“We are growing at 450% year-on-year and we should be market leaders in 15 months,” says Harshil Mathur, the 28-year-old CEO and co-founder of payment gateway Razorpay* Software Pvt Ltd. The fast-talking, straight-faced founder makes two eye-popping claims—about its projected growth and its market leader dreams—right there.

For a five-year-old startup in any sector, annual growth of 450% would be considered extraordinary. But payments is a bit of an anomaly. Over a billion transactions happen a day in India, and they have seen blazing growth. Almost 70% year-on-year. And the transaction turnover is expected to contribute nearly 15% of GDP by 2021, from the current 10%, according to the RBI’s latest vision document for payments. So, for a company like Razorpay, which aggregates and processes all payment options—Unified Payments Interface (UPI), cards, wallets—for merchants, 450% volume growth isn’t an overreach.

Mathur defends his market leader projection by stating that Razorpay has grown from 2% to 10% in market share in the past year alone. By 2020, he believes, it will shoot ahead in processing internet commerce companies’ payments. That means it will have to outdo the reigning payment gateway in internet commerce, South-African investor Naspers-owned PayU India.

Annually, payments worth $60-billion is made, of which, roughly half is from internet-based commerce companies, according to payments executives. IndiaIdeas.com Ltd-owned BillDesk, PayU India and CCAvenue India (now owned by e-commerce company Infibeam Avenues) traditionally held 80% share of online payments. But the difference is dwindling. A year ago, the difference in volumes between PayU and Razorpay was 12X, now it is 4X, claimed an executive close to the company, who didn’t want to comment on the record.

Unseating PayU will mean getting to some of its top merchants—Airtel, Ola, Ibibo, Zomato, Indigo, Oyo, BookMyShow and the like. Mathur says they are already processing most of the volumes with most of these merchants. PayU denies this claim and said its fight is only with cash. Merchants’ responses, meanwhile, have been mixed. Travel company Ibibo’s spokesperson said Razorpay only gets a small portion of its overall transactions. A source close to foodtech company Zomato said, it is not the leading gateway option. A senior official at cab company Ola confirmed that Razorpay is its preferred payment gateway partner. An Oyo official said the hotel chain is looking to move a significant share of its transactions to Razorpay. 

While Razorpay is considered a serious competitor, those in the industry are sceptical about Mathur’s claims. The one way Razorpay might get to that top position, they believe, is because of Rahul Kothari. Kothari is the head of enterprise sales at PayU, who, two sources close to PayU said, is joining Razorpay. “He is responsible for some of PayU’s marquee clients. When he moves, chances are those accounts will move with him and that’s more likely a reason for Razorpay to come on top,” says the co-founder of a fintech.

AUTHOR

Arundhati Ramanathan

Arundhati is Bengaluru-based. She is interested in how people use money in the digital age and how new economies will take shape based on that interaction. She has spent over 10 years reporting and writing on various subjects. Previous stints were at Mint, Outlook Business and Reuters.

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