Bengaluru-based payment gateway platform Cashfree has introduced Subscriptions, a solution for businesses to collect recurring payments for utilities, subscription services, mutual fund SIPs and other needs, with a one-time enrollment by the user.
With an increasing number of web apps, startups and other businesses going the subscription way, recurring payments is a gap in the market. Even in the ecommerce sector, recurring payments is a fast-growing concept, even though it is fairly novel. Businesses face many challenges in this context, including billing users, maintaining subscriptions records, messaging customers, supporting users from different regions and others.
As per official records, less than 3% of Indian bank account owners currently have credit cards. And because recurring payments are largely available through credit cards, this poses a huge challenge for businesses.
“By introducing Subscriptions, Cashfree makes it possible for businesses to automate the whole payment collection process for repeat transactions while offering customers the widest range of payment modes,” said Akash Sinha, CEO and co-founder of Cashfree.
Cashfree Subscriptions: How Does It Work?
The Cashfree’s recurring payment solution can be used by businesses to collect periodic payments for a fixed amount over a fixed duration, such as monthly billing for a video streaming platform.
This service also has use cases in on-demand payments where businesses such as bill payment platforms can define the amount and deduct it, without the customer having to enter a One Time Password (OTP) every time.
At the moment, there will be no additional charges on payments made via e-mandate through Cashfree till December 31, 2019. In the coming weeks, it also plans to add recurring payments via UPI.
Using the Cashfree Dashboard, businesses can create subscription plans and add users through SMS, email or WhatsApp alerts. Businesses can also integrate the Cashfree API with their internal product or enterprise resource planning (ERP) to automate the entire process.
The Subscriptions service is already live with the first set of Cashfree customers and the company expects to process more than INR 20 Cr of recurring payments this year.
Cashfree: Aiming To Change The Ecommerce Payments Game
Backed by investors such as Y Combinator and Smilegate Investments among others, Cashfree was launched in 2015 by Akash Sinha and Reeju Datta. The company offers a number of services to ease out payments processes for digital platforms.
After raising $5.5 Mn (INR 38.2 Cr) in its Series A round of funding in April 2019, the company recently launched a first-of-its-kind solution ‘instant refunds’ for online payments for ecommerce and other online services such as food delivery etc.
With Cashfree’s instant refunds, ecommerce platforms would be able to immediately return their customers’ money through their original online mode of payment, whether it is credit or debit card, bank account, online wallet or UPI.
“Refunds being slow is one of the major causes of bad customer experience for an online business. Around 50% of the support time is spent in resolving complaints regarding refund delays for a merchant and for us as a payment gateway,” Datta told Inc42 in an earlier interaction.
With these new features, Cashfree has the edge over competition such as Atom Technologies, CCAvenue, BillDesk, OBOPay, Ingenico, RazorPay among others. The launch of Instant Refunds and Subscriptions is a well-timed move. As per the notification issued, the Reserve Bank of India (RBI) has permitted the processing of e-mandates on cards for recurring merchant payments. Also, as part of the government’s proposed guidelines for ecommerce under the new Consumer Protection Act, firms would be granted a maximum of 14 days to fulfil refund requests from customers.