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Razorpay (YC W15) offers Stripe-style payment experience in India (techcrunch.com)
153 points by harshilmathur on March 23, 2015 | hide | past | favorite | 98 comments

Co-founder Harshil here. We built this when we saw how the payments experience was a mess in India compared to the western world. The payments in India are much more complex than USA and Europe because of the strict regulation, multiple payment methods and unreliable bank gateways among other things. Consequently, the on-boarding experience sucks and failure rates are in double digits. We aim to tackle these issues and shield the merchant from them, to provide a seamless, easy to integrate experience. If you have any questions, fire my way!

First up, congrats to you and Kumar. It takes a tremendous effort to tackle something like this in India.

0. How does your product compare against juspay.in and payzippy (which I believe has been discontinued)?

1. How much development do you plan to do open source?

2. Who have been your mentors?


0 - Payzippy was discontinued. And even so, their offerings were not much different from other gateways in the country.

Juspay offers their integration on top of other gateways. Thus, it solves only part of the problem, since you still have to deal with tough onboarding process.

1 - We are very grateful of the open-source community and do plan to give back to it in whatever ways we can. Follow our github organisation and you will not be disappointed.

2 - YC partners are really great and have provided most of the mentoring we needed. Plus, other YC companies alums form a very strong network which help you out when you need it.

Any mentors from the Indian start-up scene that you've looked to advice for?

Yes, Chintan Bakshi from Jaipur helped us during pre-YC days.

would like to hear about your YC experience - especially as an India-focused-and-returning-to-India-after-YC startup.

This has been fairly new on YC's side and would like to hear from you what your view is.

YC experience has been really awesome. Whether you are in India or anywhere, noone can help your startup as much as YC can. We will do a separate blog post on that soon to explain it in more detail.

This sounds like a really awesome startup. I'd love to know if you are ever looking to hire a software engineer (~2 years experience).

I work on an Indian e-commerce site, so just from contact with my friends on our payments team I know how complicated payments are in India.

Sure, just drop an email: shashank@razorpay.com

Great work, and thanks for coming forward to answer the questions. If I were to build a funnel for payments (banks/insurance/corporates at one end and small merchants/SOHO stores/utility services at the other) how easy or difficult is it to use razorpay's services (considering a team of two with decent full-stack programming experience)? What sort of legalities would I be bound with Razorpay along with the vendors/entities at the receiving/sending endpoints?

If this isn't a right forum for this question, can I drop a mail to discuss further?

Thanks again!

Hi, what you need is a marketplace. While, we do support that, it takes time to get approvals for it. Please drop us a mail at contact@razorpay.com and we can discuss this further on how to speed it up for your use case.

Thanks. One of my friends was looking at building a bill pay portal (akin to freecharge) with a wider set of endpoints. Will get further questions clarified via an email.

And BTW, the API docs via readme.io - real good!

Sure, drop us an email at contact@razorpay.com and we can take that further.

Yeah, Readme is part of current YC batch, they are awesome!

Thanks for the props, Harshil! ReadMe is psyched to be working with you; you've done a great job with our product!

I know you guys have used Stripe like experience to describe razorpay. We used to use Payzippy which was similar though had a few glaring differences.

I had a couple of questions as we need something like this.

Could you outline the differences due to the legal framework? Do you allow tokens/can customers save cards?, what about 3Dsecure? Can we use POST like api calls or do we use a very customisable iframe? Can you guys do pre-authorisations (such as when capture is false on the stripe api when you create a charge)?

Payzippy was better but still was cumbersome to integrate, we have a much easier experience, you can checkout https://docs.razorpay.com for more info. - We do not support card tokenisation right now, it is in roadmap. - We do support 3D secure but handle it compeltely on our end, the merchant need not worry about handling it. - Right now, we provide iframe integration, but we will support POST calls very soon. Frankly, not many customers have asked for it. - We support Authorization and Capture Based payment but yeah pre-auths like those in US are not supported because of regulatory hurdles.


- Payzippy was better but still was cumbersome to integrate, we have a much easier experience, you can checkout https://docs.razorpay.com for more info.

- We do not support card tokenisation right now, it is in roadmap.

- We do support 3D secure but handle it compeltely on our end, the merchant need not worry about handling it.

- Right now, we provide iframe integration, but we will support POST calls very soon. Frankly, not many customers have asked for it.

- We support Authorization and Capture Based payment but yeah pre-auths like those in US are not supported because of regulatory hurdles.

How do you handle recurring payments without the user having to enter their PIN (or whatever again). I'm talking about subscriptions like in Stripe?

Also, how do you get around the step where the user is redirected to the bank page to enter the 3D secure pin / internet banking password / IPIN?

We currently don't support recurring payments, but it is in the plans. It won't be as easy as in US-based gateways since recurring payments are not really supported by RBI.

Harshil and shk answered this here as well: https://news.ycombinator.com/item?id=9250136

Hey Harshil,

This looks good! What details do I need for activation? Can you charge customers in other currencies?

You can just signup in 2 minutes and start using it in test mode. Meanwhile, you can fill the activation form with basic KYC stuff to go live. The activation form should take you about 15 minutes to fill with everything on hand. Right we only support charging in INR but we do support international transactions. Support for other currencies will be coming shortly.

This looks great! We recently setup an e-commerce site in India that is using the ICICI payment gateway and it took us over 2 weeks for all the paperwork, setup and integration. Plus the initial setup cost was substantially more than 5K. Just to confirm - are you saying that you have reduced that entire process down to just 15 minutes? If so, that is just an incredible feat and kudos to you and your team. Just a few questions -

- How are you validating the customer's business information and bank details?

- How do your transaction fees compare to ICICI and the others?

- Do you have modules/plugins for integration with any of the popular e-commerce platforms? ( We are using Nopcommerce)

Hey, thanks for the kind words. The activation form will require 15 minutes to fill up and we can take you live in a day or two after that. - We are using PAN and CIN api from govt. of India to verify a lot of details. We ask for the scans of few proof documents (much less than others). - Our transaction fees are on our website http://razorpay.com - We do provide integration plugins for almost all eCommerce platforms including nopcommerce

Great - thanks! We will be certainly signing up soon. We have a couple of other projects in the works that can benefit from this as well.

@t3ra I don't see a reply button below your answer. By bank side "security-check" do you mean 3dsecure? If so, then we handle it and the website doesn't need to do custom modification because of it.

(You have to wait for sometime before reply appears -- i guess)

During the initial onboarding process and filling paper work, we were told the site will do through a specific "bank-side security check" in which the bank officials will check the site for security issues.

Also we were forced to add links to ToS, privacy policy, etc on the first page of the website or else they wont give us the damn PG (even after the pages were visibly linked on the "shop" part of the site)

Hi, Yeah those links are mandatory by Indian banks but we do provide templates for them that you can modify for your use case. And as long the links are on your site, we will handle the rest (visibility etc.)

Atleast you guys have templates :D

Best of luck guys... And start accepting bitcoins soon ;p

Thanks. We will do it soon :)

Is there no "bank side security check" (we were forced to add a specific "e-commerce flow" to the website because of it)

The pricing is Stripe-like if only handling domestic transactions. If a customer wants to sell internationally too then there is

  * 5k setup fee

  * 5k annual fee (excluding service tax). Approx $90/yr.

  * 2% per transaction
Instamojo provides a nice payment experience too and with a fee of 1.9% per transaction (if you don't use the hosting feature).

Wonder why the more expensive pricing. A simplified per-transaction pricing would be nice to sell internationally. Maybe increase the per-transaction charge for international transactions or add a fee like $0.5 extra.

P.S: I'm not affiliated with Instamojo in anyway. I've been on the hunt for a payment solution recently and settled with Gumroad actually.

Hi, You are right, we want to make the pricing more uniform as we go. But there are some limitations around that we need to solve. As for instamojo, they have a good product but they are not a payment gateway in the stripe sense, they are more of gumroad. They support specific type of products whose amounts needs to be pre-decided on their platform. While, we support all kinds of online transactions which you can integrate directly on your site.

Ah yes, I was only comparing from a seller's PoV. Most non-ecommerce startups have fixed plans/pricing I guess.

B/w you might want to link to the http://docs.razorpay.com site in the "documentation" link on your homepage. And maybe rename that /documentation url to /faq instead.

In all the excitement, I did forget: Congrats on launching ~!

Thanks! Yeah, that's a good point, we will fix that.

Congrats on launching in India. It's great to see activity in this space.

I see a tab called "Education" which seems to list a specific use-case for a payment processor. Any particular reason you have that as a dedicated tab there? Is that the market you're positioning the service for?

Also, just curious, mind elaborating on this from the article:

  "Right now, for a business to take online payments in the country, 
  it needs to go through a lot of paperwork, bureaucratic red tape, and wait time, 
  often in a process that needs to be done region-by-region."
Specifically, how do you guys work around this?

Our initially entry point in the market was education sector but now we offer gateway to any business accepting online payments.

We have to follow the law of land and regulatory compliance but most of the red tape that the current gateways ask for is not required by regulation. The gateways are trying to make onboarding too safe and hence end up making it very complex. We want to protect the merchants from the dirty work of dealing with regulation through a very streamlined interface and we handle everything in the background.

Where can I try your payment experience?

The TC article says you're live on Shifter, NanoWE & Zostel. But, Shifter doesn't seem to have an online payment option, Zostel redirects me to PayU and cannot find anything to buy on NanoWE.

Hi, this is Akshay, founder at NanoWE. Our marketplace is live at www.nanowe.com/demo but isn't open yet for buying products. We're using Stripe for the US customers and recently successfully tested and integrated Razorpay for the Indian customers. I'd recommend Razorpay as it eliminates the pain of too much paperwork - and of course their support is amazing, the team always goes a step ahead to help you onboard!

Thanks for the kind words :)

Hi, Zostel has recently signed up and have not migrated fully to us. You can signup on dashboard.razorpay.com and test the payment experience on it. Also, you can chat with us after signup and we can give you list of more merchants where you can use our gateway. Thanks!

shifter.in has online payment option which becomes visible to customers only if they have payment due. Once the customer completes the trip, he/she can login and pay via razorpay.

Hey Harshil, Congrats man! Nice to see startup coming from Jaipur. As a marketer, one question comes to mind, How do you think you will get the user base?

Till now, we have mostly tapped our friends, Jaipur and IIT network. We have already got good traction without any PR. We are mostly targeting startups, ecommerce and other early stage ventures at the moment and evolve our marketing model from there.

Just added you on Producthunt!

0 - Have a well timed HN post + TC article for starters :P

That too :)

It's great that there are companies targeting these specific geographies -- however, if the market is large enough and worth going into, wouldn't Stripe itself want to solve these issues? Of course, having senior leadership / on the ground folks in India is an advantage to navigating that, but isn't that what international offices are for~

Frankly, we were tired of waiting for Stripe to come and improve the payment ecosystem that existed in India :D On a more serious note, Stripe has only entered payments markets that are similar to US. India is very different from those markets and for tackling it they will have to modify the product significantly to meet the regulatory rules like 3D Secure and support the dominant local payment methods. And if they do try to do that, we will still have a couple of years head-start.

If they do a good job, Stripe may just want to buy them.

Congratz on the launch.

I have some questions

1. If a startup is not incorporated, can we still use Razorpay ? I guess instamojo allows it

2. If I have a static site, can I still use Razorpay for payments ?

3. What is the turnaround time for depositing the money into sellers bank account ? What is the frequency ?

4. Do you provide some webhooks functionality ?

I'll leave the rest for harshil and shk to answer.

2. Currently, we follow an auth+capture model. Our authorization is completely client-side, which means it can be performed in a browser. However, to make sure that others cannot use the same code as yours to authorize payments, captures require you to have a backend of some sort.

4. Currently no, but we plan to do this in the future.

1. Not at this time. We will be launching support for that soon. 2. Yes, you can but then you will have to manually capture the payments from dashboard. 3. The money is transferred on T+2 day where T is day of transaction. 4. Not a this time. We definitely want to support that very soon.

Thanks for the answers.

Reg (2) Is it like https://stripe.com/checkout ? What you meant by capture the payments from dashboard ? Do you mean I have to pull the payment details from dashboard api ?

One last question : How extensively net banking is supported ?

Yes, its similar.

No, you just need to login on the Razorpay dashboard and click on capture on the payments you want to transfer to your account.

We support 35+ banks in netbanking right now.


Some of q & a here can be part of FAQ section in the site.

Sure. We will update it going forward.

Congrats on launching! How will you differentiate yourselves from Stripe when they launch in India?

We will always have the local player advantage over Stripe. Payments is closely related to the infrastructure of the country and hence, just copy paste of US model won't work. Plus, clearing regulatory hurdles and modifying their platform for supporting local instruments of India will take 1-2 years, so we will have that headstart too.

Hey Razorpay team. Big congrats on the launch :) I had a question on competition in the market. Many posts here have highlighted big players like PayU, CCAvenue and small merchants focused players like Instamojo, Gumroad.

Recently, HDFC announced new strategy around cards to be accepted by small players (http://timesofindia.indiatimes.com/business/india-business/H...). Do you think this will affect you especially in terms of the transaction fees?

The article is very light on details so cannot comment concretely without more context. But at a guess, I think this might be for physical card transactions since it mentions swipe machines specifically.

Just to confirm, this still isn't going to support tokenizing a card and charging it later at will? I'm guessing that's still illegal in India.

Charging later at will is not allowed by regulations in India. An explanation of why it might be so - https://news.ycombinator.com/item?id=9206182

Please come to Costa Rica! You can work with the Banco Nacional which has a partnership with Paypal also. We need to have a developer-friendly service.

Would be very much interested if you guys can figure out a way to create recurring subscriptions. I have been looking for a solution for a very long time and just posted a thread here on HN about it [1]. Would love to hear your thoughts and how you plan to offer it.

[1] https://news.ycombinator.com/item?id=9205892

Hi, Yeah, we saw that thread and it was really interesting. My co-founder replied there too https://news.ycombinator.com/reply?id=9206182&goto=item%3Fid... .

At this point, I can only tell you we have a plan to launch this very soon.

Hi – this is a wonderful start towards solving a problem which seemed to have been relegated to the distant future. I was wondering, do you folks support the 'aggregator' model - where a startup can simply serve as the facilitator of the payment without actually holding the money?

Wrote a mail to you as well to understand better how I can integrate your solution.

All the very best!

Hi, We do not support that model at this point because of additional regulatory hurdles. We do have it in our roadmap though.

hey , congrats for getting into YC , our Indian market greatly need a awesome and friendly payment gateway provider

few things i would like to ask

• how many people are currently employed in razorpay , what about customer service?

• integration with magento , woocommerce etc is available right away ?

• do you provide wallet services ? , and what about legal issues regarding storing card info ? i see you are pci cleared , can you clear a bit ?

• Are all credit /debit cards are supported ?

• You say i dont need a different bank account , i have an LLP , and have a ecommerce store that deals with fashion , so i wont need to have a account in LLP's name ? what about PAN card ?

the biggest hurdle is regarding the red tape and legal issues in India , if you can take care of those this is a huge demand for a service like this ( you have to scale hup your market and give an awesome experience before stripe decides to come in India )

good look , would love to be in contact :)

- We are a small team right now, but we can assure you will get better service than many of the large companies

- Yes integration with shopify, magento, woocommerce, opencart, cscart, nopcommerce, whmcs etc. is already available.

- We are PCI Certified but we do not store card numbers and we do not provide wallet service at this time.

- Yes, all CC/DC are supported

- You will need the bank account in the name of your business. What we mean is you don't need a separate merchant account for accepting payments which some bank gateways ask you for.

Yes, that's what our aim is, to protect the customers from the red tape and complex regulatory issues while providing a clean integration experience.

thanks and good luck

A lot like Instamojo, but Razorpay looks more refined product. Signed up and used the API a bit. Using it was a breeze. Also the documentation is like Stripe which helps a lot.

Congrats on the launch! I am hopeful that recurring transaction problem will also be tackled later on.

Thanks for the kind words! And, yes, we are definitely working on the feature.

Hey guys, best of luck in your efforts.

I have a question, while it makes sense to have payments in the range of 100s I see 2.5% adding up to uncomfortable amounts easily in the range of 1000s and beyond that it's a mini heart attack :P

Do you plan to have a max cap on your charges?

Hi, unfortunately Visa, Mastercard and other card networks charge in percentage terms without a cap and there is nothing anyone can do about it. We do offer better pricing at volume. Also, think of it as a cost of doing business like service tax which is also always in percentage. Even huge players amazon, flipkart have to pay it in percentage terms only inspite of their enormous volumes.

Oh, thanks. Didn't know that. I wonder if it's so just because these big companies control almost all the cash flow or there are costs which increase linearly with the paid amount.

Yes, most credit cards and debit card transactions have to be routed through their network and they charge in percentage only. Their costs are hardly affected by the paid amount but that is the business model they and all the banks pursue to make it uniform for all big and small players.

Noob question. Does pricing of payment gateways include interchange fee for card based transactions? If not then that means online payment cost is 5-6% of the transaction value to the merchant (say for 2% interchange fee) which seems huge.

Hi No, the pricing we have given on our site includes interchange fees as well.

Congrats on launching! . I have also been interested in launching a Payments startup (but mostly mobile based). If possible, Can you point me to the regulation requirements for a payment gateway in India ?

Thanks. The most important regulation is the "Payments and Settlement Act" of RBI. Sorry, I can't link to their website, they do not allow it but just google it.

Great Work. How do you plan to support recurring transactions with minimum manual intervention? (I think they do not allow automatic charges of CC in India)

We are still working on this and will share details once we have something concrete.

Will you be adding support for recurring transactions for non indian credit cards?

Hi, We plan to in the future. We haven't many people requesting it since most of them have majority of Indian customers which can not have recurring billing

How will you reconcile recurring payments with 3D secure requirements?

One way to do that would be to monitor SMSes for 2FA codes. This can be easily done on Android and iOS. The app can run the payments flow in a phanthomjs esque environment and read off 2FA values from the SMS inbox, and bam! Payment done. Also, there are other options for authorizing recurring payments but at fixed amt, and paper work can't be avoided.

Not every bank sends 2FA codes via SMS. For example my debit card with SBI has a static password that I need to put in for every payment

In that case, you could provide the user with a on-device one-click authenticate button (via notification/email, reminding her/him to approve the payment) that'd push the credentials out to your phantom-js instance. I am not sure what RBI complaince mandates, but one might be a strongbox.io away from implementing such a scheme server-side as well, if legal. A lot of care must go into securing such systems, no doubt. And there might be simpler alternatives that I simply cannot think of.

Just like cvv, we are not allowed to store the static passwords.

Well, you don't really store the passwords on your servers, but rather store it on user's own devices (in a keystore, for instance). The user then agrees to push the credentials to your servers periodically instead of typing the password to authorize the payment.

We have a few tricks up our sleeve.

heyy congrats harshil a long way to go

many startups are gonna place trust in you ( including mine) , ball is in your court , win them over good luck

P.S what will be procedure of shifting from CC avenue to razorpay

and get wallet service as soon you can

Thanks a lot for your trust. I don't have much idea of how you have integrated with CCAvenue, but our docs are pretty easy to understand and explain integration steps pretty well.[0]

[0]: https://docs.razorpay.com/

sorry for the noob question but what will be the way to send a payment confirmation sms to customer ( magento)

Once the payment is confirmed, our integration passes the control back to your code. You can use any sms API such as twilio to send the sms then.


how are you solving the 2 factor authentication by RBI ?

We support 2-step authentication as mandated by RBI.

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