To help merchants improve the online payment experience for consumers, Razorpay, which is backed by investors such as Tiger Global and Sequoia, has unveiled a new product called ‘instant refunds’ for businesses.
This new feature activates refunds and credits the customer’s source account across payment methods such as credit cards, net banking and Unified Payments Interface (UPI) within a minute of initiation.
“Our ‘instant refunds’ feature ensures that the refund is processed at a 3600x faster pace than the expected time of 5-7 business days. The team is focused on creating new technologies designed to make the entire payment lifecycle hassle-free,” said Shashank Kumar, chief technology officer and co-founder of Razorpay.
He added, “We believe this new feature will take the customer experience a notch higher, help brands create competitive advantage, and even make them more profitable.”
India is one of the fastest-growing online retail markets. About 71 per cent of internet users in the country purchase products online. The company has said the refund process has two major pain points for both the end customer and business. This includes a delay of 5-7 business days for the customer in receiving the money because of multiple intermediaries like the acquiring bank, issuing bank and networks such as Visa, Mastercard and Rupay.
There is also lack of transparency during the entire refund process for both the customer and business. This long cycle of processing refunds is a significant problem with every popular payment method in the industry.
“This causes a lot of negative experience for customers because they want the refund quickly. If it takes too long, they get agitated, call the merchants, banks and the entire experience becomes bad,” said Harshil Mathur, CEO and co-founder of Razorpay.
The firm has already tested innovation for Swiggy. “In Swiggy, if you place an order and receive an incorrect (item) or some of it is missing, you can tap the refund (option) and get the money instantly and this is powered by Razorpay. Their customer satisfaction increased 10 per cent just because of this one feature. We are now making this technology available to all our merchants,” said Mathur, whose firm has applied for a patent for the innovation.
Razorpay is currently powering payments for over 800,000 businesses and it plans to take the innovation to all of them including firms such as Indigo, BSE, Thomas Cook, Reliance, SpiceJet, Aditya Birla, Sony and Oyo.
The company plans to increase its reach to over 14 lakh businesses this year.
By issuing refunds instantly, Razorpay said it will help businesses retain their customers, build trust through an improved hassle-free payment experience and provide complete transparency on refunds to both the business and end-user.
“A solution like ‘instant refunds’ will not only help build consumer confidence in digital payments but also reduce losses for e-commerce companies
where CoD (cash on delivery) has become an expensive option with more than 50 per cent online transactions made through cash,” said Kumar of Razorpay.