Omnichannel payments and banking platform Razorpay will now let merchants enable instant refund of failed UPI transactions of their customers on Razorpay POS within 2 minutes, the company announced on Monday. Using the POS device’s fully automated system, the refund process will take up to 2 minutes compared to the industry standard of 5 to 6 business days, the company said. The process involves an attempt within 3 seconds of the failed transaction. In case of failure, the system persistently attempts thrice, each attempt spaced 5 seconds apart.
Razorpay POS CEO Byas Nambisan, citing internal data, said 5-15 per cent of UPI transactions see friction due to pending status and merchants lose their business in 30-40 per cent of the cases wherein the customer is not comfortable making a double payment via UPI or paying through any other method.
“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,” he said.
UPI payments have rapidly emerged as the norm for digital payment acceptance in India. In 2023, UPI platform transactions exceeded the 100-billion mark, reaching around 118 billion, marking a 60 per cent growth from the previous year’s 74 billion, as per data from the National Payments Corporation of India (NPCI).
Razorpay POS enables in-store payments and in FY23, it achieved a 60 per cent growth, contributing to nearly 10 per cent of Razorpay’s overall revenue.
Razorpay was among a number of fintechs including Cashfree Payments, OPEN, EnKash, etc., which were granted final authorisation in December last year from the Reserve Bank of India (RBI) to operate as payment aggregator. In May, the company’s neobank arm RazorpayX had launched ESCROW+ solution to help merchants with money transfers and avoid compliance issues as in certain industries, receiving funds in a current account is not an ideal solution for a business.
Established in 2014, the company has raised $741.5 million in funding so far from marquee investors such as Lone Pine Capital, Alkeon Capital, TCV, GIC, Tiger Global, Sequoia Capital India, Matrix Partners, Y Combinator, and more.