Digital payments company Razorpay, which has been barred from onboarding new customers for its payment gateway business by the central bank, is now trying to generate more business from existing customers through new product lines, as it tweaks its go-to-market strategy. ‘In our GTM (go-to-market strategy) we are now far more focused on driving penetration of our products with existing customers and how we can drive it deeper,’ said Rahul Kothari, chief business officer, Razorpay, in an interaction with ET on Monday.
The company launched its latest solution, Optimizer, on Monday. Optimizer will allow businesses with large transaction volumes to avoid transaction failures and reroute transactions in real time. By integrating with the payment rerouting solution, businesses will also get access to different bank payment gateways, through a single integration. With Optimizer, the payments fintech is looking to increase payment success rates by 10% for businesses.
However, most of the 50 businesses that have adopted its Optimizer stack are existing customers.
Razorpay has also launched its international payment gateway in Malaysia, and is aggressively focussing on its offline play (through Ezetap) to increase merchant acquisition.
The fintech claims to currently have a base of 10 million businesses, including small and medium enterprises (SME), as customers.
According to Kothari, overall revenue share from new customers has shrunk from 30% earlier to 12%-15%, leading to a shift in the company’s GTM strategy to tap its existing base.
As a part of a panel discussion at the ET Startup Awards 2023, Razorpay chief and cofounder Harshil Mathur also said that the prime metric of the company was ‘product per user’, which means increasing the adoption and density of its products across its customer base.
Woes remain
Last December, the Reserve Bank of India had asked Razorpay to stop onboarding newer merchants for its PG business. The firm is awaiting final nod on its payment aggregator licence.
The RBI had subsequently also asked Razorpay’s rivals Paytm, Cashfree and PayU to also stop onboarding new businesses, causing significant heartburn to the fast-growing industry.
Almost 10 months in, Razorpay along with its rivals are yet to receive the green signal from the regulator to onboard new merchants.
While newer payment gateway merchants don’t immediately start contributing to the topline, the impact of the pause will be seen on players like Razorpay in the coming fiscal years, as their base to cross-sell other products shrinks.
In Razorpay’s case, almost 65% of its customers have integrated with more than three products, according to the company.
The company declined to comment on the new merchant sign-ups seen last year as compared to this year after the RBI directive.
“Usually a customer takes up another product after they have been onboarded for a year on our platform,” Kothari said.
Currently, the company’s offline point-of-sale (PoS), payroll management and escrow product suite continue to draw the most merchants to the platform.
“We have been innovating and different innovations require different gestation periods. Of the current product suite that is offered, we have some synergies for offline and will launch new products accordingly,” said Khilan Haria, senior vice president and head of payments product, Razorpay.
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