1. HUL Alternatives to Cash Payments Team A6

2. RetailerDistributorHUL CompanyD1R1R2D2R3R4R5

3. Payment system- Manual- cash based system Bills which are generated can be partly/wholly paid in cash at any point of time. Bill’s full payment can occur from the point of bill generation to 15+7 days Have sales target in a particular region Retailers order whenever inventory is near depletion Generation of bills at the time of order Registers in mobile HUL software More comfortable with Cash based system Discounts for paying the bill on time Offering 2-5% discount for early payment This is to Reduce the Accounts receivable cycle Done to increase the working Capital in system Retailers Distributors HUL HUL Current system

4. Current System - Retailers pay by cash by 15+7 days In spite of Incentives- payments received only on the last day Problems in receiving “accounts receivable on time” Designing a system that can either Reduce Cycle time Realize the Cash due as early as possible Implementable cashless transaction Objective

5. Methodology Field Visit Understanding the scenario Possible problems Visited 31 stores Brainstorming Deciding on possible solutions Checking feasibility Field visit TMS- visited 3 stores Checking out feasibility- 15 stores

6. Challenges for retailer  No problem whatsoever with the current cash based payment system  Most retailers have online account, but aren’t willing to use for various reason; Trust, Legal, Convenience  Not all the stores have Current account for banking, so use personal savings account  Bills which are generated can be partly/wholly paid in cash at any point of time  Credit facility and early payment discount may not exist in the new system  Sometimes online accounts has tax liability associated with it which instils fear among retailers

7. Transaction on PDC (Alternative 1)  Mobile/PDC for order placement to be used for bill payment  Retailer registers for electronic clearing system with its bank  Upon producing the bill, retailer enters the (flexible) amount he wants to pay through the salespersons PDC  Entered amount will be deducted directly from retailers account with help of GPRS  For security reason a PIN could be used by the retailers  Another payment system similar to what is available with Vodafone mobile recharge could be used  https://www.vodafone.in/prepaid/recharge/pages/dire ct_topup_sms_ap.aspx?cid=kol https://www.vodafone.in/prepaid/recharge/pages/dire ct_topup_sms_ap.aspx?cid=kol

8. Third party Post paid card Portal Distribu tor/HU L Retailer Bills On Credit Rechar ge of card Cash /Account Reimburse ment Cashless postpaid card/tag, via a third party, whose whole purpose is to offer extremely convenient way of transacting with retailers, saving sales reps the hassle of carrying cash around and struggling with credit demands of retailers. (Oxy Cash, Easy Pay, RuPay) How it works  Account created for every retailer in a payment portal and issued a unique tag/card  Sales man given a scanner/app for reading the unique tag of retailer  Sales man takes order, generates bill and credits it into the account of retailer by scanning the unique tag  Retailer given a 15 day credit limit in card within which he has to pay. Else tag will become non readable and no further orders can be taken  Retailer can recharge account through banks/ cheque/ online payment etc  Sales man updates all order into the server at the start and end of each day  Payment to HUL account when retailer recharges his account (Alternative 2)

9. Advantages Disadvantages  Basic cash-less replacement for existing system  Better tracking of flow of cash and payment history of retailers  Eliminating scope of fraud which physical payment engenders  Retailer forced to transfer his sales to online account  Online account under tighter scrutiny thus creating tax implications  Smaller retailers find it cumbersome to operate an account

10. Way Forward  Do a feasibility study of all the payment systems, and search any other system that would serve the purpose  Find the scope of implementation.  Prepare a plan for roll out.  Have a plan to record all the feedback, so that could be revised and implemented sustainably in the next phase.

11. THIRD PARTY POSTPAID CARD PortalDistributor/HULRetailer Bills On Credit Recharge of card Cash /Account Reimbursement Cashless postpaid card/tag, via a third party, whose whole purpose is to offer extremely convenient way of transacting with retailers, saving sales reps the hassle of carrying cash around and struggling with credit demands of retailers How it works 1.Account created for every retailer in a payment portal and issued a unique tag/card 2.Sales man given a scanner/app for reading the unique tag of retailer 3.Sales man takes order, generates bill and credits it into the account of retailer by scanning the unique tag 4.Retailer given a 15 day credit limit in card within which he has to pay. Else tag will become non readable and no further orders can be taken 5.Retailer can recharge account through banks/ cheque/ online payment etc 6.Sales man updates all order into the server at the start and end of each day 7.Payment to HUL account when retailer recharges his account