Bullish on India’s UPI, neo-banking and credit growth story: Razorpay

Razorpay, a full-stack payments and banking platform for businesses, is bullish on India’s fintech story on the back of growth gems like UPI, neo-banking and credit, which happen to be its fast-growing businesses in India. “The growth of payments has been exponential in the last few years. There were 10 billion UPI payments last month and that speaks of the kind of scale we’ve achieved. There are 200-300 million Indians who are paying via UPI but we have a population of more than 1 billion. While the payments pool has expanded from 30 million people to now 300 million people, it still has some distance to go,” Shashank Kumar, Founder & Managing Director, Razorpay told Business Today.   

He said that the company remains bullish on UPI, neo-banking to create smarter bank accounts for businesses by leveraging software, and credit growth to drive affordability for both consumers and businesses. “Now businesses are also becoming omni-channel. How can we make that process easy for them, how can we make it simpler as digital commerce proliferates amongst customers? How do you increase trust, that’s going to be a big factor when you go down to tier 2 and 3?” he says. 

He added that credit is one of the most powerful tools for companies in India. The Reserve Bank of India recently included pre-sanctioned credit lines issued by banks for transactions. Earlier, only the deposited amount could be transacted through the UPI System. “We have a very progressive regulator in RBI. Regulation has been an enabling factor. Challenge is the fact that innovation usually runs in the front and regulator has to catch up. There can be a lot of difficulties in navigating that aspect. The regulator and industry are working in the same direction, but coming at it from a different perspective. A lot of processes around credit have gone digital, digital credit has still not taken off,” he said. 

He adds that purchasing power of consumers and businesses will improve once credit is leveraged well. “We help provide finance at the point of checkout so that consumers can avail those options. There’s a lot of transaction data that we generate on platform for businesses. So, how can we leverage that for giving them short term capital/credit. Because on the business’ side banks don’t have trust on their credit history. How can we leverage those data points to help these businesses,” he said. 

Razorpay also announced its acquisition of BillMe, a Mumbai-based digital invoicing and customer engagement start-up. Founded in 2018, BillMe has been introducing industry-first innovations to eliminate paper bills and substantially increase value-add for merchants with digital invoicing. The start-up has served 4000+ businesses, managing over 15,000 retail POS, including giants like McDonald’s, Burger King, Decathlon, Baggit, Relaxo Footwear, and Cinepolis among others. This is the company’s 8th acquisition following the acquisition of Ezetap in August 2022. At a valuation of $7.5 billion, the Fintech unicorn is at the forefront of revolutionising India’s digital financial ecosystem. “From 10 billion transactions a month, UPI will scale up to 100 billion transactions a month in next few years. We provide the whole ecosystem from UPI acceptance to plug in to QR devices to make it easier for businesses,” he said.

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