Credit and Finance for MSMEs: No code products such as payment link and payment page, which were not very relevant earlier have become way more mainstream for SMEs and in fact the payment gateway, which traditionally dominated the space, has taken a backseat.
Credit and Finance for MSMEs: The increasing digital adoption led by the pandemic is seeing a rise in uptake of no-code products from small businesses that allow the user to deploy software without writing a single line of code. “Not every small business owner is an engineer. Many are intimidated by technology or they are solopreneurs and want to focus on running their business. Hence, the SMB promoters today are inclining towards digital tools that don’t require technical wherewithal or the need to hire additional tech talent,” fintech unicorn Razorpay’s SME Business Head Vedanarayan Vedantham told Financial Express Online.
“We’ve seen a huge growth in no code products such as payment link, payment page, and payment buttons, which were not very relevant earlier. Since the last 15 months, they’ve become way more mainstream for SMEs and in fact the payment gateway, which traditionally dominated the space, has taken a backseat,” he said.
Payment link offering enables vendors to send a link to their customers via an email, SMS, or messenger to pay for their purchases. This comes in handy for buyers who don’t use netbanking or UPI.
Of the 5 million SMBs using the Razorpay platform, over 35 per cent use payment link and payment pages as modes of accepting payments from customers. This was 10 per cent two years back.
This trend is accelerating as digitisation spreads to hinterlands and many more SMBs from those regions come online. The company onboarded 15 lakh new SMB customers last year. Of this client base, almost 35-40 per cent opted for the payment link as their first product of choice and another 20-30 per cent went for the payment page. “Many merchants who don’t have time to set up a full fledged website but want an online presence for their firm opt for a payment page where they can also showcase their products as they accept payments,” he said.
Another 25 per cent opted for the payment gateway. The rest is taken up by a long tail of niche payment products which don’t find mass resonance but are relevant for specific use cases. “One such product is payment buttons (where a payment tab is included into an existing website) which is suddenly seeing interest from 5-10 per cent of new customers,” said Vedantham.
Overall, payment solutions is the Bengaluru-based firm’s fastest growing segment contributing to 60 per cent of its business, followed by the other two verticals: neobanking product RazorpayX and lending solution Razorpay Capital.
Backed by marquee investors such as Sequoia Capital and GIC, the fintech major this year will focus on expanding its mobile app based offerings. “Currently, vendors can use it only to generate the payment link. The plan for the app is to potentially encompass the entire suite of products that we have across all verticals,” said Vedantham.