Razorpay and Digital Payment Era


Managing account is a herculean tasks for businesses these days. Advent of new age technology to provide multiple payment options, quick transformation of debtors to creditors and vice versa, keeping up with payments, assessing working capital requirements etc., are just a few of hundreds of hassles. Owing to the complexities, companies / startups often looked to hire experienced accounts or hire chartered accountancy services, whose dependency has been questioned over and again by auditors and authorities. Razorpay is one of the best payment gateway in India.

Now, with the fintech arena evolving itself in a rapid manner, we are witnessing smart algorithm based programs that not only take care of the payment / remittance issue, but also keep up with the firm by managing their stock / turnover and tracking working capital requirements.

There is an incredible growth happening in fintech space with firms like Razorpay automating even basic problems of business of having payment mechanisms. Let us find out how these payment startups are transforming the way we do transactions today.

Ever since the new age government policies and internationalisation of economies have opened the floodgates and made it easier to do transactions digitally, it has increasingly becoming tough for merchants to handle multiple modes of payments.

Earlier there was cash, with Credit Card and Debit Card now with the introduction of UPI & digital wallets consumers can pay through their mobile directly into the merchant’s mobile or bank account instantly, multiply all this into more than 50 banks which offer all these services and there comes the roadblock with a merchant as to how many payment providers can he provide to the consumer. The merchant can’t just stick to accepting cash as he will miss out on customers who pay with cards or QR codes. It has become imperative for merchants to adapt to growing multiple payment methods and reconcile their books accordingly. Imagine managing each statement, keeping track of every transaction, this is where payment management systems like Razorpay step in.

What is Razorpay?

Razorpay was started by IIT Roorkee alumnus to enable seamless payments and management of funds. It has a whole product suite for merchants of each category and size to suit them according to their size. It was founded to simplify payments. Razorpay today offers a full product suite to manage, collect and disburse payments digitally. Its core features are:

  1. Payment Gateways:

Imagine shopping online, when you go to the checkout page and find your preferred mode of payment which then redirects you to your payment portal, this integration of connecting more than hundreds of banks and wallets with the merchant and getting payment confirmation from them and transferring the amount to the merchant that too within seconds and with security is important. This process is of payment is handled by a payment gateway, offered by Razorpay. A merchant having his own e-commerce website has to integrate Razorpay to his portal and Voila! Now the merchant accepts almost all types of payments and he does not need to worry about any confirmations as everything is managed by Razorpay.

  1. Payment Links:

Razorpay enables unique dynamic link creation where a vendor can generate custom links for his own customers and share it with them instantly. Imagine your customer is not in the same city and you have to receive a payment, will you go traditional of quoting your bank account details and IFSC code or will you provide your customers with dynamic payment options where they can pay with any payment mode of their choice. You can create payment links through APIs or dashboards or make them partially payable as well, right according to your needs.

  1. Invoices

Tired of making custom invoices out of excel or just copying formats from the web and making it as per your choice. With Razorpay you can create your own invoices on the fly with custom embedded payment links (the ones explained in the point above) where the customer can simply click and pay with one tap. These invoices are GST compliant too plus they can be automated every month and every creation you instantly notify your customer over email and SMS.

  1. Working capital requirements

Falling short of working capital of your day to day businesses, with Razorpay Capital, you can instantly get money within 12 hours. Not just on the capital side, the company helps in getting instant settlements for your business so that there are no working capital gaps and business can go in free flow. Razorpay through its partner NBFC’s and banks aims to provide instant capital to your business through its in-house developed Alternative Credit decisioning system. This credit decisioning system makes an analysis of your transactions through your bank statements and gives you a credit score, this credit score is then passed on to the partner NBFC and banks based on which loans and instant capital is provided to the businessman.

  1. Payment disbursement, management and instant settlements

Sending reminders to the client for payment is a standard thing nowadays. But what can you do you to shorten your cash cycle? With the help of Razorpay, you can better manage your cash inflows and outflows such that your capital never runs dry.  With instant bill creation and a notification to the customer of the bill with embedded payment links, the customer can choose to settle instantly rather than waiting for payment details of the merchant. You can instantly manage salaries with just one click of a button, all the payments will be done on an expedited basis and automatically by setting some rules. Razorpay’s dashboard gives you an insight on how payments are occurring in your business how many payments are due, how many are to be settled, it gives you an overall financial view of the cash lying in your business.

  1. Razorpay X

With Razorpay X, Razorpay wants that you as a business outsource all your financial operations to them and manage your core operations. Razorpay X challenges the traditional business banking approach by giving you a financial CRM with in-depth analysis and actionable insights and automated with API banking from which you manage salary payouts, vendor payments, refunds, cashback and much more, It is like getting a birds-eye view of the cash management position of your business to never run short of cash.

The business model

With all these services you might be wondering how does Razorpay really earn. They follow the same strategy as Credit card companies do, they charge subscriber of this plan. In their standard plan, they charge a 2-3% transaction fee for every transaction that goes through their product with no maintenance and no annual fee whatsoever.

What does this mean for you as a business?

With all these financial management startups entering the space and managing all your finances end to end, the business can focus on their core functionalities without looking back at these hassles. Also, these startups are helping businesses in adapting to gen-next payment interfaces, gone are the days where you need to wait for days to get payments, now is the time for instant settlements to improve the cash cycles of businesses. Adapting to these services is the only option for businesses to live in this dynamic world and give their consumers the whole bouquet of services.

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