In India, Razorpay has cultivated a strong niche by focusing on payments infrastructure for businesses, what it describes as “full-stack financial solutions.” It helps businesses automate collections with its gateway service (which accounts for 80% of its revenue) and manage cash flow. This strategy differentiates the company from payments firms in India that focus primarily on e-wallets used by consumers as well as those like Paytm that have tried to do a little bit of everything, from merchant solutions to stock trading. Razorpay has a wide array of clients, including Indian tech firms Ola, Swiggy and Zomato as well as Facebook.
In a mid-April conference call, co-founder and chief executive officer Harshil Mathur said that the company’s revenue and payment processing volume had both grown more than threefold in the fiscal year ending March 2021. 5 million businesses use Razorpay’s infrastructure now, compared to 3 million a year ago. Marthur added, “We process about $40 billion annualized payments volume currently, compared with $12 billion a year ago.”
As far as profitability goes, Razorpay says that its payments business is breaking even. The credit and neobanking (which does not include lending) businesses appear to still be loss-making,
While some Indian fintech unicorns like Cred and Pine Labs plan to apply for a lending license, Razorpay has no such plans for now. “We want to focus on our strengths which is a tech and platform solution for enterprises looking to solve their banking needs,” Mathur told The Economic Times.
However, like Pine Labs, Razorpay does plan to expand into Southeast Asia, an ultracompetitive market for payments, whether domestic or cross-border. By the end of 2021, Razorpay plans to offer its payment gateway service in the Philippines, Vietnam, Indonesia and Malaysia.
At the same time, Razorpay is considering acquiring software-as-a-service (SaaS) platforms and may also add services such as treasury management, remittances, business reconciliations and real-time reporting for SME clients.