Razorpay POS Unveils Instant Refund Feature for Failed UPI Transactions

Razorpay, the omnichannel payments and banking platform, has introduced a new feature allowing merchants to enable instant refunds for failed UPI transactions on Razorpay POS. This enhancement leverages the POS device's fully automated system, ensuring a swift refund process completed within 2 minutes, in contrast to the industry standard of 5 to 6 business days.

Byas Nambisan, CEO of Razorpay POS, emphasized the significance of this development, citing internal data that revealed 5-15% of UPI transactions face friction due to pending status. Merchants, in turn, lose business in 30-40% of cases where customers are reluctant to make double payments via UPI or choose alternative payment methods.

The instant refund process involves an initial attempt within 3 seconds of the failed transaction, with the system persistently trying thrice, each attempt spaced 5 seconds apart. This streamlined approach aims to enhance customer satisfaction, trust, and expedite the checkout process for users.

Nambisan stated, "It was therefore critical for us to nip this in the bud by empowering our merchants to make these instant refunds happen, enhancing customer satisfaction, trust, and faster checkouts."

Significance of UPI Transactions in India

In India, UPI payments have become the norm for digital payment acceptance. In 2023, UPI platform transactions surpassed 100 billion, reaching around 118 billion, marking a notable 60% growth from the previous year's 74 billion, according to data from the National Payments Corporation of India (NPCI).

Razorpay POS Growth and Industry Authorization

Razorpay POS facilitates in-store payments and, in the fiscal year 2023, achieved a substantial 60% growth, contributing nearly 10% to Razorpay's overall revenue. The company, granted final authorization from the Reserve Bank of India (RBI) to operate as a payment aggregator in December of the previous year, is part of the growing fintech landscape in India.

In addition to its POS offerings, Razorpay has expanded its services through initiatives such as the RazorpayX neobank arm. In May, RazorpayX launched the ESCROW+ solution, designed to assist merchants with seamless money transfers and navigate compliance challenges, especially in industries where receiving funds in a current account might not be the ideal solution for businesses.

Financial Backing and Establishment

Since its establishment in 2014, Razorpay has secured $741.5 million in funding from prominent investors, including Lone Pine Capital, Alkeon Capital, TCV, GIC, Tiger Global, Sequoia Capital India, Matrix Partners, Y Combinator, and more.

Razorpay: Leading the Fintech Charge

Razorpay's commitment to innovation extends beyond instant refunds. In December 2023, it secured final authorization from the Reserve Bank of India (RBI) to operate as a payment aggregator, joining the ranks of leading fintech players like Cashfree Payments and OPEN. Additionally, RazorpayX, the company's neobank arm, launched ESCROW+ in May 2023, a solution designed to simplify money transfers for merchants and address compliance issues arising from receiving funds in current accounts in specific industries.

Since its inception in 2014, Razorpay has raised a staggering $741.5 million in funding from marquee investors like Lone Pine Capital, TCV, Sequoia Capital India, and Y Combinator. With its unwavering focus on innovation and a deep understanding of the Indian market, Razorpay is poised to remain at the forefront of shaping the future of digital payments in India.