Razorpay: The Story of a Fintech Startup That Changed India’s Payments Forever

Razorpay: The Story of a Fintech Startup That Changed India’s Payments Forever

“Great startups don’t begin with a plan. They begin with a problem that refuses to be ignored.”

— Shashank Kumar, Co-founder, Razorpay

In 2013, two new engineers from IIT Roorkee, Harshil Mathur and Shashank Kumar, were working on an online crowdfunding website. However, as they attempted to set up payment methods online, they ran into roadblocks. The process was terribly slow. Banks requested mounds of papers. Connections were sluggish. Even simple tasks like receiving payments took weeks to set up.

That's when they realized the issue wasn't their startup—it was the dysfunctional payment mechanism. If they were struggling, many other entrepreneurs and small enterprises must be struggling as well.

So they took on a challenge. They abandoned the crowdsourcing concept and embarked on a new mission: to create a seamless, cutting-edge, user-friendly payment system for India.

That goal eventually evolved into Razorpay.

Starting Small and Having Big Dreams

With only a prototype and an ambitious idea, Harshil and Shashank submitted an application to Silicon Valley's esteemed business chamber, Y Combinator. They were shocked when their application was accepted. They flew to the United States in 2015, made a pitch, and came back with a strategy to alter India's payment system.

Razorpay's idea was centered around the straightforward goal of making digital payments convenient for all businesses, regardless of the size. No tough documentation, no slow processes.  Just a few clicks and your payment is done.

In a matter of months, startups and small enterprises started signing up. They admired Razorpay's simple design, developer focus, and straightforward approach. For the first time, it felt as if a payment partner was tailor made for them rather than large businesses. Soon thousands of enterprises started signing up for Razorpay.

Developing with India's Digital Wave

Powered by smartphones, UPI, and the government's push for cashless transactions, India's digital economy grew rapidly, and Razorpay expanded with it.

Razorpay didn't just focus on payment channels. It continued to pay attention to what companies required.

What they constructed:

With RazorpayX, a neo-banking platform, companies can manage their finances, automate payroll, and pay their vendors all in one location.

Razorpay Capital offered short wait times and simple loan applications to small businesses based on their transaction history.

They created smart tools like subscription billing, fast refunds, QR code-based payments, and payment links.

In 2020, millions of companies were forced to go online overnight due to the COVID-19 epidemic. Razorpay was prepared. It launched tools to assist NGOs, small businesses, teachers, and fitness instructors in beginning to take payments from any location—even without a website.

Razorpay became a lifeline for many.

Empowering Entrepreneurs in India

More than 10 million Indian companies are currently powered by Razorpay. From small, independently owned bakeries and tuition centers to internet behemoths like Zomato, Ola, and Swiggy. Razorpay assists businesses with cash flow management, vendor payments, payment collection, salary payments, and even loan applications.

It goes beyond software. The goal is to make entrepreneurship seamless and easy.

A young person in a Tier-2 city may launch a craft business on Instagram and start receiving money the same day using Razorpay. An instructor in Lucknow can instruct students remotely and accept payment using Razorpay. 

Developing into a Unicorn and Beyond

Razorpay, a financial business valued at over $1 billion, became one of India's few fintech unicorns in 2020. For Harshil and Shashank, however, that was only a turning point rather than the end goal.

Razorpay's crew expanded to thousands by 2024, and the company was valued at over $7 billion. The goal of making money transfers easier for companies of all sizes hasn't changed, though.

Compliance and security also rose to the top of the list. Razorpay made every payment safe, quick, and legal by collaborating closely with banks and the RBI.

The Path Ahead

Razorpay's tale, which began with an issue faced by two young entrepreneurs and has grown into a firm that is revolutionizing commerce in India, is proof of the strength of listening to genuine problems and addressing them with guts, heart, and technology.

What is the best part? The narrative is just getting started.

“We didn’t start Razorpay to build a company. We started it to solve a problem—and solving problems is what we’ll keep doing.”

— Harshil Mathur, Co-founder & CEO, Razorpay