MasterCard has made a strategic investment in Razorpay, an online payment gateway solution, today. This is believed to be MasterCard’s first and only investment in an Indian financial technology company and second investment till date.
This investment is a part of the ‘Start Path’ programme launched by MasterCard. The programme aims to support different startups that are building technologies in finance and commerce. With this association, Razorpay will be receiving technology enhancements and will be able to tap into MasterCard’s global risk and fraud expertise.
Razorpay has raised a total of $11.5 million from Tiger Global, Matrix Partners and other angel investors like Naveen Tewari, Founder and CEO of InMobi; Kunal Shah, Founder of FreeCharge; Kunal Bahl, CEO of Snapdeal; Rohit Bansal, Co-founder of Snapdeal, and others.
“This investment will give us access to MasterCard’s knowledge base and expertise, thus bringing us newer technology and tools, which weren’t available. The investment will also help us build deep relationships with banks, thanks to the MasterCard name. It will help us expand internationally in the next six to eight months as well,” says Harshil Mathur, CEO and Co-founder of Razorpay.
Launched in March last year, Razorpay has onboarded over 8,000 merchants. The startup accepts and validates internet payments via credit, debit cards, net banking, and popular digital wallets from the end customers in real time. It does this by providing a secure link between the merchant website, various issuing institutions, acquiring banks, and other payment networks.
Its core focus is on reducing the failure rate during online transactions. Harshil adds that they are working closely with MasterCard to get in a seamless integration and technology base to enable the same.
“The MasterCard Payment gateway is seamless and has better technology, which isn’t found in India. The aim is to bring these tools and technology to India and make our back-end infrastructure strong and robust,” says Harshil.
The team currently is aggressively working towards UPI (united payments interface). This, Harshil adds, will allow them to launch their newer product lines, which are currently work-in-progress. It will also make subscription based and automated payment easier, which weren’t possible earlier.
“We are working on newer modes of payments, automated debits, and subscriptions. We are looking to expand into South East Asia and Middle Eastern countries in the coming few quarters,” says Harshil.
He believes that the online payments market have grown by close to 50 percent. Also with the number of different players entering the market and newer startups coming it to the space, Harshil adds that there will be need for better and newer payment solutions.
Razorpay competes with the likes of PayU and Citrus Pay, while there also is Instamojo, which focuses on individual payments. There also is Juspay, a mobile payments startup that secured Rs 40 crore in series-A round of funding from Accel Partners.
Fintech seems to be the buzzword today. This space saw a funding of $950 million across 70 deals last year and this year it has already raised $200 million across 30 deals. Apart from the same, with RBI’s proactive guidelines and regulations, the space is further seeing disruption and growth.
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