India’s Razorpay, one of the largest payments processing firms in the country, today announced a range of new services aimed at startups, businesses, merchants and freelancers as the Bangalore-based firm expands the reach of its financial platform in the nation.
The startup, which raised $75 million from Ribbit Capital and others in June this year, today introduced a new kind of corporate credit card and some banking services for startups and SMEs, and a new payment option for individuals to quickly receive money from their clients.
All of these services are solving some major challenges faced by tens of millions of businesses in the country. Even as startups are increasingly getting acceptance in Indian homes, banks in the nation are still wary of offering some financial services to them. Most “unprofitable” startups today can’t get a corporate credit card from a bank in India, for instance.
For its corporate credit card, Razorpay will assess other factors, such as flows and collections, to determine who is eligible, the Bangalore-based startup’s founders -- Harshil Mathur and Shashank Kumar -- told TechCrunch in an interview.
The new corporate credit card, issued by RBL Bank, will allow businesses to access credit between Rs 50,000 ($700) and Rs 25,00,000 ($34,800). If they are able to pay it back in within 50 days, they will avoid any interest.
Razorpay also announced it is launching a current accounts service. “While personal banking ecosystem in India has scaled tremendously in recent years, business banking is still old school,” said Mathur. “Most processes are still manual, and there is no communication among your invoice, payroll, booking systems. People have to deal with spreadsheet files.”
To solve this, Razorpay has built a neo banking platform. “As a business, if you want to create a current account with a bank, we take care of it. Everything -- your transactions, and payables -- happens on Razorpay’s platform and you can manage them through a single dashboard,” he said.
As part of this platform -- and also as a standalone offering -- Razorpay is offering a payroll management service. “One of the most common challenges in a business is how they handle payrolls. Most of these payrolls work with different systems such as HR and accounting. Again, you have to create spreadsheet files and provide it to the bank, which does the processing. What our goal is that we will provide one single platform to manage payments better,” Mathur added.
To work on this service, Razorpay said it has acquired payroll and HR management software firm Opfin for what a person familiar with the matter said is “a couple of millions of dollars.” Razorpay founders declined to comment on the amount.
And last, Razorpay has launched a new payment option for unregistered businesses such as mom and pop stores and freelancers. Millions of individuals in India today engage in business with one another, corporate companies, and clients overseas. For them, there exists a very limited set of options to receive payments from others and do it at a real-time pace.
Razorpay may have an answer. The company has launched a service that will allow individuals or businesses to create and send a link through text or email to their clients and receive payment in real time. When the client clicks on the link, a payment gateway loads up that supports a range of paying options. “We support 100 currencies, so a person can have their money delivered from any country,” Mathur said. Another startup -- Bangalore-based Instamojo -- offers a similar functionality.
The announcements today illustrate Razorpay’s aggressive expansion into India’s burgeoning financial services market. The startup generates about 70% of its revenue today from its core business of processing payments.
More than 600,000 businesses in India -- including giants such as airline Indigo, Bombay Stock Exchange, conglomerate Reliance, Sony, ride-hailing service Ola and budget hotel operator Oyo Rooms -- today use Razorpay’s payments processing service. The two founders said they want Razorpay to be the financial cloud for businesses.
In recent years, the company has launched lending and a range of other services. Together with neo banking services, Razorpay’s Kumar said he expects to have these generate 40-45% of revenue.
Razorpay today competes with a handful of companies, including Naspers-owned PayU and legacy firms such as BillDesk. The startup, which focused on payments for the first two and a half years, says that business has grown by 600-700% year-over-year.
"We crossed a billion dollar in payments processing in September 2017. Now we are doing 10 billion," Mathur said. "Our goal with today's announcements is to have 20-30% of our merchants join and use our current account platform."