Bengaluru-based payments solution company Razorpay plans on entering the enterprise online lending space, with the expansion of its 2.0 strategy — that facilitates automated digital transactions — as it seeks to further evolve into a full-stack financial services company.
The company has launched a vendor payments service that will allow its clients to manage account payables, critical for small and medium enterprises to manage their liabilities.
According to Razorpay CEO Harshil Mathur, the company plans to introduce a complete financial suite that will not only address the payment journey of business but also help businesses with an end-to-end financial management solution for any businesses.
Razorpay: Working On The 2.0 Strategy
Razorpay 2.0 was launched in September 2017, aimed at solving the management of the entire flow of money for the underserved businesses in the country.
Mathur earlier told Inc42, that as part of Razorpay 2.0, the company will also scale up its four products Razorpay Route, Razorpay Smart Collect, Razorpay Subscriptions and Invoices to bolster its technological capabilities and offerings.
Currently, Razorpay is beta testing its lending platform. Here’s a quick run-down of Razorpay 2.0:
- The platform has already been integrated with payments solution and has been offered to 100 merchants till now.
- The company plans to expand its lending service to over 1,000 merchants in two months.
- The company will Initially provide only the basic working capital loans
- To execute the lending process, it has tied up with two financial institutions, whose names remain undisclosed
The launch of new products is a part of the 2.0 strategy as the startup seeks to evolve into a converged digital payments solutions company.
Razorpay’s Journey T0 2.0
The company was launched in 2013 and has clocked in a healthy growth rate of 25-30% month-on-month and aims at impacting lives of 500 Mn end consumers by 2020.
Recently, it has also closed its Series B funding round of $20 Mn led by existing investors Tiger Global and Y Combinator, and participation from Matrix Partners. The funds were raised for expanding the product portfolio into new verticals, building new experiences through cutting-edge data science, and expansion of the team.
After the launch of new services in September last year, Razorpay plans on integrating its UPI 2.0 — an upgraded version of Unified Payments Interface (UPI) — in its existing B2B services and is also agnostic about integrating blockchain technology — a distributed ledger technology — to its services, wherever it will be applicable.
Razorpay is not alone in the domain, however. There are major players such as WhatsApp Pay, an in-chat payment feature for users; Google Pay, a digital wallet platform and online payments system; BHIM App, a mobile app based on UPI; and PhonePe, a financial technology company.
India’s digital payments segment is the largest in the market. According to statista, a total transaction in India’s digital payments segment was $51.7 Mn in 2018. The number of users is expected to grow to 467.52 Mn by 2022, with total transaction value estimated to be $98.3 Mn, and growing at an annual growth rate of 17.4%.[The development was reported by ET]