As much of the digital commerce world is busy creating payment ecosystems for consumers, merchants who accept these payments need digital ecosystems with highly specialized and integrated services.
Fresh from a $ 375 million Series F round of funding, placing its current valuation at $ 7.5 billion, payments platform based in Bengaluru, India Razorpay creates a B2B ecosystem for Indian businesses, innovating with the national Unified Payments Interface (UPI) system to provide a multitude of services to corporate clients, from tax payments to loans, via neobank, etc.
Read more: Razorpay raises $ 375 million for expansion and acquisitions
CEO and co-founder of Razorpay Harshil Mathur told Karen Webster that India’s demonetization in 2017 lit the digital fuse in a country known for merchant purchases using cash on delivery (COD). It also became the spark that ignited Razorpay’s business.
“[Demonitization] was a big boost for digital payments in India because suddenly nobody had cash and all the big Indian companies wanted to go digital, âhe said. âThat’s why we created this solution, to allow any business to get online in minutes, instead of days or weeks. “
By quickly creating a small suite of no-code, one-click tools for business, Razorpay quickly rose to scale and is now playing an important role in India’s digital transformation.
Noting that âIndia is full of companies that don’t really understand technology very well,â said Mathur, this made transparency and simplicity vital for product / service design.
âWe have created an ecosystem around it,â he said.
The pandemic has boosted demand for digital even further, Mathur said. Gaming, educational tech and investing companies suddenly took off as people scoured for things to do during the lockdown. Online microenterprises and the odd-job economy in India have also benefited. It was a digital turn that Mathur said Razorpay was well positioned to support.
“Small sellers [had never accepted] payments, but all of a sudden people wanted to accept online payments on Instagram, Facebook, WhatsApp, and they needed a simple click and link solution, and there we were.
As it stands, Mathur told Webster paper money is on the run, with payments in areas like food delivery now 80% digital, and travel and hospitality now almost 100% digital. % digital in India.
And switch to UPI rails fairly quickly.
âUPI is moving the cards, it is moving the wallets, it is moving almost everyone now,â he said. “It’s just huge the last few years.”
Mathur has also attributed much of its growth more recently to the early adoption of UPI and the acceptance of wallets like GPay, PhonePe and Paytm which have integrated UPI as a payment method. He estimated that, measured by the number of transactions, the UPI currently accounts for around 65% of transactions.
One rail to rule them all
Having a common national payment rail is unquestionably streamlined and simplified, Mathur said. In the case of digital payments in India, he said he believes UPI is the best payment method for making transactions using the mobile device. The great strength of UPI is the fact that it is not a proprietary technology.
“In the United States you have Venmo [and others], but they belong to [companies], and it’s not interoperable, âhe said. âUPI is open, so Google has Google Pay on it, Paytm has Paytm on it, now you have WhatsApp coming in and growing. Anyone can create an app and apply tomorrow.
This includes the Indian central bank with a digital rupee on the go.
âUPI becomes the right rail because the ecosystem is interoperable, making it easy for everyone to access and use,â he said.
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The super merchant app
With 8 million businesses on the platform, Razorpay is positioning itself as the go-to program to quickly digitize businesses, sort of a super app for merchant needs. This is a great opportunity for Razorpay to connect the system and add a lot of value to the trader, which is part of what the company will use their recent fundraiser to further develop and support.
Mathur said that Razorpay makes supplier payments; tax payments; pay; employee health insurance; and allows you to buy now, pay later (BNPL) and access working capital through bank accounts created through its neobank RazorX.
âOur essential vision is to be the one-stop financial platform for businesses, especially internet businesses, in India,â he said. “We want to get to a point where if someone starts an internet business tomorrow, they sign up with Razorpay, and we take care of whatever they need to do with the money on our platform.”
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