Next time you cancel an air ticket or an e-commerce order, you can get a refund within a few minutes, instead of waiting for 5-7 business days, thanks to fintech firm Razorpay. The Bengaluru-based company has created a technology to make this possible at a time when at least 30 per cent of orders have to get refunded on an average in industries such as e-commerce, travel and foodtech due to various reasons, including the return of orders, cancellation of flights and issues related to quality. To help merchants improve the online payment experience for consumers, Razorpay, which is backed by investors such as Tiger Global and Sequoia, has unveiled a new product called ‘Instant Refunds’ for businesses. This new feature activates refunds and credits the customer’s source account across payment methods such as IMPS (Immediate Payment Service), credit card, net banking and UPI (Unified Payments Interface) within a minute of initiation.
“Our ‘Instant Refunds’ feature ensures that the refund is processed at a 3600x faster pace than the normal expected time of 5-7 business days. The team is focused on creating new technologies designed to make the entire payment lifecycle hassle-free,” said Shashank Kumar, chief technology officer and co-founder of Razorpay. “We believe this new feature will take the customer experience a notch higher, help brands create a competitive advantage, and even make them more profitable.” India is one of the fastest-growing online retail markets. About 71 per cent of internet users in the country purchase products online. Today, the company said, the refund process has two major pain points for both the end customer and the business. This includes a delay of 5-7 business days for the customer in receiving the money because of multiple intermediaries like the acquiring bank, issuing bank and the networks such as Visa, Mastercard and Rupay. There is also a lack of transparency during the entire refund process for both the customer and the business. This long cycle of processing refunds is a significant problem with every popular payment method in the industry. “This causes a lot of negative experience for the customers because they want the refund quickly. If it takes too long they get agitated, call the merchants, banks and the entire experience becomes bad,” said Harshil Mathur, CEO and co-founder of Razorpay. The firm has already tested the innovation for the food delivery firm Swiggy. “In Swiggy, if you place an order and you receive an incorrect (item) or some of it is missing, you can tap the refund (option) and get the money instantly and this is powered by Razorpay. Their customer satisfaction increased by 10 per cent just because of this one feature. We are now making this technology available to all our merchants,” said Mathur, whose firm has applied for a patent for the innovation. Razorpay is currently powering payments for over 8 lakh businesses and it plans to take the innovation to all of them including firms such as Indigo, BSE, Thomas Cook, Reliance, SpiceJet, Aditya Birla, Sony and Oyo. The company plans to increase its reach to over 14 lakh businesses this year. By issuing refunds instantly, Razorpay said it will help businesses retain their customers, build trust through an improved hassle-free payment experience and provide complete transparency on refunds to both the business and the end-user. This new feature will also reduce the dependence on manpower as every refund issue on an average leads to ten service emails or calls from customer support teams. “A solution like ‘Instant Refunds’ will not only help build consumer confidence in digital payments but also reduce losses for e-commerce companies where CoD (cash on delivery) has become an expensive option with more than 50 per cent online transactions made through cash,” said Kumar of Razorpay. Key Points: About 30% of orders have to get refunded in industries like e-commerce, travel and foodtech. Customers usually have to wait for 5-7 business days for the refund. Razorpay has developed a technology that ensures that the refund is processed within a few minutes. The firm has successfully tested the innovation for Swiggy. It is now taking it to over 8 lakh businesses that use its payment platform. Digital payments space in India is expected to rise fivefold to reach $1 trillion by 2023.
Source: Business Standard
