Tag: Razorpay

Digital payments: India pips China, US, others in 2020; leads global tally with this many transactions

Banking & Finance

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UPI transaction value witnessed a growth of 18.7 per cent month-on-month to Rs 5.05 lakh crore in March 2021 from Rs 4.25 lakh crore in February 2021.

Amid Covid, India was home to the highest number of real-time online transactions in 2020 ahead of countries such as China and the US. 25.5 billion real-time payments transactions were processed in the country followed by 15.7 billion in China, 6 billion in South Korea, 5.2 billion in Thailand, and 2.8 billion in the UK. Among the top 10 countries, the US was ranked ninth with 1.2 billion transactions. The transaction volume share for instant payments India, among real-time transactions, was 15.6 per cent and 22.9 per cent for other electronic payments in 2020, according to a report by the UK-based payments system company ACI Worldwide. Importantly, paper-based payments continued to have a considerable share of 61.4 percent in India.

However, this is expected to change by 2025 as volume shares for instant payments and other electronic payments are likely to grow to 37.1 per cent and 34.6 per cent respectively. Consequently, the share of paper-based transactions would contract to 28.3 per cent. Moreover, the share of real-time payments volume in overall electronic transactions will exceed 50 per cent by 2024. “India’s journey of creating a digital financial infrastructure has been characterized by collaboration between the government, the regulator, banks, and fintechs. This has helped to advance the country’s goal of enabling financial inclusion and also provided rapid payments digitization for citizens,” said Kaushik Roy, VP and head of product management, Asia, ME and Africa, ACI Worldwide in a statement.

Also read: Radhakishan Damani’s Rs 1,000 crore home: DMart founder buys new property at Mumbai’s Malabar Hill

India’s digital payments market led by Paytm, PhonePe, Pine Labs, Razorpay, BharatPe, and others on the B2C and B2B sides has surged during the pandemic even as incentives such as cash backs, rewards, and offers have helped businesses to attract more customers. Moreover, policy frameworks such as Pre-Paid Instruments (PPI), Universal Payment Interface (UPI) by the NPCI apart from Aadhar, and the launch of BHIM-app have driven the financial inclusion and improved the payment acceptance infrastructure in the country in the past few years.

According to another report by the Indian Private Equity and Venture Capital Association (IVCA) and Ernst & Young, digital payments in India is expected to grow at 27 per cent CAGR during the FY20-25 period from Rs 2,153 lakh crore transactions in FY20 to Rs 7,092 lakh crore in FY25. UPI transaction value witnessed a growth of 18.7 per cent month-on-month to Rs 5.05 lakh crore in March 2021 from Rs 4.25 lakh crore in February 2021 while transaction volume rose by 19 per cent to 2,731.68 million from 2,292.90 million during the said period, according to data released by National Payments Corporation of India (NPCI).

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ICICI Bank launches instant EMI facility on internet banking, BFSI News, ET BFSI

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Private lender, ICICI Bank has launched an instant EMI facility on its internet banking platform. called ‘EMI @ Internet Banking’, the facility aims to offer increased affordability to millions of pre-approved customers, as it enables them to convert their high-value transactions up to Rs. 5 lakh into easy monthly instalments.

It also brings in enhanced customer experience as customers get the benefit of EMIs instantly and in a fully digital manner.

ICICI Bank is the first in the industry to introduce instant EMI facility on its internet banking platform. The Bank has tied up with BillDesk and Razorpay, leading online payment gateway companies to offer this facility.

Presently, the ‘EMI @ Internet Banking’ has been enabled for over 1000 merchants in categories like online shopping portals, insurance, travel, education- school fees and electronic chains.

The Bank endeavours to partner with more payment gateway companies, merchants and add categories under this facility in the near future.

Sudipta Roy, Head- Unsecured Assets, ICICI Bank said, “We have observed that many of our customers undertake high-value transactions for payments of insurance premiums, school fees, purchasing electronics, or paying for vacations through the Bank’s internet banking platform. Our latest offering of ‘EMI @ Internet Banking’ brings in enhanced affordability for customers by providing them with flexibility of EMIs for high value transactions.”

He added, “It also offers immense convenience to the customers as the entire experience is completely digital and instant. We believe this facility will empower millions of our pre-approved customers to purchase or shop for their needs in a completely contactless, instant, digital and secure manner.”

Ajay Kaushal, Co-founder and Director BillDesk said, “This will help ICICI Bank customers easily finance their online purchases using convenient monthly instalment payments across merchants supported by BillDesk.”

Khilan Haria, Head- Payments Product, Razorpay said, “This EMI on internet banking feature will be a major value-add to our partner businesses by providing them with higher conversion rates and benefit end-consumers by now making large payments easier and affordable.”



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Digital payments to skyrocket 3X to over Rs 7,000 lakh cr by FY25; mobile payments to see highest growth

Personal Finance

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The maximum growth is likely to be witnessed in the mobile payments segment at 58 per cent from Rs 25 lakh crore to Rs 245 lakh crore.

The nascent yet fast-evolving digital payments industry in India, propelled by policy framework and technology penetration, is expected to grow at a compound annual growth rate of 27 per cent during the FY20-25 period. The growth in retail electronic payment systems including National Electronic Fund Transfer (NEFT), mobile banking, and development of payment acceptance infrastructure is likely to boost digital payment transactions from Rs 2,153 lakh crore in FY20 to Rs 7,092 lakh crore in FY25, according to the India Trend Book Report 2021 by the Indian Private Equity and Venture Capital Association (IVCA) and Ernst & Young.

The digital payments market, which has been led by companies such as Paytm, PhonePe, Pine Labs, Razorpay, BharatPe, and others on the B2C and B2B sides, has surged expeditiously with businesses offering cash backs, rewards, and offers to woo customers. Moreover, the recent pandemic has stimulated the demand for digital wallets as contactless payment is reckoned as the new normal protocol. Policy frameworks, on the other hand, such as Pre-Paid Instruments (PPI), Universal Payment Interface (UPI) by the NPCI apart from Aadhar, and the launch of BHIM-app have driven the financial inclusion and improved the payment acceptance infrastructure in the country.

In terms of segment-wise growth, the payment gateway aggregator market is expected to grow at around 19 per cent CAGR from Rs 9.5 lakh crore in FY20 to Rs 22.6 lakh crore in FY25 while the merchant payments segment is likely to see 52 per cent growth from Rs 4.7 lakh crore to Rs 33 lakh crore during the said period. The maximum growth is likely to be witnessed in the mobile payments segment at 58 per cent from Rs 25 lakh crore to Rs 245 lakh crore.

Also read: CEA Krishnamurthy Subramanian: Mindset of always asking what govt can do for startups should change

Meanwhile, the overall fintech market, which also catered to online lending, wealth management, insurance technology, etc., is likely to grow from Rs 1.9 lakh crore in 2019 at a CAGR of 22.7 per cent during the period 2020-25. While some fintech subsectors such as MSME digital lending have been facing temporary downturn, others including digital payments and insurtech have benefitted from Covid-induced digital adoption among consumers. According to the IVCA report, India has emerged as Asia’s biggest destination for fintech deals, leaving behind China in the quarter ended June 2020. Amid COVID-19, India saw a 60 per cent YoY increase in fintech investments to $1.5 billion in 1H20.

“Covid-19 pandemic has accelerated the shift toward a more digital world. It has changed the ways businesses were done and technology is at the forefront of these changes. Opportunities for internet and tech companies have increased multifold in the last one year. Wide penetration of internet and lower internet cost has complemented the digital and technology trend for consumers and have changed the ways of shopping, education, agriculture, retail, logistics, finance, health, etc. businesses,” said Ankur Bansal, Co-founder and Director, BlackSoil.

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Razorpay announces 3rd largest ESOP sale of $10 million for 750 current, former employees

Banking & Finance

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Fintech unicorn Razorpay, on Thursday, announced its third ESOP (Employee Stock Ownership Plan) buyback program worth $10 million (₹73 crore) for its 750 employees.

All existing and former employees of Razorpay who hold vested stocks will be eligible to sell up to 33 per cent of their vested ESOP shares. Sequoia Capital India and GIC, two of Razorpay’s key investors will be the buyers involved in this development.

ESOP buybacks in the start-up industry have been a source of significant wealth creation for employees but it is not something that companies usually offer as an annual event. Razorpay is one of India’s youngest start-ups to have facilitated the ESOP buyback program consequently for the last three years.

The share sale is expected to benefit employees across roles – from team leaders to support executives to administrative staff. Razorpay’s 1,350 people team raised their $100 million Series D funding in October last year and the ESOP buyback plan is a reflection of the faith that the company and its employees have instilled in each other.

Also read: India attracted $2.7 billion in fintech investment in 2020: KPMG

“We’ve always said and believed that our employees are the reason for every success that we have had. They turned an unprecedented year into one of the strongest years for Razorpay. And this ESOP Buyback is our little way of giving back to the employees for their contribution and a form of wealth creation for all, as it is important for us to ensure that our employees also grow along with the company. Our current and former employees, even as young as 23, will be eligible for this incentive, irrespective of rank. The compensation will be rolled out to all our employees, be it software engineers, product managers, customer experience agents, or administrative staff. I believe there’s no better time than now to recognise the team for all their efforts and having trusted us in this journey,” said Harshil Mathur, CEO and co-founder, Razorpay.

Razorpay’s first liquidity event through ESOP encashment occurred in November 2018 for its 140 employees then. The transaction was done at a 50 per cent premium to the valuation. The second ESOP sale event occurred in November 2019, during which approximately 400 employees were eligible. To date, the company has awarded ESOPs to 1,000 employees, with current employees holding a majority share.

Also read: Mastercard and Razorpay partner to make digital payments more accessible for MSMEs and startups

Currently powering online payments for more than 5 million small and large businesses such as Facebook, IRCTC, CRED, Zerodha, Indigo among others, Razorpay has clocked in a healthy growth rate of 40-45 per cent month-on-month and is geared to increase its merchant count to 10 million by next year.

Razorpay registered 3X growth in payment volume through SMBs that went online for the first time during Covid in 2020.

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Mastercard and Razorpay partner to make digital payments more accessible for MSMEs and startups

Banking & Finance

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Mastercard and Razorpay have launched a strategic partnership to empower Indian micro, small and medium enterprises (MSMEs) in digitising their operations, maintaining business continuity in the challenging environment and preparing for the future beyond cash.

“SMEs and startups would require establishing a digital footprint to build their customer base and meet demand for secure, convenient and touch-free transactions. With the partnership, Mastercard and Razorpay will work together to cater to the needs of MSMEs,” Mastercard said in a statement on Tuesday, noting that the Covid-19 pandemic has accelerated the adoption of digital technologies.

Also read: AGS Transact partners Mastercard for ‘contactless’ cash withdrawals at ATMs

“We are excited about strengthening our partnership with Mastercard, the global payments and technology leader, in furthering digital adoption and equipping millions of businesses, especially in tier 2 and 3 cities, with industry-leading technologies that will help ensure business resilience,” said Amitabh Tewary, Chief Innovation Officer, Razorpay.

“Mastercard is excited to extend its partnership with Razorpay, India’s youngest unicorn, on a strategic level,” said Rajeev Kumar K, Senior Vice President, Market Development, South Asia, Mastercard.

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