Understanding the New Age Ways of Business Banking

business banking

Banking is the most fundamental form of managing finances. Whether your use is personal or official, you rely on banking and its services. And, if you have a business of your own, you definitely know the importance of business banking. Today, we’ll take a look at business banking and understand the new age forms of using these services. 

What is business banking?

Business banking is the process of a third party managing your company’s finances by providing loans, credit, savings, and current accounts that are especially designed for businesses instead of individuals.

Business banking helps keep your funds safe while providing you with a clear view of your business’s financial health. You also get additional perks that you won’t receive with a personal account.

Methods of business banking

Business banking can be carried out in a few ways.

A physical branch – This is the traditional way of business banking where are your transactions will be processed at a branch.

Online banking – This method of banking has become increasingly popular because of the ease it provides to the customers.

In online banking, neobanking and open banking have opened up a whole new avenue of services that primarily focus on experience while providing your business with the best possible solutions for money management. Let’s take a closer look.

What is neobanking?

It is a type of digital bank that does not have any physical branches. Unlike a traditional bank that has a branch at a specific physical location, a neobank is entirely digital and online.

Think of a neobank as a cluster of financial service providers who cater to today’s tech-savvy consumers. Without a license of its own, a neobank leans on bank partners to provide bank licensed services to its customers. 

How does neobank help with business banking?

Often, businesses have to deal with tedious, never-ending processes that involve disbursals and payments. These processes result in hours and hours of manual efforts due to buggy software, complex infra systems, and many other reasons. This complexity may further grow into fiddly money movement views. 

Business banking via neobanks helps solve all these problems.

  • Account creation is a breeze since neobanks are completely online; they don’t have a storefront. All it takes are a few minutes and a couple of simple steps on a smartphone
  • With friendly UI, you can provide the best user experience to your customers
  • Business banking with neobanks helps take your business to any part of the world
  • Neo-apps help manage your finances by providing you with an overview of your expenses and a savings goal that matches your needs
  • You can save 10x time because of reduced manual effort and instant payouts
  • Make, track, control, and analyse all forms of money movement, all from a unified platform
  • You can also track and manage money movement to vendors, customers, employees, and more, with the in-depth Financial CRM 
  • Use APIs that are easy to deploy and integrate banking into payments and accounting infrastructure
  • Make informed, impactful business decisions with off-the-shelf analysis on payouts mode 

Neobanks also provide current accounts since they support higher volumes of transactions. 

Read more: Everything You Should Know About Neobanking

What is open banking?

Open banking involves sharing financial information digitally and securely, with customers’ approval. The use of APIs enables third-party developers to build services and applications around a financial institution. This drives speed while keeping costs low when compared to traditional systems. 

A combination of rich bank data and disruptive fintech results in financial products that provide both businesses and customers with the best of both worlds.

How can you improve your business banking with open banks?

The utilisation of APIs by banks has become very progressive all around the world, and for good reasons. With API banking, innovators have more flexibility to provide the best features and services to streamline financial services, thereby creating a surge of competition and innovation in fintech products.

Use cases for API banking

The most common use-case for API banking is payouts.

Lending: In the last year, the consumer lending industry saw a meteoric rise. And, with increased competition, the speed at which loads are processed became a top priority.

Today, RazorpayX has helped many lending companies reduce the average time to process a loan from 3 hours to 30 seconds.  

Gaming: Gaming is an industry in which instant gratification reigns supreme – winners want to claim their prize instantly. 40% of the real-money gaming industry in India uses RazorpayX to disburse winnings to their users.

Open banking provides solutions for all your business banking needs.

  • Have more transparency, knowledge, and options when it comes to managing your finances, and find a tailored solution that fits your business case 
  • With real-time capabilities, get enhanced visibility of cash flow, cash position, and more, across currencies
  • Reduce administrative hurdles with regard to managing your finances like applying for a business loan, checking your creditworthiness, and more
  • Be in control of your data as you decide how to use it or who gets to access it
  • Set targets on savings and expenditure, ration your finances logically while being able to account for each and every financial activity
  • Have a single view of all your finances while being able to control, track, and analyse all financial movements, all in one place

RazorpayX – business banking experience like never before

With RazorpayX, businesses can manage their entire financial operations and make timely payouts using our sleek dashboard or robust API.  Businesses like CureFit, MPL, Dunzo, and others use RazorpayX to make payouts at scale via API while keeping costs low.

This also helps them ensure their customers and partners are happy. RazorpayX Current Accounts takes business banking further by including all standard banking services like debit cards, accounting statements, cheque books, and more.

Conclusion

Surely, you’d want to manage your business’s money better, with more control and efficiency. Neobanking and open banking can help streamline and automate your business banking at scale.

UPI Steals the Thunder in 2019!

2019 was a big year for fintech, especially payments. We saw the rise of many innovations that led India on its journey to becoming one of the most advanced countries concerning digital payments. And, UPI is certainly an innovation that comes to mind when we think fintech.

With the festivities in the air, we wanted to mark the beginning of the new year with a recap of all the cardinal developments of UPI in 2019, along with some noteworthy insights.

Razorpay oversees payments from numerous merchants like IRCTC, Swiggy, BookMyShow, and 8 lakh+ partner business. We’d like to quickly mention that we’ve considered P2M (Person to Merchant) UPI transactions to derive the insights in this report, all of which are based on the transactions made on the Razorpay platform

UPI in 2019 – a snapshot

2019 was a remarkable year for UPI. We saw many use cases for the payment mode, observed growth in its adoption and analyzed volumes of UPI transactions throughout the year to bring these insights to you.

  • For the first time ever, UPI overhauled cards (debit & credit) in September and became the most preferred payment mode 
  • The most loved UPI app in all of India was Google Pay, displaying colossal adoption and growth rates of 337.73%
  • Karnataka was the most digitized state through 2019, contributing the highest chunk of digital payments from all over India
  • Bangalore recorded the highest number of UPI transactions from all over India
  • Food and Beverage (29%) industry saw the most number of UPI transactions in 2019, followed by Financial Services  (12%), and ravel industries (11%)

The upsurge of UPI

UPI was innovated by NPCI (National Payments Corporation of India) in 2016 to help Indian consumers make payments in real-time. What started as a mobile-first P2P (Person to Person) payment mode, quickly evolved itself to become the preferred merchant first platform. 

We looked through the UPI transactions made over the years. Here are some findings.

UPI transactions 2019

From its innovation in 2016, UPI set foot into 2017 with a bang. Considering all the UPI apps providing cashback, scratchcards, and other offers to promote adoption, the payment mode grew 95 times from 2016. We also saw several players competing to become the most used UPI app, which we will get to in a bit.

When we thought it couldn’t possibly get any better than the 95x growth from 2016 to 2017, 2018 saw 48 times the growth in 2017. 

Although the offers provided by the UPI apps played a sizable role, we cannot rule out the change in consumer behavior in recent years. Consumers preferred online payments to be quick, easy and immediate. Compared to other payment modes, UPI was far simpler to use. 

The authentication process was straightforward, and the best part – consumers didn’t have to carry anything specific (other than their phone, of course) or remember long numbers. The ease of carrying out a UPI transaction was far more satisfying. 

At the beginning of 2019, most offers turned into ‘better luck next time.’ But that didn’t slow UPI down one bit. The year noticed ten times the growth from 2018, still making a massive impact since the payment mode was widely used all over the country.

The ascension of UPI in 2019

Now, let’s take a look into some numbers that show how UPI performed throughout 2019.

growth of UPI

UPI had already gained a firm ground as it made into 2019. In the JFM quarter, the payment mode experienced an uptick of 128% from the previous quarter in 2018. Next, as it made its way to the AMJ quarter, the growth percentage increased by 71% from JFM. 

At 26% growth in JAS from the previous quarter, UPI displayed steady growth throughout, venturing into OND with a propelling growth of 36%.

UPI vs other payment modes

While we paid utmost attention to observing UPI, we didn’t forget the other payment modes. Let’s take a glance.

UPI vs other payment modes

UPI was the most preferred payment mode towards the 2nd quarter of 2019, contributing the most number of digital transactions when we compared month-on-month. When we pooled in the data from throughout the year, we observed that cards took precedence over UPI at 45.73%.

UPI was a close contender, taking second place at 37.69%, followed by netbanking at 11.43%.

Since cards and netbanking were close to UPI in terms of volume, we wanted to take a closer look.

UPI vs debit cards

UPI vs debit

  • In JFM, debit cards were preferred over UPI by 0.65% and the trend continued in AMJ, where debit cards were used more than UPI by 0.91%
  • This changed in JAS as UPI became the preferred payment mode over debit cards by 1.44% and took over cards in OND as well by 1.59%

UPI vs credit cards

UPI vs credit

Unlike debit cards, UPI stole the show throughout the year and kicked credit cards to the curb as it transitioned into the most preferred payment mode.

UPI vs netbanking

UPI vs netbanking

Remember the time netbanking was the most convenient way to transfer money? Not anymore! After overhauling cards, UPI stood over netbanking as well, all through 2019.

UPI transactions – a geographical split 

We analyzed the UPI transactions made from all over the country throughout 2019. Here are some highlights.

geographical split

As always, Karnataka claimed its position by contributing the better chunk of UPI transactions made in 2019, at 27.82%. Next up, 15.05% of the total UPI transactions were made in Maharashtra. Andra Pradesh and Telangana pitched in another 11.02%. Further, the NCR region contributed 8.06% of UPI transactions.

This trend remained the same throughout the year as well, when we observed UPI transactions month-on-month.

Now, let’s take a look at a city-wise split.

Again, like many other times before, Bangalore was our #1 contributor as 38.4% of the total UPI transactions were made in the city. Hyderabad followed the lead at 13% while Pune handed in another 9.7%.

NoteQ: Why is Bangalore’s contribution higher than Karnataka’s?

A: The state-wise split is different from the city-wise split. We considered the whole country to provide state-wise data, whereas we considered 15 cities for the city-wise data.

The elevation of UPI apps

So, we learned about how UPI did in 2019. Now, let’s understand how some of our favorite UPI apps fared.

UPI apps growth

Based on all the UPI transactions made in 2019 on the Razorpay platform, Google Pay took center stage as the most preferred UPI app. The app saw a growth of 337.73%, which is very significant, considering the adoption rates.

PhonePe grew the most at 857.22% followed by PayTM at 827.68%, while BHIM app expanded by 108.68%.

Bank UPI apps also showed promising growth throughout 2019. Here’s a look.

UPI bank apps

What’s next for UPI?

UPI has been one of the most promising fintech innovations. It didn’t fail to disrupt the Indian payments space, creating an impact we didn’t anticipate. 

We expect UPI to permanently dethrone cards and netbanking to become the most preferred payment app in 2020. Based on our analysis, we also foresee an ambitious and competitive market for UPI in 2020, where Google Pay may continue its top position. 

Unlike before, Indian consumers are more comfortable using UPI for most digital transactions. We look forward to a paradigm shift towards the consumer confidence towards making larger value transactions via UPI.

We also predict a rising trend in the adoption of UPI in tier 2 and 3 cities.

We’re very excited to continue our analysis on UPI transactions to see new patterns and trends in 2020. 

(Note: All findings are based on the transactions on the Razorpay platform from 2016 to 2019.)

The Fingerhold of Recurring Payments in India

Lately, India has seen an unparalleled expansion of online businesses. With the online commerce industry penetrating the Indian market by 74%, close to 329.1 million people are projected to buy goods and services via online stores by 2020. While consumers have a mountain of options to choose from, the need for more innovative consumption models also arise.

Why?

  • Convenience dictates consumer behavior. The ease of simply tapping a button to buy anything from anywhere, at anytime, is simply not beatable
  • Consumers prefer “accessing” something over “owning” it
  • Each consumer wants unique and personalised offerings, where they can tailor their experience
  • Consumers demand flexibility, not only “what” to consume, but also “how”

This has led us to where we are now with recurring payments.

The recurring payments model has a far reaching impact. It creates opportunities for product differentiation, taps consumer segments, and improves customer loyalty. And so, it’s no surprise that its growth is catapulting.

subscriptions data india razorpay recurring payments

Based on recurring payments on the Razorpay platform, here are a few highlights.

subscriptions data india razorpay recurring payments

Earlier in FY18-19, recurring payments began to gain popularity. Based on transactions on the Razorpay platform, there was a 78% growth in Q1 as many businesses got onto the bandwagon. What started out with standing instructions on credit cards soon got extended to debit cards, and in some cases, to netbanking as well. Physical NACH got transformed to eNACH.

All of this led to recurring payments receiving an even better response in FY18-19 growing by 96% in the second quarter of that year. By FY19-20, recurring payments have gained strong ground in India. Although Q1 and Q2 seem to show a smaller growth percentage, the growth is still significant because by then, most businesses were already using a recurring payments model.

Now, we anticipate recurring payments to sprout on all cards and UPI as well, which will further fuel the growth of this mode of payment.

“India is a key part of our international subscription growth.”

– Reed Hastings, CEO, Netflix

subscriptions data india razorpay recurring payments

Government initiatives have also been helping businesses move to the recurring payments model.

RBI opens up recurring payments on cards – A step ahead for digital payments

In September 2019, RBI turned out with a circular to engender the utilization of cards in making recurring payments. The circular says that starting September, buyers will have the option to utilize their cards to make recurring payments to businesses through e-mandate.

The e-mandate and additional factor of authentication (AFA) should be done just once at the hour of the principal transaction. All transactions taking place, later on, will be completed consequently without the prerequisite of rehashed AFA.

RBI has set a cap of ₹2,000 for such transactions and notified that they will be permitted on debit and credit cards, and prepaid payment instruments (PPI) including wallets.

This will empower consumers, just as traders, to significantly profit by getting rid of the issue of authenticating transactions on numerous occasions.

The RBI circular likewise specifies that consumers will be given the aid to set recurring payments for a predefined fixed value or a variable value. To guarantee that the cardholder is protected, they will have the option to determine the maximum transaction value as well.

Further, to defend the interests of the consumers, RBI said that they will get a notification through SMS or email a day prior to when the recurring transaction is to be completed. This notification, carrying details regarding the amount, date and purpose behind the transaction, will enable cardholders to drop the exchange, on the off chance they wish to do so. Obviously, the cardholder can pull back the e-mandate anytime too.

This facility will go far in further advancing digital transactions in the nation. All the more so, consumers won’t be required to pay any additional charges for setting an e-mandate for recurring payments through their cards.

eMandate for netbanking and debit cards

In April 2019, NPCI received final approval by RBI for the full-fledged implementation of eMandate for netbanking and debit cards. NPCI informed all the banks to take immediate steps and implement both eMandate variants within June. While the limit for each eMandate is set at Rs 1 lakh, the organisation is to review the limit.

This facility will allow businesses to greatly improve the customer experience while solving collection-related problems at the same time since eMandate will allow them to take a one-time consent from the customer to debit them subsequently.

UPI 2.0 with overdraft facility

The launch of UPI 2.0 in August 2018 was expected to bring many benefits to the payments landscape. In addition to current and savings accounts, consumers could have also linked their overdraft account with UPI to instantly make their transactions while the benefits of an overdraft account are retained. While the launch has not happened yet, it will be a gamechanger for recurring payments, given the immense popularity garnered by UPI in recent times.

What’s in store for recurring payments

“We believe that the recurring payments model will benefit not only customers, but businesses as well. With rapidly evolving consumer needs, this model will be a game changer for the Indian economy. Benefits like reduced transaction costs, convenience of upgrading or downgrading and reduced amounts of waste from unused assets will drive the adoption of recurring payments.”

– Harshil Mathur, CEO, Razorpay

Razorpay offers a full range of payment solutions for Recurring payments which include – recurring on cards, on bank account via eMandate or eNACH and Physical Mandate.

Interesting use cases for recurring payments on the Razorpay platform

 

recurring payments subscriptions trend data razorpay

Explore Razorpay Subscriptions.

2019 – The Year That Was for Razorpay

2019 year end review razorpay

As 2019 draws to a close, it’s a good time to sit back and relive how the year has been for us. In many ways, 2019 was a big year for not only Razorpay, but the fintech industry as well. 

We have captured how the year was for us in the infographic below, but allow me to talk about some highlights here as well.

  • We served 960k plus businesses on our platform this year
  • IFTA announced us as the most innovative payments startup and we made it to Y-Combinator’s list of top 100 companies as well
  • Our co-founders, Harshil Mathur and Shashank Kumar, brought home the Young Alumnus Award 2019 award from their alma mater, IIT Roorkee
  • Razorpay acquired two businesses this year – Thirdwatch & Opfin 
  • We processed payouts volume worth $3 billion on RazorpayX

Our product portfolio also grew by leaps and bounds, notably:

  • Payment Pages allows businesses to accept payments without a website or app
  • Support for freelancers, consultants and unregistered businesses
  • Current accounts and corporate credit cards on RazorpayX 

Personally, I love the fact that we were able to save transaction time worth nearly 6 years through our card saving feature! And of course, we pulled off the country’s biggest fintech event in FTX 2019.

So yes, 2019 has been an outstanding year for Razorpay. As we set foot into the new decade, we have big plans laid out to help businesses #OutgrowOrdinary. Through our acquisitions, we’ll help e-commerce businesses fight fraud and streamline their payroll processes as well. 

But until then, thank you for your support and faith in us. Here’s wishing you and your business a very happy new year, filled with boundless growth opportunities.

2019 year end review razorpay

How Startups Can Accept Online Payments in India

Starting an online business has never been as lucrative as it is today. The number of startups in the digital space have grown by leaps and bounds over the past couple of years. Some might say it’s a fad, but we believe in the entrepreneurial spirit of India. It’s a great time to start an online business, especially since India is embracing digital payments more and more. 

Startup entrepreneurs usually focus on various business aspects like building an attractive and functional website, ensuring the supply chain is reliable, and more. But apart from these, online businesses should also focus on the best way to collect payments. 

Online digital payments can be accepted by businesses through multiple ways, each with its own set of advantages and challenges. The key channels are:

1) Integrating with a bank’s payment gateway – A payment gateway provided directly from a bank (also called a second party payment gateway) allows online businesses to process payments via debit cards, credit cards and net banking and is supported through platforms such as Visa, Mastercard and American Express, among others. 

From the cost standpoint, businesses will need to pay an initial setup fee and transaction fees or TDR (Transaction Discount Rate), which is a percentage of the transaction value for all transactions processed via the gateway.

While the whole system looks straightforward in principle, integrating with a bank’s payment gateway is often challenging and tedious for startups.

2. Integrating with a third-party payment gateway – An easy and efficient way to process online payments is through a third-party payment gateway. Such payment gateways also collect TDR on transactions while setup costs may or may not be applicable, depending on the solution provider. 

Similar to banks, these gateways also facilitate payments made through debit cards, credit cards and netbanking. In addition to this, many solution providers, like Razorpay, also allow merchants to process digital payments through multiple channels like prepaid digital wallets and recently, even UPI and several digital wallets. This way, online businesses have the agility to accept payments through practically every online digital mode.

While on the face of it, third-party payment gateways seem similar to bank payment gateways, they are in fact far more user friendly, accessible and easy to integrate, especially for first time startups.

Now that we know the basics of the two channels, let us see how one compares with the other:

Second party payment vs third party payment gateway

Second Party PG Third-party PG
Setup costs
One time cost to integrate website with the PG
High setup costs Low/No setup costs
Application process
Includes documentation and approval time for PG access
Lengthy process. Average application and approval cycle is around 3 months Quick approval and online onboarding process. Average time for onboarding is 5-10 days
Documentation
Mode of document submission
Documentation needs to be submitted in hardcopy, making the process cumbersome Paperless submission of documents making the whole process easy and efficient
Technical integration
Ease of integration and mode of integration
Difficult to integrate;requires significant time and effort from the merchant’s tech team Easy and simple integration with minimum coding efforts. Some gateways allow for integration within a few hours
UX
User experience and user interface
Complicated UX with limited or no scope for merchant customization. User friendly and intuitive UX that also allows for merchant related customisation
Issuance of refunds
Handling of customer refunds
A manual refund and verification process is to be followed to issue refunds to customers Merchants can easily refund transactions directly from the dashboard through a click of a button
Card saving
Cards once used by customers are saved automatically for future use
Does not facilitate card saving, hence not optimised for superior customer experience Allows for card saving feature across multiple cards, thus enhancing customer experience that might lead to increased customer loyalty
Risk Engines
System level risk identifiers that aim at curbing fraudulent/risky transactions
Does not provide inbuilt risk engines that reduce the occurrence of online frauds Provides system level risk engines that mitigate the chances of online frauds
Co-branding,
The opportunity to use brand name and brand design for the payment checkout process
Does not allow for any co-branding/brand placement or customization in the payment, checkout process Allows for various levels of customization and brand placement in the payment, checkout process
PCI DSS certification
Official information security standards required for handling online card transactions
Requires merchants to be certified to PCI DSS in order to access the payment gateway Merchants can easily access the payment gateway without individually applying for PCI DSS certification (as the PG acquires the risk involved in the payment process)

Thus, from this comparative analysis, startups looking to accept digital payments should integrate with third-party payment gateway providers given the significant advantages gained at minimum effort.

Accepting payments beyond a payment gateway

Setting up a payment gateway works for online businesses that have a website or an app. But what if you don’t? Does that mean you won’t be able to accept digital payments? Nothing could be farther from the truth.

The Razorpay payment suite offers solutions for businesses to accept payments even without a website or an app. Here’s how.

Get paid instantly with Payment Links

If you don’t have a website or an app, you can easily create a Payment Link from your Razorpay Dashboard and send it to your customers via email, SMS, messengers, chatbot, etc. 

Even with a Payment Link, your customer can choose from a plethora of options to complete the payment. Razorpay Payment Links can be used by businesses without a website, as well as businesses with a website that require an alternate payment method. It is a smart way to collect payment, which comes with features like bulk upload and partial payments.

Check out Razorpay Payment Links

Collect payments with custom Payment Pages

Razorpay Payment Pages allow you to create a custom-branded payment page to build an online store in minutes. You don’t need coding expertise to get your store online in a matter of minutes.

With Payment Pages, you can list multiple products, apply smart purchase controls, meet your branding requirements and track your payments with ease. Payment Pages are used by businesses to sell event tickets and products as well as to collect donations and fees. 

Get started with Razorpay Payment Pages

Complete payment solution for freelancers

You don’t even have to be a registered business to accept payments with Razorpay. We support unregistered businesses, freelancers, consultants and professionals as well. 

With quick onboarding and support for multiple payment modes, freelancers never had it as easy as this to accept payments online. Our support for freelancers and unregistered businesses also enables them to create GST-compliant invoices to get paid instantly.

Signup to accept Freelancer Payments

Processing payments is one of the most integral aspects for online businesses today. It is the critical and final step that ensures the success of a product or service. Thus, in addition to merchant-level benefits, payment solutions should also be end-customer friendly and provide checkout experiences that are intuitive, efficient and secure.

At Razorpay, we provide the entire checkout experience on the merchant page with no external redirects, thus providing not only a quick, cohesive payment experience, but also very low dropoff rates.

In today’s crowded online ecosystem, startups require solutions that are many solutions wrapped into one tight and efficient one. Third-party payment gateways like Razorpay do exactly that.

Further reading: How to Choose the Right Payments Solution

Introducing Buyer Action on Razorpay Thirdwatch

ecommerce fraud prevention solution

The e-commerce market in the world is growing at a rate faster than we can comprehend and with unforeseen growth, comes unforeseen responsibilities. Studies show that 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”. 

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

A closer look at e-commerce frauds

Before we understand the impact of buyer action on an e-commerce business, it’s essential to evaluate the problem statement. So, let’s dive right in!

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, merchants 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 the merchant’s budget, as Return-To-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!

So, how does this impact the merchant? 

With e-commerce and internet advertising booming, merchants have begun to experience a large influx of orders online. This does not, however, translate to all of them being genuine.

When it comes to small businesses, merchants waste a lot of money in the process of “confirming” the order. This means that they will have to send out communication from the company in the form of emails, IMs and such to double-check whether the customer actually intends to make a purchase. 

This can prove to be an expensive exercise for merchants to tackle. We took the time out to speak to a few merchants on how much they spend on communications and we found out that they shell out a shocking INR 5-10 per communication!

Calculating risks of inefficiency

For a merchant to trigger the communication activities for the customer in question, it’s important to first calculate the risks involved. The best way to approach this problem is to profile your customers and observe their actions on your website.

This can be consolidated into a “risk score” of sorts– an accessory that lets you determine the authenticity of your customer’s behaviour. A risk score can be modelled from a variety of data points, namely, the number of orders placed, attempts to cancel, cancelled orders, etc. This will help map out the personality of the user in ways that can supercharge the verification process. 

In a fraud detection software like Thirdwatch, EVERY user is assigned a risk score, which is based on the historical data across websites. This risk score is displayed at the decision-making crossroads, where the merchant is expected to take the order forward or reject it.

Find out more: Check out how we’re making life easier for e-commerce merchants

Devising a solution to keep track

When the basic cost of communication is higher than ever and fraud shows no signs of stopping, what is the way out?

Introducing “Buyer Action” from Thirdwatch- a product feature that solves all the above problems seamlessly. With buyer action, merchants can now track the status of confirmation with just a click. Allow us to explain that in detail.

As we mentioned earlier, merchants don’t have it easy. Imagine having to manually filter out risky orders and have a team of people call them up individually to confirm every order in question. This can be extremely monotonous and time-consuming, not to mention incurring the expenses involved.

The “Buyer Action” feature on the Thirdwatch dashboard solves the solution with a single button instead. The merchant simply has to click on “Request confirmation” and communication is automatically triggered in various forms. The different forms of confirmation that are sent out are:

  • IVR call
  • Email confirmation
  • SMS

A message is sent along with a link to the order page, where the customer can choose to accept, modify or cancel items altogether. This feature also allows the customer to remotely make changes, leaving no place for time constraints or miscommunication.

With this feature, not only is the humongous task of following up completed in mere seconds but manual intervention is also significantly reduced.

The true impact of Buyer Action

With RTO rates up to 40% for e-commerce merchants on an average, one can only imagine the efforts that go into reducing it. For smaller merchants, it can be worse as they are required to deliver products blindly to build credibility. 

Thirdwatch aims to make life easier for e-commerce merchants in terms of effort, credibility and human intervention. With an advanced Machine Learning algorithm, Thirdwatch helps detect fraud orders, impulse purchases, non-deliverable addresses and flag risky transactions in real-time to improve profitability.

With a feature like Buyer Action set in place, the merchant does not have to worry about intervening into the specifics of every order. 

What’s better? Buyer Action helps save a lot of money, too!

Buyer Action helps merchants cut costs while communicating with the customer and provides a seamless structure in place for any last-minute follow-ups, all while making sure that customer satisfaction isn’t compromised. With a smooth automation mechanism set in place, you can be sure to focus on the important things, while leaving customer delight to us. 

So, are you game? Join hundreds of merchants in using Razorpay Thirdwatch today and scale your business like never before!

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.

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  • 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!

The Easiest Way for Freelancers to Accept Payments Online

Accepting payments for freelancers

The definition of a dream job is not what it was a few years ago. Gone are the days when a “dream job” was working in a nice office or a well-established company. Today, the so-called dream job is to freelance. It’s to do one’s own thing and work on one’s own terms. 

It’s not surprising then that the Indian workforce is swapping the security of a 9-to-5 job for the flexibility of freelancing. Millennials and Indian workers facing significant lifestyle changes such as motherhood or adapting to newer lifestyle choices like working remotely have started to adopt more flexible and empowering ways to work. 

Here are some statistics that paint a clear picture – 

  • It is predicted that freelancers will contribute to 50% of the nation’s workforce volumes by 2025
  • The Indian freelance market size is estimated to touch USD 25 billion by 2025
  • 60% of Indian freelancers are under the age of 30 years today
  • On average, Indian freelancers work up to almost 40 hours a week; 160 hours a month
  • The average income of freelancers across India is Rs 20 lakh per annum; 23% of them make over Rs 40 lakh per annum

However, despite the fast growth and healthy predictions for the future, the reality is that freelancers and unregistered businesses within this ecosystem are facing numerous challenges. 

Problems freelancers face

While talking to our existing merchants as well as the potential ones, it came as a surprise to see the kind of hassles these users were facing and the need to build a unique solution for them. Here are the top problems that the unregistered businesses face on a day-to-day basis:

Lack of knowledge around GST  

To some, it seems that GST is just for registered businesses but nothing could be farther from the truth. Unregistered businesses and freelancers also come under GST laws. This raises the demand for freelancers to create GST-compliant invoices. 

Freelancers are usually required to raise GST-ready invoices for their customers and their lack of knowledge in creating these invoices becomes a real challenge in the way they accept money.

Irregular & late payments

For freelancers, payment cycles are always irregular and this can create an unpredictable financial crunch. To make things worse, freelancers often have to deal with late payments and in some rare cases, clients renege on payment commitments. In fact, studies show that 58% of freelancers have experienced not getting paid at all for their work. They end up spending inordinate amounts of time following up with clients for unpaid dues. 

Inability to showcase their brand

Branding isn’t just for large organizations or registered businesses. Branding is the secret sauce that aids in the success of a business of any size. And for freelancers, this becomes more important than ever.

While most freelancers have a basic social media presence, they lack the technical know-how to be able to amplify their digital brand presence through websites and customized landing pages. 

This creates a significant difference in the perceived value that a freelancer brings to the table compared to a registered business. 

Absence of seamless digital payment solutions

The most common way for freelancers to accept money today is through cash or bank transfers. In both cases, management and reconciliation becomes a big headache, this problem is especially more pronounced for unregistered businesses that have large customer bases or handle significant volumes. Think of a homepreneur who sells homemade pickles around town – reconciling payments received could take up a significant part of their time, which could be better spent on growing their business.

A holistic solution for freelancers to accept online payments

We are more excited than ever to announce the launch of our much-awaited product – Razorpay for Unregistered Businesses. Whether you are a freelancer, teacher, boutique owner or a professional, now accepting payments is going to be easier than ever. We promise!

Our research of the freelancer universe-spanning our existing customer base, social media and platforms such as Product Hunt has unearthed insights that we have channelled into our new product offering. 

Presented below are the key elements of our new product – 

Payment Links for quicker settlements

  • Say hello to accepting payments via WhatsApp, email, Instagram, Facebook, SMS & more
  • Send quick payment reminders and accept recurring payments

accept payments via social media

An instant personalised page for better conversions

  • Create a storefront with zero-coding and start selling, even if you do not have an app or a website
  • Add this Payment Page to your Facebook, Instagram or any other social media page and accept online payments instantly

create a payment page

One-stop solution for easy GST-ation

  • Just add GST, discounts and shipping details to a single invoice and the calculation will be done automatically for you
  • Send these invoices through any channel and get paid via credit/debit cards, netbanking, UPI & wallets 

GST invoicing

Does this look like a tool designed for you? Sign up today and get started in a matter of minutes.

At Razorpay, all we do leads to a single aim: asking our customers to leave their payment worries to us while they plan and unlock growth for their business. With this launch, we are looking to empower the gig economy to work better, faster and more efficiently. 

Freelancing is no cakewalk and we’re here to help you ride over the bumps with ease.

Get started with Razorpay today!

Introducing the Payment Links Chrome Extension By Razorpay

Introducing Payment Links Chrome Extension By Razorpay

With all the ease that online payment can bring, there still remains hope and scope of hustling to keep making it better. That said, in the online ecosystem, payments are not just limited to monetary exchange. They contribute to aspects like conversion rates, trust and loyalty as well.

With multiple channels of online payments opening their gates in the market, there is a need for businesses like yours to reduce the number of hops and leave payment worries to solutions providers like us! With this, here comes one of the most simplified payment solutions: Razorpay Payment Links.

What is a payment link?

Razorpay Payment Links is the easiest way to accept payments from your customers 24*7. Simply put, payment links are easy-to-use, versatile and mobile enough to manage all your online payments. 

Creating a payment link is as simple as it could be! Just follow these steps: 

  • Login to the Razorpay dashboard and create a payment link via API or the dashboard
  • Share the payment link via SMS, email, WhatsApp etc
  • Let your customers pay you via their preferred options (credit cards, debit cards, netbanking, UPI, wallets etc.)
  • Get notified once the customer completes the payment

Here are the perks of using Razorpay Payment Links for your business:

  • Works even without a website: Don’t have an app or website ready yet? Collect online payment by these easy-to-use payment links
  • Alternative payment option: These versatile payment links can be a quick replacement for all your cash-on-delivery customers
  • Easy chatbot integration: Integrate payment links with your chatbots so that your customers can enjoy a seamless experience
  • Social media sharing: Make the best of social media platforms by using them to send these payment links and get the amount directly in your bank account

That’s not all. Here are a few things that make Payment Links the best and the easiest way to accept online payments:

  • Customers don’t need an app
  • All payment options available
  • No monthly limits
  • Easy tracking via a powerful dashboard 

Different use cases of Razorpay Payment Links

When a customer is making an online purchase, the step where the payment comes into the picture is one of the most crucial ones. Razorpay Payment Links can help you win over your customers and reduce the number of drop-offs. 

Here are some of the use cases of Razorpay Payment Links:

  • The link can be created and used by any business, no matter the size. Even if you don’t have an app or a website, you can easily create and share payment links and get amount settled directly in your bank account
  • These links reduce the hops and minimizes friction points. Let’s say you are a car rental service provider. A prospective customer calls you to enquire and plan a journey. Fortunately, the customer sounds satisfied and you sense a higher chance of him or her proceeding with you. But chances are that after he or she might get distracted or be unsure. There, you can create and send the payment link via SMS, WhatsApp, email etc. within seconds while they are on call and have a successful conversion right there!
  • Payment links are best when it comes to providing quality service to your customers. Let’s say, unfortunately, a payment method is failing and your customer is unable to complete the transaction. You can easily choose to create and send these payment links to them and they can pay as per their convenience. The best part is, you can track the status of the payment easily.
  • Another use case is for businesses that provide home delivery services. There can be multiple cases when the customer is not at home and want the parcel to be handed over to a neighbour or, he or she does not have enough cash. In such a situation, payment links can be a big help. The deliverer can simply create the link there and the customer can pay via a range of options from anywhere, anytime!

With this, we are excited to roll out one of the finest features of Payment Links.

Razorpay Payment Links Google Chrome extension

Razorpay now powers a Chrome extension to accept payments via links! 

Sounds super-simplified, doesn’t it? Read on to know more.

The Razorpay Payment Links Chrome extension lets you easily create and share a payment link with your customers right from your browser window. The only prerequisite is to have an active Razorpay account. 

Simply follow these steps to get started:

Installing the extension

To install the extension:

1. Visit the Chrome Webstore and add the Razorpay Chrome Extension

Payment Link Chrome Extension

2. In the Add ‘Razorpay Payment Links’? dialogue box, click Add Extension

Side menu options

The following options are available on the side menu:

  • Dropdown
  • View the merchant ID
  • Find the document link 
  • Log out of the extension
  • Filter By (to help you check the statuses of different payment links) 
  • Go To Dashboard (to take you to Razorpay dashboard)

Perform action

Create a payment link:

1. Ensure that you are logged in to Razorpay Dashboard

2. Click on the Razorpay Payment Links extension icon on the browser’s toolbar

Payment Link Chrome Extension

3. In the payment links extension screen, click on ‘New Payment Link’

Payment Link Chrome Extension

4. In the window that opens, enter the following details:

Payment Link Chrome Extension

5. After you enter the information in all the required fields, click on ‘Send Link’. This will generate a new payment link 

Payment Link Chrome Extension

6. Copy the link address and click on ‘Done’. You can now share the link via the option of your choice and accept online payments easily.

Payment Link Chrome Extension

Please note: If you have selected the ‘Notify via SMS’ and ‘Notify via email’ checkboxes, the links are also sent to the specified phone number and email address.

So, are you ready to simplify the way you accept online payments? Sign up on Razorpay if you haven’t and stay a step ahead while you leave all your payment worries to us!

Also read: Build Your Own Online Store with Payment Pages

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!