Razorpay is one of India's fastest-growing fintech platforms, helping businesses big and small accept and manage payments online. Beyond just a payment gateway, Razorpay has built an ecosystem of financial services that drives growth and revenue. This blog examines how Razorpay makes money, why the business model works so well, and why it's the platform of choice for startups and large companies alike.
Quick Snapshot: What Razorpay Does
Service Area | What It Offers |
Payments | Gateway, payment links, recurring billing, international payments |
Banking | RazorpayX for payroll, expense management, vendor payments, and credit cards |
Lending | Razorpay Capital for working capital loans |
E-Commerce | Razorpay Store to create online storefronts with integrated payments |
Founded in 2014 by Harshil Mathur and Shashank Kumar, Razorpay has grown into a full-stack B2B fintech platform trusted by 10Mn+ businesses, including Swiggy, Zomato, and BookMyShow.
Razorpay follows a B2B (business-to-business) model, offering digital payment and financial tools to merchants, startups, and enterprises. Their revenue engine runs on five main pillars: Every time a business receives a payment through Razorpays platform, Razorpay charges a small fee on the transaction. This varies depending on the payment method: UPI: ~0% to 1% Debit Cards: ~0.4% to 0.9% Credit Cards: ~1.75% to 3% Wallets / Net Banking: ~1.5% to 2% Reason it works: With billions of transactions taking place every month, any kind of fee generates a lot of revenue. Razorpay also has bulk pricing for large enterprises, which secures loyalty and volume. Key takeaway: Transaction-based fees are Razorpays primary and most consistent revenue stream. RazorpayX is their neobanking arm. It helps businesses handle banking tasks without relying on traditional banks. Services include: Automated payroll for employees and freelancers Corporate credit cards for teams Vendor and tax payments Expense management tools How it earns: Razorpay charges subscription fees, service charges on payouts, and earns commissions on partner banking products. Value addition: Saves finance teams time while giving Razorpay a recurring revenue stream. Razorpay uses its access to business transaction data to offer short-term working capital loans to merchants. Loans are typically disbursed quickly with minimal paperwork. Offered based on real-time payment performance and transaction history. Partners with NBFCs and banks to underwrite risk. Revenue comes from: Interest on loans Loan processing fees Commission from lending partners Why it scales: Lending builds stickiness and creates another income layer beyond payments. Razorpay Subscription is a tool for businesses offering: SaaS services Digital subscriptions Online coaching Gym/fitness memberships It automates: Recurring billing Invoicing Payment retries and failure handling Business model: Charges a fee per successful recurring transaction or monthly usage fee. Use case: Ideal for startups and platforms with predictable revenue streams. Payment Links: Freelancers and small business owners can send links via WhatsApp, SMS, or email to collect payments instantly. Razorpay Store: Lets businesses set up a simple online store with no developer help. Earning model: Charges a flat fee per transaction processed + optional monthly fee for premium store features. Smart move: Helps Razorpay tap into Indias growing SMB and creator economy. Razorpay earns referral fees from third-party integrations (like logistics, ERPs, accounting software) that are embedded in its platform. Razorpay also monetizes features like: GST-compliant invoicing Automated TDS payments Real-time analytics dashboards These may be bundled with paid plans or offered as add-ons. Challenge Description High Competition Faces pressure from Paytm, CCAvenue, PhonePe, and global players like Stripe Thin Margins Payments have low margins, making scale critical for profits Regulatory Risks RBI compliance, data security laws, and fintech regulations can impact operations Insight: Razorpay needs to continuously innovate and upsell high-margin services like lending and banking. Integrated Ecosystem: One dashboard for payments, banking, and credit Trust & Brand Recall: Trusted by top Indian startups Strong Developer Support: Easy APIs and plug-ins speed up adoption UPI Adoption: Taps into Indias fastest-growing payment channel Feature Razorpay Paytm for Business Instamojo Stripe India Payment Gateway Yes Yes Yes Yes Neobank Tools RazorpayX No No No Lending Razorpay Capital Limited Limited Yes Subscription Billing Yes No Yes Yes Store Builder Yes Yes Yes No Note: Razorpay's edge lies in being a full-stack solution, not just a payments tool. Multiple Revenue Streams: Not reliant solely on transaction fees Deep Market Knowledge: Addressing pain points for Indian SMEs and Startups Scalable Infrastructure: Serving everyone from freelancers to unicorns Data Advantage: Leveraging payment data to fuel lending and banking decision-making If you're a business owner or fintech enthusiast, Razorpays model offers a roadmap for building sticky, scalable, and profitable B2B platforms in Indias digital economy.Core Business Model: B2B Fintech Platform
1. Transaction Fees from Payment Gateway
2. RazorpayX: Business Banking Services
3. Razorpay Capital: Lending & Credit
4. Recurring Payments & Subscription Billing
5. Payment Links & Razorpay Store for Small Merchants
Other Revenue Streams
Partner Commissions
Add-on Tools
Challenges Razorpay Faces
Key Strengths That Power Razorpays Growth
Razorpay vs. Competitors: Quick Comparison
Final Takeaways: Why Razorpays Business Model Works
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