UPI Continues a Strong Game, Albeit a Slight Drop in November

UPI november data Razorpay

UPI has become somewhat of a default payment mode for most people in India. In the last few months, UPI recorded the highest number of transactions, overhauled cards, and other payment modes, and became the most preferred one. If you’re interested to find out what happened in November, hang on tight. 

With 800,000 businesses onboard, Razorpay oversees huge volumes of P2M transactions every day from an umpteen number of businesses like BookMyShow, IRCTC, Swiggy, and more. To gather insights, we have only considered P2M transactions of UPI.

Note: All insights in this story are based on transactions held on the Razorpay platform

UPI transactions in the last 6 months

Like we mentioned earlier, UPI has been climbing up bagging the most number of transactions. But in November, UPI saw a slight dip as compared to October, although it was almost on par with September in the number of transactions (saw a growth of 39.56% growth from August to September). 

UPI november data Razorpay

UPI vs other payment modes

Although UPI didn’t see as many transactions, it still remained to be the most favored by Indian consumers.


  • UPI contributed to 42.61% of the total number of transactions that were carried out on the Razorpay platform
  • Cards made a comeback from the previous month by contributing a bigger chunk of payments at 41.87%
  • The third most popular payment mode amongst Indian consumers was netbanking, at 10%

UPI app-wise contribution

Since UPI was the preferred payment mode in November, let us understand how some of the UPI apps contributed.

UPI november data Razorpay

  • Again, Google Pay was the number 1 player in the market, contributing to 56.61% of the total UPI transactions
  • PhonePe held its position from the previous month by handing out 26.26%
  • PayTM was next in line at 6.96%

UPI apps – a closer look

Contributions aside, let us jump in to understand how much our UPI apps grew in November.

UPI november data Razorpay

  • Unlike before, the ICICI UPI app showed the highest growth in November, at 8.47%, followed by Axis and HDFC UPI apps at 6.24% and 5.17% respectively
  • Google Pay although being the most used UPI app, fell by 19.15%
  • PhonePe and BHIM also took a downward plunge by 3.92% and 3.99%

UPI transactions – a geographical split

As always, we wanted to see where all the UPI transactions came from. Here’s what we found.

UPI november data Razorpay

  • 29.92% of the total UPI transactions made in November came from Karnataka
  • Maharashtra contributed 13.98% while Delhi and NCR pitched in 7.9% 

While we are still looking into where UPI transactions, let us take a look at the tier-wise split.

Will UPI make a comeback next month?

UPI has been at the forefront of fintech innovations, pushing a great deal of digital payments in the last few years. The impact UPI has made is huge, reaching so many people from across India and enabling them to make digital payments.

Let’s dive deep next month and draw new insights from the transactions on our platform.

See you then!

Fraud Prevention Solution Thirdwatch is Trending on Shopify!

ecommerce fraud prevention solution Thirdwatch from Razorpay

Fraud prevention application Thirdwatch helps E-Commerce businesses on Shopify save a lot of money on Return-to-Origin (RTO) costs especially for Cash on Delivery (COD) orders. Before we get into the details of how to install Thirdwatch and how it can be effective, allow us to explain the advantages and features of Shopify as an e-commerce business hosting platform.

A little over a decade ago, if you had told us that there was one website that garnered over 218 million buyers from 175 countries in just a year, we would’ve laughed at the sheer uncertainty. 

But, things have changed beyond imagination in the last decade. As we’re hitting the ceiling with hypercompetitive creativity, it’s important to take a step back and look at how we got here.

In this article, we’ll be speaking about how a single-player, Shopify has transformed the e-commerce industry as we know it and most importantly, how you can use the channel to supercharge your business.

What does Shopify do?

To start with, Shopify is an all-in-one platform to start, run, and grow an e-commerce business. India is a country majorly driven by small and medium businesses and for small players to grow, there needs to be a platform that allows them to run their business seamlessly. This is where Shopify steps in.

With a Shopify account, here is the multitude of things that e-commerce merchants can do:

  • Start your business journey: Find a business name, buy a domain, and create a brand with Shopify’s free tools suite.
  • Sell everywhere: Use one platform to sell products to anyone, anywhere—online with your e-commerce store, online marketplaces, and social media, and in-person with point of sale.
  • Market your business: Take the guesswork out of marketing with built-in tools that help you create, execute, and analyze campaigns on Facebook and Google.
  • Manage your operations: Use a single dashboard to manage orders, shipping, and payments anywhere you go. Gain the insights and knowledge you need to grow.

What is the Shopify App Store?

Once you’ve set up your Shopify account, it’s easy to find a ton of features and plug-ins designed to accelerate your business. Shopify’s App Store is filled with thousands of applications designed to cater to your every business need.

And that’s Thirdwatch’s entry into this article! The protagonist of this story has finally come into the limelight.

The e-commerce market in the world is growing at a rate faster than we can comprehend. With unforeseen growth comes unforeseen responsibilities. E-commerce sales worldwide are predicted to reach $632 billion by 2020!

But, do you know what’s bigger than the market itself? It’s the implications of fraud that come with it. As the trade grows, it’s only fair to assume that the online market has become a breeding ground for online fraudsters to innovate their tactics.

E-commerce fraud is one of the least talked about things for an industry so big. Most merchants assume the losses or fraud instances experienced during their stint is just “cost of doing business”. 

A closer look at e-commerce fraud

Here’s the thing– e-commerce businesses don’t have it easy, especially the small ones. In a hypercompetitive e-commerce environment, the only way to stand out is to offer exceptional customer satisfaction.

To meet with the mounting expectations of customers, businesses often don’t have a choice but to ship risky orders, in the fear of losing out on a genuine customer. This can often put a toll on their budget, as Return-To-Origin (RTO) orders take up the cost of logistics back and forth, often leading to losses. 

Here’s how e-commerce companies lose money in processing these orders:

  • Forward & reverse logistics
  • Blocked Inventory (Items stuck in transit)
  • Physical quality check and re-packaging of returned items
  • Increased probability of damage to fragile items, and hence more money spent in shipping them
  • Operations costs in processing these orders

We took the time out to check out the RTO numbers and their true impact on business. Here’s what we found– in case of COD orders, the percentage of RTO orders can be as high as 40 percent!

Imagine spending double the shipping costs for 40% of all your orders, let alone the opportunity cost on the blocked inventory and operations costs to handle them.

Read more: Is 30% RTO the Cost of Running an E-commerce Business?

How can Thirdwatch help reduce RTO costs?

Thirdwatch is a simple plug-in that helps you detect fraud orders, impulse purchases, non-deliverable addresses and flag risky transactions in real-time and finally, improve profitability. 

And what’s better? If you’re a Shopify merchant, Thirdwatch integration can be done in minutes, it’s that easy! Here are the simple steps:

Step 1: Install the Plug-in on the Shopify dashboard

Step 2: Sign up on the Thirdwatch dashboard with your account ID and password.

Step 3: Your centralized dashboard will be updated with the order status, along with actions for decision making. Start detecting fraud and saving money!

Thirdwatch runs on Artificial Intelligence and Machine Learning to help identify fraudsters across different platforms. Machine Learning technology offers the right solution as it addresses all the challenges in preventing fraud — scale, complexity and changing patterns.

For example, by adding the price of the user’s phone device or categorizing an address as five stars or one star, we turn meaningless data (phone model) into actionable information. This increases the accuracy of the red or green flag that the machine learning models generate for every transaction.

Network effects can be harnessed by pooling in anonymized data to predict and prevent fraudulent behaviour. This de-incentivises and penalises fraudulent behaviour across the ecosystem.

Moreover, e-commerce firms will truly know their customers so that goods are delivered to a person not merely to an address.

Most importantly, RTO will no longer be just the “cost of doing business”.

Here’s what Shabaaz, Founder of Nicci SkinCare, an established online cosmetics store on the Shopify platform, had to say about Thirdwatch.

We’ve been in the business for a few years now and Return-To-Origin orders are a big problem for businesses like ours. Using Thirdwatch has helped us in dealing with incomplete addresses and in detecting impulse and fraudulent orders. Our RTO rate (significantly) reduced by 30% because of Thirdwatch and we saved over INR 1.5 lakhs monthly in shipping costs! Highly satisfied with the product 

Curious to know more about how we’re solving this for merchants? Get in touch with a Thirdwatch expert today!

Introducing Razorpay Partner Program

razorpay partner program

The payments landscape in India is at its most evolutionary path. Ranging from consumer behaviour to government and regulatory initiatives, the payments landscape is changing rapidly and how! 

As India embraces digital payments, the need of the hour is to not only for businesses to provide digital payment options to their consumers, but for more businesses to go digital as well. Digitization of payments is a win-win for everyone involved, after all.

Having already offered digital payment solutions to over 3,50,000 businesses in India, we believed it was time for us to build an affiliate program for partners to bring more businesses on board the digital payments ecosystem. 

Thus introducing – the Razorpay Partner Program.

What is Razorpay Partner Program?

Razorpay Partner Program is designed in such a way that the partners, who build solutions for businesses or consult with them, can use Razorpay’s payment stack to enable more businesses to accept payments online.

This reseller program truly widens the horizon for all kinds of businesses! What’s more – this affiliate program is not limited to business partners alone, even unregistered businesses and individuals can use it to earn commissions by referring businesses to Razorpay.

The pre-launch story

We’ve grown and learned a lot since the inception of our partner program in late 2017 and we are happy to add more benefits for helping businesses connect to the world of digital payments. 

Over 800 partners like MSwipe, Limetray and UrbanPiper work with Razorpay to let businesses and individuals accept payments through direct integrations with their products. Other companies like Zoho, Juspay, and Intuit facilitate payments on their platforms for their connected businesses through our API infrastructure.

API and payment suites

Razorpay APIs, technical and operational infrastructure help partners bring businesses online and enable new types of businesses to go digital. We help handle everything related to payments by complying with RBI guidelines, providing 24×7 payments and integration support, and meeting product requirements of 30+ industries and 350K+ businesses.

Moreover, registering for Razorpay’s Partner Program is free and takes less than 30 seconds! If anything, we are currently paying out the highest commissions in the market, which ensures the partners are incentivized to connect more and more businesses to Razorpay. 

Start referring and earning

Razorpay’s partners get commissions for the transactions made by their merchants. A point to be noted for partners involved in referring and managing merchant payment stack – the transactions have to be initiated by the partner for the partner to get a commission. The partners will need to send invoices to Razorpay on the 1st of every month to get their commission.

Since its inception, Razorpay has paid out over Rs 1 crore in partner commissions to over 100+ partners. As we look to scale up our partner ecosystem, we also provide additional incentives so that Razorpay and its partners are incentivized to share a common vision – bringing more businesses online! 

Partnering with Razorpay helps you offer your customers a complete suite of payment solutions and get rewarded for it in the form of commissions.

What our partners say

We’re delighted to see the payment experiences that our partners have built and we have designed our program to enable them to build and launch faster, reach more customers, and operate at scale.

Here’s what Anirban Majumdar, Co-founder of UrbanPiper, has to say, “Our experience with Razorpay has been remarkable so far. We partnered with Razorpay when they were onboarding their first clients. They have been highly reciprocative to our feedback and have maintained a good relationship with us through the years.”

Preferential training and support

Partners get access to documentation around seamless integration with Razorpay’s product suite. Moreover, we assign designated POCs to help partners add merchants, integrate the payments infrastructure for them, and earn commissions as well.

And we are just getting started. Our aim is to build more products and resources for our partners in the future. 

Not yet signed up as a partner? Sign up here

Explore more about Razorpay Partner Program or get in touch with us here.

From 2,880 Minutes to 60 Minutes – Never Fall Short of Money with Razorpay Early Settlements

razorpay early settlements

What does a business need the most to scale and grow from one stage to the next? Customers? Of course! Employees? Sure. Continuous development of their offerings? The answers can be many. But one of the most important requirements is working capital. 

Working capital is required for numerous reasons. And it is important because easy access to money for a business’s day-to-day activities can help improve business convenience greatly. This is the primary reason behind the launch of our new feature – Early Settlements.

The long process of processing settlements is a burning problem in the fintech industry. With banks settling to Razorpay 24-48 hours after the transaction is made, it gets challenging (and risky!) to settle the money before hand. However, asking people to wait for a week for an amount processed in 5 seconds is not just unfair but a poignant question on the technical advancements being made in the fintech ecosystem.

Out came Razorpay Early Settlements!

What is Razorpay Early Settlements?

With Early Settlements, you get access to your funds on the same day instead of your traditional or default settlement cycle. Razorpay Early Settlements helps you reduce your settlement period from T+3 (or T+2) days to within a few hours (from the time of transaction), thus enabling your business to avoid cash-flow challenges and prepare better for working capital requirements. 

razorpay early settlements

A ready inflow of cash that will help you amplify your business, and meet day-to-day cash requirements without any hassles. 

What are the benefits of Early Settlements for your business?

  • Easy and early access to your money
  • Reduction in daily cash crunch and increased cash flows
  • Better management of inventory and stock
  • Payments to creditors and vendors without any delays

Can the settlements be done at any time of the day on any of the days?

Yes, they can. Early settlements can be rolled out on any of the business days. We are also working towards enabling 24×7 instant settlements (even on bank holidays) through IMPS payouts. 

Razorpay levies a small fee that is deducted from the merchant’s settlement balance. This fee is primarily charged because Razorpay has to bear the subsequent cost of processing the early settlements by taking a loan from loan providers. This deduction takes place only if you decide to process the settlements instantly or on the same day.

Who is Early Settlements for?

It is technically for every business onboarded on Razorpay. Primarily in the last 6 months, we have seen 30% of e-commerce businesses that have gone live with Razorpay availing the Early Settlement functionalities to power their daily vendor payouts. This is followed by 17% of financial services businesses and 15% of IT services companies. For IT services, a majority of the users are freelance designers or web developers who want quick access to capital for the work they have done. 

We carry out risk checks (around refund rates, chargebacks, etc) before offering this feature to any business. To sum up, though we have seen a high traction among the industries mentioned above, businesses from almost every industry has availed Early Settlement and it has seen a high repeat rate. 

How to enable Early Settlements?

Just drop a mail to capital.support@razorpay.com or raise a support ticket at https://razorpay.com/support/ and we will get in touch with you at a time comparable to the time required to make a payment with Razorpay. 

To explore more about Early Settlements, click here.

Also read: How Automated Payouts are Helping SMEs

Ready to Start Accepting Payments Online?

  • Quick Onboarding
  • Saved Card Database
  • Razorpay Checkout
  • 24×7 Support

How to Choose the Right Payments Solution for Your Business

razorpay how to choose the right payments solution

Choosing the right payments solution that supports your unique business case can be quite difficult and demanding. And, this is especially true if you have more than one use-case for your business. So, without further ado, let’s talk about the different payments solutions that you can opt for from the Razorpay product suite. To get there, let’s go through some basics.

What is a payments solution?

A payments solution (payment gateway and related products) is a service that receives an online payment request from your website. It further validates the payment details of your customer and checks for sufficient funds in their account for them to make the purchase.  Then, the transaction is authenticated, and the funds are transferred from your customer’s account to your merchant account.

[Suggested read: What is a Payment Gateway and How Does it Work]

What is the need for a payments solution?

If you’re an online business, you know for a fact that you have to accept payments from your customers. In today’s time and age where cash is simply not the best option; choosing the right payments solution is your way to go. And, it comes with a multitude of advantages.

Provide good payments experience

Most consumers are getting exceedingly comfortable with online payments. If they’re getting a cab ride or going to the movies, online payments have pretty much disrupted e-commerce to a great extent. And, the payment process is quite simple too. Consumers prefer cards, UPI, EMI, and other payment modes over cash to make their online purchases. 

Most payments solutions provide multiple payment options for consumers to choose from. By choosing a payments solution, you provide a good payments experience to your customers by allowing them to pay online, using the payment mode they’re most comfortable with.  

Accelerate the process

When your customer chooses to pay online, you don’t have to wait a long time to start processing their purchase. This also confirms that they’re a legitimate buyer who’s interested in your product, and not conning you by simply placing an order.

Your customer need not wait too long to receive their purchase. Their transaction takes a few seconds to go through, resulting in a quick confirmation of their purchase. A payments solution also helps improve cash flow for your entire business.

Make informed business decisions

Using a payments solution allows you to have complete control over the customer data you’d like to capture, to better assess your business strategy. Further, you can manage all your payments, refunds, transfers, subscriptions, webhooks, invoices, and more, all in one place (dashboard).

Based on the transactions and captured customer data, you’ll be able to receive key statistics based in real-time. You also get access to insights that can help you make better business decisions.  With different views, you can easily generate customizable settlement and reconciliation reports. 

Open your business to the international market

Accepting payments not only locally, but internationally also becomes a cakewalk with the right payments solution. This helps you open revenue streams from many countries, helping improve cash inflow. 

A good payments solution also supports transactions in many different currencies, while converting payments into your base currency. All the payments you receive in foreign currencies are also settled in your base currency. 

[Suggested read: How to Choose the Best Payment Gateway for Your Business

Razorpay’s payment solutions for your business case

Alright, now that we’ve gone over the fundamentals, let’s jump right into understanding the different payments solutions, and how each one of them can apply for your business case.

Razorpay is the only converged payments solution company in India that allows your business to accept, process, and disburse payments via its product suite. With Razorpay, you have access to all payment modes, including credit and debit cards, UPI, and popular mobile wallets.

No matter what your business case is, Razorpay has a payments solution for you. Ideally, you’d want to choose the payment solution that supports your business case.

Payment Gateway – All payments on website and app

payment gateway - Razorpay payments solution

Razorpay Payment Gateway works best to accept payments on your website or app. The PG easily integrates with your system while providing you with a completely online onboarding experience. 


Accept all payment modes – From domestic to international, Razorpay supports the most extensive set of payment modes. Credit cards, debit cards, UPI, EMI, mobile wallets, and netbanking. You name it. We got it!

Checkout and global card saving – Say goodbye to asking your customers over and over to provide their payment details. 

Developer friendly – Razorpay PG offers robust, clean, and developer-friendly APIs, with plugins and libraries for all major languages and platforms.

Learn: Boost your conversions with Flash Checkout Provide your customers with a seamless payments experience with Razorpay Payment Gateway.

Payment Links – Create & send links to accept payments without integration

Businesses sometimes face the problem of upfront money collection and delayed payments from their customers. This can severely affect cash liquidity. Razorpay Payment Links is your way to go to steer clear of this problem.


Batch upload – Create and share Payment Links for hundreds of your customers in one go by uploading a .csv or .xlsx file with customer and payment details. Save time and effort in issuing Payment Links with reduced manual errors.

Partial payments – Provide your customers with the flexibility to make payments in parts against large orders, as an upfront token amount or an advance payment instead of making the entire payment at once.

Create Payment Links on the go – Razorpay’s free browser extension helps you create and share Payment Links via email, Whatsapp, Facebook Messenger and other online channels with ease.

Tidbit: Payments fail for various reasons. And, Payment Links works best to help your customer go over the transaction again. Simply create and send the Payment Link over SMS or email.

[Suggested read: Why do Online Payments Fail?]


Getting paid is simply a Link away!

Payment Pages – Customized, hosted pages to collect payments

payment pages

Offering online payments to your customers can sometimes be daunting. Creating a website, hosting it, integrating a payment gateway may consume too much of your time and resources. Razorpay Payment Pages is specifically designed to accept payments online, even for a business that doesn’t have a website or an app.

You can effortlessly create a Payment Page in less than 5 minutes, go live and start accepting payments from your customers, without any support. Create your own Payment Page from scratch or choose from one of the templates that are already available to you.

You can customize this Payment Page to suit your branding by including your logo and your brand colors.

Learn: How Razorpay Payment Pages can enable your business

See it, believe it — Payment Pages demo

A few use-cases for Payment Pages

To further help you understand how Payment Pages can be used, here are some use-cases.

1. Events and tickets – Our hosted Event Registration Payment Page is a quick and efficient way to register event attendees online. 

Learn: How to Sell Event Tickets Online Without a Website

2. Accept donations – Razorpay’s hosted Donations Page is the way to go if you’re raising money for a good cause. This saves you valuable time, allowing you to focus on the cause. 

Learn: Accept Donations the Easy Way

3. Sell products – Take orders around the clock using our Online Order template.

Learn: Sell Online Without a Website

4. Fee collection – Collect fees within seconds with our hosted form, without any paperwork. Let’s worry about simplifying payments for you!

Subscriptions – Collecting recurring payments made easy

subscriptions Many companies are turning towards subscription models to reduce periodic collection cost, increase monthly recurring revenue, reduce churn, and offer a better user experience.  With Subscriptions, you can offer your customers plans with automated recurring transactions on many payment modes.

[Suggested read: Subscription Economy: Business Impact of Rapidly Changing Consumer Needs]


Run on autopilot – Link your customer to a plan, create a subscription, and leave the rest on autopilot to work best for you.

Easy ReportingTrack all your subscriptions and make informed decisions using dashboard reports.

Handle edge casesRazorpay takes care of all scenarios such as declined card, retries on a failed transaction, change of card, etc.

Own customer experiencePersonalise the customer experience by communicating the subscription status and prompting the next steps.

More benefits of Subscriptions

You can onboard subscribers for your services from all around the world. Razorpay’s Subscriptions supports 100 currencies!

  • Offer your customer the option of a trial period with a subscription plan that automatically starts charging at the end of the trial period
  • Charge your customers a one time fee at the time of creating subscription before the actual billing starts
  • Add charges easily for any overhead expenses, extra services used etc. in the billing cycle
  • Allow your customers to upgrade or downgrade their subscription plans anytime they want, with proration
  • Offer your customers a variety of payment methods to choose from for the subscription. Subscriptions supports credit cards, debit cards, e-mandate, and more.

 Keep your customers coming back for more with Razorpay Subscriptions.

Smart Collect – Automate NEFT, RTGS, IMPS payments

Razorpay smart collect payments solution

Does Your Business Collect NEFT/RTGS Payments? If so, you’d know that reconciliation is a huge problem – it’s manual, tedious, time-consuming and error-prone, leading to poor accounting of cash flows. 

Razorpay Smart Collect is a powerful system to easily automate reconciliation for NEFT/RTGS payments through a real-time virtual account and Virtual UPI ID system. Create as many virtual accounts as you want and receive one or many payments per virtual account. Easily customize these as per your business use case.


One time payments – Accept a single, large payment from a customer via NEFT, RTGS or IMPS. Close the account as soon as you receive it. 

Regular payments – Create dedicated virtual accounts for each customer and easily keep track of each incoming payment.

Event-based payments – Create unique virtual accounts for each campaign, efficiently segregating the incoming payments for maximum control and visibility. 

Seamless Refunds – Send out full or partial refunds to customers via Dashboard & API and your customers will receive it directly in their bank accounts. 

Custom Account Numbers – Create account numbers the way you want. Highlight your company name or assign account numbers specific to customer IDs or any other custom fields.

Benefits of using Razorpay Smart Collect

  • Generate Virtual Accounts and Virtual Payment Addresses on-demand and accept payments via bank transfers or UPI
  • Create unique VA and VPA tagged to individual customers
  • Manage payments through Merchant Dashboard or via API
  • Real-time payment notifications via Webhooks
  • Instantly refund payments. Improve customer experience and trust by cutting down refund period from 3 business days to a few minutes

Popular business use cases

  1. Fee Collection – Accept payments with multiple payment modes to a virtual account
  2. Loan Repayment – Accept multiple loan repayments 
  3. Payments for Investments Plans – Receive payments towards investment plans
  4. Insurance Payments – Accept payments of insurance premiums periodically

Invoices – Get paid on GST compliant invoices 

razorpay invoices payments solution

Let your customers know what they are charged with a detailed breakdown of the expenses, including price, taxes, and discounts. Provide your customers with accurate information and yourself faster access to funds through online payments.

Razorpay Invoices provides customers with a seamless buying experience through beautifully designed invoices that speak your brand language.


GST compliant – Add GST, discounts and shipping details, all in an invoice and let our invoicing solution do the calculation for you.

Partial payments – Enable partial payments for your customers at the time of invoice creation directly from the dashboard

One time effort – Save time and effort on entering the same line item again, instead, save it as a template and use it across invoices

Download Option – Let your customers save and download a .pdf version of invoices for future reference. With Invoices, you can create and send GST compliant invoices that your customers can pay online instantly.  Get paid faster and improve your cash flow.

What more?

If your business has a very unique use case, you can try a combination of products to help you meet your goal. All you have to do is let us know and we’ll figure things out for you.

[Suggested read: 7 Reasons why Razorpay is Right for You]

End of the road

And, there you have it! All of Razorpay’s payments solutions to accept payments from your customers, broken down to understand what kind of product you would essentially use for your use case. What are you waiting for? Get started now!

Ready to Start Accepting Payments Online?

  • Quick Onboarding
  • Saved Card Database
  • Razorpay Checkout
  • 24×7 Support

India Sees 383% Growth in Digital Payments From FY’18 to FY’19 – The Era of Rising Fintech

era of rising fintech

We’re back with yet another fascinating edition of ‘The Era of Rising Fintech’! 

With the end of September, we wanted to give you a little glimpse of how digital transactions are carried out in the country. We’ve focused on how Indian businesses accept payments, as well as how Indian consumers transact. We also wanted to highlight some of the noteworthy developments in the payments space.

Since Razorpay is a payments platform, it oversees huge volumes of digital transactions of a multitude of businesses. All findings in this report are based on digital transacts on the Razorpay platform carried out from January till September.

(JFM: Jan-Feb-Mar, AMJ: Apr-May-Jun, JAS: Jul-Aug-Sept)  

Let’s spring right into it!

The growing demand for digital payments

Consistently, there has been an amplifying demand for digital payments over the past few years. We’ve undoubtedly seen the adoption of UPI and other fintech innovations making banking and payments very experiential for both consumers and businesses. 

  • According to the report, India observed a whopping 383% growth in digital payments from FY’18 to FY’19.
  • Total digital transactions in volume terms recorded a growth rate of 58.8% during 2018-19, on top of a growth of 50.4 percent during 2017-18 – Reserve Bank of India

Although demonetization in November 2016 did not directly aim for India to become a cashless society, it did play a big part in it. The dearth of physical currency gave rise to wallets, just about when mobile payments gained a firming foot. 

Just then, NPCI released their innovation – UPI (Unified Payments Interface) which was much ahead of several money centers all around the world. Quickly, a hundred and odd number of banks joined hands to provide UPI as a payment mode to the merchants and consumers. This pretty much created a revolution and played a massive part in the era of rising fintech in the country. 

And ever since, cashless India has been a model for the rest of the world.

[Suggested reading: UPI Overhauls Cards as the Preferred Payment Mode at 45%]

P2M Digital transactions in Jul-Aug-Sept

Like we mentioned before, we enable payments of over 600,000 businesses all across India and oversee immense volumes of digital transactions. Based on these transactions, we were able to analyze and gain intricate insight into payment trends throughout the country. Here are some crowning points.

  • In JAS, we observed that most consumers preferred digital payments like cards (43.5%), UPI (40.4), netbanking (10.9%) and other online payment modes over cash transactions
  • While cards contributed a bigger chunk of digital payments, we noticed that the usage of cards declined by 9% while UPI grew by 26%, from AMJ to JAS
  • While UPI grew, Google Pay became the most preferred app with a hefty hand out of 62% of the total UPI transactions.
  • PhonePe followed Google Pay by chipping in 25% while PayTM and BHIM did their part by 6% and 5% respectively

As we analyzed the transactions carried out in JAS, we picked up on the top 3 industries that contributed the most. 

  • Food and beverage industry took the largest cut at 25% while financial services and tours and travels contributed 21% and 15% of the total digital transactions
  • Logistics sector saw 161% growth in terms of online payment adoption, followed by government bodies showing 109% growth. Financial services also climbed up the ladder by 57%

The Era of Rising Fintech – Hyderabad

The top 5 digitized cities of India in terms of payments are Bangalore, Hyderabad, Delhi, Mumbai, and Pune. While we discussed the digitization of Pune (JFM) and Chennai (AMJ) previously, our pick for JAS is Hyderabad. Let’s plunge into the details of Hyderabad’s digital payments ecosystem in JAS.

  • Hyderabad is the 2nd most digitized city in terms of payments. Also, Telangana is the 5th highest contributing state in the total volume of digital payments carried out all over India
  • UPI has mostly taken over digital payments in the country by a storm. As UPI augmented itself by 222% from January 2019 to September 2019, it became the most preferred payment mode in Hyderabad.
  • While there are many UPI apps, Google Pay continues to be the most preferred UPI app in Hyderabad, too. The app was used to carry out 59% of the total UPI payments in JAS
  • PhonePe was a close contender contributing 32% of UPI payments made in Hyderabad n JAS. The app also grew in terms of adoption by 84%, seeing the highest growth percent amongst its competition
  • In JAS, we noted that consumers preferred cards to make most of their online payments. 41% of payments were made using cards, beating UPI (39%) and netbanking (18%) in the quarter. In September, UPI became the preferred payment mode with a contribution of 45%
  • Hyderabad saw the highest number of online payments in Telangana. It’s also interesting to note that cities like  Secunderabad, Khammam, Karimnagar, Warangal, and Palwancha also contributed their share to Telangana being the 5th most digitized state

The future of digital payments 

After understanding the customer preferences, payment innovations ecosystem of payments and contribution of various industries, we wanted to provide some insight about what’s in store for Hyderabad.

  • With the digital lending sector in India projecting growth by $100 billion by 2023, we can surely expect a lot from the 2nd most digitized city in the country
  • UPI also has the potential to offer much more than it already has! The payment mode can lead the way with much more customized features that can help increase financial inclusion all over India
  • With the government GST incentives and Merchant Discount Rate (MDR) cuts, we can expect an increased and sustained merchant acceptance in Hyderabad

Roadblocks along the way to digitization

India has shown remarkable strides lately, ever since newer fintech innovations became accessible to consumers. Like any other innovation, there certainly are several roadblocks along the way.

  • After analyzing digital payments, we can say that there aren’t enough incentives to promote digital payments. Cashback and scratch cards don’t cut it anymore
  • There is an insufficient collaboration between banks and fintech bodies
  • Smaller merchants need POS terminals along with cheaper payment options

[Suggested reading: Challenges for Banks and Fintech to Work Together]

Over to you

We’re definitely on the way to seeing India becoming a digital superpower. Many cities have already contributed significantly towards its becoming, while tier 2 and 3 cities are slowly gaining momentum. 

We’re very excited to see what’s next – with our next edition and a whole new city!

razorpay era of rising fintech report

Ready to Start Accepting Payments Online?

  • Quick Onboarding
  • Saved Card Database
  • Razorpay Checkout
  • 24×7 Support

Is 30% RTO the Cost of Running an E-commerce Business?

thirdwatch ecommerce return to origin fraud

It is no surprise that the Indian economy is more of a cash-driven market, especially in the e-commerce sector. Unlike the e-commerce industry in USA/Europe, COD is the forerunner in the Indian market. 

COD suits the Indian mindset and can make up to 70 percent of Indian e-commerce businesses. With smaller players, customer credibility is also in question, which can further accelerate the need to introduce COD to their business.

However, there’s a bigger problem in question when it comes to the Indian e-commerce industry– Return to Origin (RTO) costs. These RTO costs can be especially high in the case of COD orders.

What is RTO?

RTO is when orders cannot be delivered and have to be shipped back to the warehouse. This puts a significant cost burden on e-commerce firms as they lose a lot of money in shipping it back and forth.

Here’s how e-commerce companies lose money in these orders:

  • Forward & reverse logistics
  • Blocked Inventory (Items stuck in transit)
  • Physical quality check and re-packaging of returned items
  • Increased probability of damage to fragile items, and hence more money spent in shipping them
  • Operations cost in processing this order

We took time out to see what the actual numbers of RTO orders and what their share was. Here’s what we found– in case of COD orders, the percentage of RTO orders can be as high as 40 percent!

This means that at least one out of three orders were failed orders and were returned. When one-third of your orders have the potential to damage your bottom line, rather than adding value to it, it’s no doubt that the situation is worrisome.

Is there a pattern to these cancelled orders?

We took a closer look to see if there were any patterns to these orders, and if these patterns followed a Modus Operandi and we discovered a few interesting insights. Here’s what we found out:

  • Customer error (Intent is there but incomplete address, phone number, etc)
  • Orders from transitory addresses (hotels, friend’s place, etc)
  • Price-sensitive intent (Reorder because of drop in price)
  • Impulse buy but without paying (there is no downside to refusing delivery)
  • Intent to fraud (Habitual fraudsters)
  • Placing an order without any genuine intent

So, what is the solution to this?

Companies often perceive these costs as “mandatory” since there’s no proper solution set in place. Companies have little choice and fewer tools to prevent RTO — they just take it as a ‘cost of doing business’.

Some businesses also resort to static, generic solutions like the following:

  • Blocking all transactions on International credit cards
  • Not delivering to certain pin codes or cities
  • Capping the order size

But, what’s wrong with static solutions?

Well, sometimes, static solutions can do more harm than good as many genuine orders are lost in the process, not to mention customer dissatisfaction when they hit a dead end on a static solution. This can even affect customer relationships on a long-term basis. 

Solving the RTO problem by manually scanning every order does not work either due to the sheer scale of the problem and evolving nature of fraud techniques. 

With the Indian e-commerce market becoming hyper-competitive, firms need better solutions as they cannot afford to lose customers and orders. 

The way forward

Machine Learning technology offers an attractive solution as it addresses all the challenges in preventing fraud — scale, complexity and changing patterns.

  • Employing Machine Learning for fraud detection

Catching digital frauds requires us to first gather the ‘Forensic Evidence’. Every user interaction leaves behind a subtle digital forensics trail like proxy IP, device ID, email address, time to order, etc. 

Machine learning models combine hundreds of such innocuous parameters, which are seemingly unrelated, to identify the patterns that indicate fraud. These patterns are later used to zero down on customers who perform a fraud across different websites and make it to the blacklist.

  • Enriching the data

Machine learning and natural language processing are used to differentiate between real and fake address. This is only the beginning. Transaction and user data can be enriched by adding context to it.

For example, by adding the price of the user’s phone device or categorizing an address as five stars or one star, we turn meaningless data (phone model) into actionable information that increases the accuracy of the red or green flag that the machine learning models generate for every transaction.

  • Observing the user

Fraudsters are habitual in nature. They leave similar footprints on multiple sites. Network effects can be harnessed by pooling in anonymized data to predict and prevent fraudulent behaviour. This de-incentivises and penalises fraudulent behaviour across the ecosystem.

Moreover, e-commerce firms will truly know their customers so that goods are delivered to a person not merely to an address.

Most importantly, RTO will no longer be just the “cost of doing business”.

Curious to know more about how we’re solving this for merchants? Get in touch with a Thirdwatch expert today!

India’s FinTech – An Unbalanced Adoption

FinTech firms in India are setting new benchmarks for financial services in the country. A large number of Indians are today not catered to by financial service providers in the country. This is a huge segment of the market that FinTech firms are looking to tap into through their innovations, a majority of which come from startups. Hence, their use will only rise as awareness grows, consumer concerns fall and technological advancements reduce switching costs.

India already has the second-highest FinTEch adoption rate in the world, at 52%, second only to China. According to Credit Suisse, the digital payments industry is currently pegged at $200mn and is expected to grow five-fold by 2023.

On the whole, the FinTech industry is backed by the government as well. Initiatives such as Jan Dhan Yojana, Aadhaar and UPI have enabled a larger number of Indians to access financial services. Consequently, the business environment has flourished thanks to programs like Startup India, which has enabled more companies to cater to this ecosystem. 

Additionally, The National Payments Council of India (NPCI) has leveraged the growing presence of mobile phones with the introduction of UPI. This has helped in the reduction of the cost of infrastructure for FinTech ventures substantially. With the smartphone user base expected to expand, the digital banking footprint is projected to grow faster than ever before.

But all of this is currently happening on a large scale in urban India. FinTech has become an almost ubiquitous part of our lives, but our fellow citizens in rural India are still way behind. The fact that they can’t afford these services coupled with illiteracy is some of the reasons for this. 

Additionally, the needs of the population without bank accounts are very different from the traditional population. The need for money and the spending habits of a daily wage worker in a smaller town or village are very different from those of an office goer in a bigger city. Transitioning to digital platforms is difficult for people who have spent their life using cash. 

But that’s not to say that things are not changing. They are because smartphones and internet access are both increasingly available more easily in every part of the country. The government is working in unison with FinTech companies to make sure that this part of the population also gets access to financial services and products. FinTech companies are also adapting themselves to meet the needs of this segment as Indian consumers in smaller areas become more accepting towards UPI platforms and mobile phone wallets.

On the other hand, that is complicated in an economy like India which is dominated by MSMEs. And for MSMEs, entering the digital realm for payments can be complicated. But on the plus side, FinTech companies have taken it upon themselves to build products that solve this problem. Payment gateways are one such example. Sure, the margins might be low, but the scale definitely isn’t. This is why more massive payment gateways target a handful of giant retailers. This makes it that much harder for FinTech companies catering to the latter to come up with sustainable business models. Fintech is supposed to enable small companies and has done so in mature economies. 

In all, FinTech firms are establishing themselves as noteworthy providers of financial services, with the greatest traction not only in banking but also increasingly in insurance and wealth management. They are demonstrating success in innovation, whether as a new business model or a new service and, in the process, are shaping the future of the financial services industry. As a result of the rise of FinTech, we are moving to a world where products are unbundled from full-service incumbent firms and bundled by platforms that disrupt traditional merchant-consumer relationships by allowing consumers to manage their finances on the go. 

Although we are on the right path, we also have a long way to go, to make sure we are able to strike the balance, in the next five years – FinTech has the potential to democratize access to finance in ways that we are yet to comprehend completely. Hence, it is imperative, that the financial services industry and the government put together a collective effort to leverage the benefits of FinTech for the betterment of the Indian society as a whole.

This story was first published on ET BFSI.

Ready to Start Accepting Payments Online?

  • Quick Onboarding
  • Saved Card Database
  • Razorpay Checkout
  • 24×7 Support

What Does a Payment Gateway Do With Your Data?

Three years, four years back, did you imagine that payment gateways would be so omnipresent in your life? Probably not. And yet, here we are. Today, you run into a payment gateway every time you’re making a digital payment. You interact with a payment gateway when you pay Rs 100 for groceries or when you buy an iPhone worth a lakh from an ecommerce company.

Payment gateways have, without doubt, made online transactions very convenient. But a lot of customers typically do face some kind of anxiety when they pay online. Even when we understand that the transaction is going to be secure, there is always a fear at the back of our minds when we enter in our card or bank details. It’s our hard-earned money on the line, after all.

However, since digital payments are not going anywhere but upwards in terms of usage, let’s understand how secure your online transactions are and what exactly a payment gateway does with your data.

Encryption through PCI-DSS compliance

First things first, a payment gateway does not store your data as is. The best payment gateways are PCI-DSS compliant. The PCI Security Standards Council is a global organization that sets compliance rules for managing cardholder data for all online payment systems. PCI-DSS is now the global standard for online security. What this means for you is that your online transactions are encrypted to ensure there is no data interception.

Basically, all the details that you enter like name, address, card information, netbanking details, etc are used only to complete the transaction. The payment gateway never stores sensitive information like CVV, pin or password. 

https:// for higher security

Coming back to the encryption bit, data security begins the second you land on a website. A payment gateway uses the highest assurance SSL certificate, which allows TLS encryption of your data. This is a lot of jargon, but in simpler words, you can just look at the URL in your browser. An https:// protocol means that the website you are on is secure.

Most ecommerce companies today work with secure payment gateways to ensure that the data of their customers is not compromised. You can also check if the website or payment gateway page is secure or not by looking for the https:// in the URL, but to additionally understand how payment gateways ensure security, let’s look at something called tokenization.

Tokenization to prevent exposure of data

You enter your 16-digit card number into a payment gateway’s interface. What the payment gateway does is that it replaces this 16-digit number with a single token. This “token” is a unique set of characters that replace your original card number. This allows the payment to be processed without exposing your sensitive details. Tokens are assigned randomly, which makes it extremely impossible to reverse-engineer the actual card number from the token. 

Let’s dig in deeper with an example. Tokens can be of two types–format preserving and non-format preserving. Format preserving tokens maintain the appearance of the card number while non-format preserving tokens are alphanumeric numbers. 

Card number Format preserving token Non-format preserving token
5945 XXXX 5953 6391 4111 8765 2345 1111 25c92e17-80f6-415f-9d65-7395a32u0223

The best payment gateways use non-format preserving tokens as they are more secure. 

Beware of common payment frauds

While a payment gateway does its best to ensure that your data cannot be breached, there are fraudsters out there who are working equally hard to try and exploit your sensitive information. As someone who transacts digitally, you can also do your bit by understanding common methods of frauds to make sure you don’t fall victim to them.

Common Online Payment Frauds
Type of fraud What it is What you can do
Phishing or spoofing Process of accessing your personal information fraudulent emails or websites that claim to be legitimate Think twice before you click on links that appear fraudulent and don’t give out your personal information unless you’re 100% sure of the recipient
Data theft Card and other data stolen from businesses by dishonest employees Don’t deal with companies that you are not aware of or ones that don’t maintain stringent data security norms
Fake schemes and offers Offers that provide heavy discounts on illegitimate products  Don’t fall for offers that seem too good to be true. Verify the company and the product before you make the purchase

Over and above this, you should also use two-factor authentication to make online payments. It adds an extra layer of security to your digital transactions. For example, even if your data is compromised and someone gets access to your card details, they won’t be able to complete a transaction without the OTP that comes to your phone number if you have two-factor authentication enabled. 

In conclusion, payment gateways and online transactions are by and large secure in today’s world. You can go ahead and transact digitally with sufficient peace of mind. Just ensure that you keep your eyes wide open to not fall into any traps.

Also read: What is a Payment Gateway and How Does It Work

Ready to Start Accepting Payments Online?

  • Quick Onboarding
  • Saved Card Database
  • Razorpay Checkout
  • 24×7 Support

Subscription Economy: Business Impact of Rapidly Changing Consumer Needs

Technology has summoned a change that has enabled people to decide what, how and when they want a specific service or product. And, also dictate how they want to consume and pay for it.  

With the advent of intelligent customers, hard-selling has become a thing of the past. From Xennials to Millennials, everybody loves the flexibility, convenience and personalisation that technology has to offer.

Today, customers prefer access without ownership, flexible, just-in-time consumption of products and services are preferred over heavy, long-term investment models. One size fits all’ is no more a mantra that works for customers. Unique, personalised offerings are what works, where every customer is empowered to tailor his/her own experience. 

These factors have led customers to lean towards new consumption models like Subscriptions instead of traditional purchase models. 

All about subscriptions

Subscriptions is a business model where the customer decides to consume goods or services on a periodical basis and not as a one-time event. The payment for subscription plans is also made regularly. Subscriptions plans are tailor-made to meet customers consumption preferences. 

Primarily, there are three forms of subscription models: 

  • Access-based: Follows a periodical fee (monthly, quarterly, yearly) to obtain access to products or services based on individual needs 
  • Curation-based: These consist of curated or personalised items, meant to help customers discover and sample products. Curated products are sold as ‘subscriptions boxes’, and popular categories include beauty, fashion, food, and learning
  • Replenishment-based: A model that allows customers to automate their consumption of everyday consumables, like razors, milk, etc

Surprisingly, the history of subscriptions dates back to the1800s, where newspapers and magazines made their sales through subscriptions. Since then, subscriptions through its unique distribution model has paved the way for innovation across diverse industries.

Learn how to start your subscription business.

Subscriptions economy in India

It took a while for the subscription model to gain a foothold in India. But the success of brands like Amazon Prime and Hotstar has proven that there is a massive market for subscription businesses in the country.

With the internet, online commerce and digital payments, the subscription business model in India is now moving online. The earliest player to leverage online subscriptions in India were media and publication businesses. 

Driven by engaging content and a convenient way to consume, Indians took to OTTs (over-the-top media services) like Netflix, Amazon Prime and Hotstar. According to Pixights, Indians on average spend Rs 295 per month on an OTT platform. Also, about 62% of Indians have subscribed to three or more such platforms. 

Download the full report here.

What is driving subscriptions upheaval in India?

India is in the midst of an e-commerce boom. Over 40% (about 472 million users) of the country’s population is internet-enabled, making India the world’s second-largest user base. This massive internet penetration has put the Indian e-commerce market on an upward growth trajectory. From $38.5 billion in 2017, the market is projected to grow to $200 billion in 2020, surpassing the US to become the second-largest e-commerce market in the world.


Today’s Indian consumer is time-constrained, but resourceful, hence leaning towards quick, convenient and hassle-free shopping and payment experiences. Customer convenience is no more about having a plethora of options; it’s all about getting relevant, curated products and services at the right time and place. This is what subscription businesses fulfil. 

Also read: Payment Method for Generation Now: Cardless EMI