Razorpay Business Model Explained: How the Fintech Giant Makes Money in India

2. RazorpayX: Business Banking Services

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.

3. Razorpay Capital: Lending & Credit

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.

4. Recurring Payments & Subscription Billing

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.

5. Payment Links & Razorpay Store for Small Merchants

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 India’s growing SMB and creator economy.

Other Revenue Streams

Partner Commissions

Razorpay earns referral fees from third-party integrations (like logistics, ERPs, accounting software) that are embedded in its platform.

Add-on Tools

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.

Challenges Razorpay Faces

Insight: Razorpay needs to continuously innovate and upsell high-margin services like lending and banking.

Key Strengths That Power Razorpay’s Growth

• 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 India’s fastest-growing payment channel

Razorpay vs. Competitors: Quick Comparison

Note: Razorpay's edge lies in being a full-stack solution, not just a payments tool.

Final Takeaways: Why Razorpay’s Business Model Works

• 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, Razorpay’s model offers a roadmap for building sticky, scalable, and profitable B2B platforms in India’s digital economy.