Who does it and how:
A kirana store with a UPI QR code (from PhonePe, Paytm, GPay, or a bank BC) receives settlements from the payment aggregator into their bank account the next day. The actual work is reconciling that settlement against what the merchant believes they received in-store.
- Kirana store owners with 1–5 staff: most use a physical register or an accounting diary. They know their daily collections in rough terms. They match their phone's UPI app notification against cash in the drawer, and their bank SMS against the expected amount. On a ₹3,000–15,000 daily collection day, this is manageable. On a busy market day with 100+ transactions, it breaks down — small merchants undercount or misattribute transactions.
- Field sales agents (FSAs) and business correspondent (BC) agents: these are the human layer that distributes and maintains QR code relationships. A BC agent from a bank (SBI, PNB, Bank of Baroda) or a white-label BC company (某些未验证公司) visits kirana shops, sets up their UPI QR, and earns ₹50–200 per merchant per month as a commission pass-through from the payment aggregator. The agent manages 50–300 merchants this way.
- Small payment aggregators (PAs) — companies that aggregate merchants and route them to banks or large PG networks: these companies handle settlement reconciliation for their merchant portfolios. The typical workflow: they receive a settlement CSV from Razorpay or Cashfree, open it in Excel, and manually match transaction IDs against their own sales records. For a portfolio of 200 merchants at 10 transactions per merchant per day, that's 2,000 rows per day to reconcile. This is done by one employee earning ₹20,000–30,000 per month, spending 2–3 hours per day on reconciliation alone.
- Duplicate or missed settlements: When a transaction settles twice or fails to settle, the merchant has no automated way to flag it. They discover it only when the bank SMS doesn't match expectations, often weeks later. Recovery rate on such disputes is low without documentation.
- MDR opacity: Kirana stores on free QR (no MDR paid by customer) receive full settlement. But merchants using a PA with MDR share have the MDR deducted at settlement. Many don't track this correctly and believe they received less than they should have.
- Cash float risk: On days when UPI collections are high but bank settlement is delayed (T+1 or T+2 for some PAs), the merchant has cash flow uncertainty. They don't know if a ₹5,000 UPI payment will appear tomorrow or if it failed silently.
- BC agent churn: BC agents managing 50–300 merchants on commission have low margin per merchant. At ₹100 per merchant per month on 100 merchants, that's ₹10,000/month. At this income level, agents churn quickly, leaving merchants with no support and no reconciliation help.