PCI DSS Level 1 compliant. 

Zoho Payments is now available for use. Pricing for domestic cards is 2.9% + 30¢ per transaction, which includes Visa, Mastercard, Amex, Discover, JCB, UnionPay and Diners Club. The pricing for international cards is 1.5% plus the domestic card fee.