In April last year, four months after the central banker had imposed restrictions on payments platform Razorpay from onboarding new customers pending approval of their PA license, the company formed a compliance advisory committee, consisting of former ED of RBI G. Padmanabhan, and three others Arijit Basu former MD, SBI, and retired bureaucrats Aruna Sundararajan and K.P. Krishnan, to beef up their corporate governance and risk & compliance.

With this group advising Razorpay’s board on navigating the regulatory framework, now compliance is at the core of product building and not an afterthought, says Harshil Mathur, CEO and co-founder. During the restricted period, nearly 600 people in the new accounts onboarding team of the company were repurposed to other verticals. While adopting a transparent communication approach with existing clients also helped, the company was also in touch with many new logos that were waiting for the restrictions to be removed to be onboarded.

“So, we called on every single sign-up of last one year that we couldn’t sign up and asked if they wanted to come back. 80% of the customers that couldn't go live with last year came back to Razorpay and started using us,” Harshil adds. Despite the challenges, by the end of March 2024, Razorpay’s India business revenues crossed ₹2,500 crore, a jump of nearly 24% compared to the previous fiscal year, with profits of 33.5 crores. “Payments is a very sticky business, right? So, all the customers who have been live with us for the last 10 years continued to grow, given that the digital payments industry is growing, and also the offline to online shift,” says Shashank Kumar, MD and co-founder.

That being the past, according to the company, in the first six months of this fiscal year, payments business revenue has seen a 40% jump, with tailwind from the travel segment, with large airlines like Indigo, Akasa and Air India Express coming on board, along with the D2C and quick commerce segments. With nearly 70% of the group’s revenue coming from the payments business, “While this year has been an exceptional year, over the next 3-4 years, we expect a 40 to 50% year over year growth on an average in the PA business given that depth we have seen in this business in the last two years,” Harshil says. 

Apart from payments, the company is also very bullish on its other verticals, RazorpayX 'full-stack business solution', international business, as well as the Point of Sale (PoS) offline business. While small and medium-size companies form a substantial part of the customer base, the revenue skew between large customers and MSME/startups is 50-50. Razorpay which forayed internationally with the acquisition of Curlec in Malaysia (2022), is also the fastest growing segment within the group according to the company, much to its surprise.

While the first set of customers were Indian business with operations in the country, now the base has expanded to other Malaysian businesses. The company expects to be among the top 5 fintech players in Malaysia by the end of next year. “We are looking at launching in Singapore very soon and other south Asian markets. We are waiting for licences in some of these markets,” Harshil adds. With many countries now working towards launching of native versions of India’s UPI, Razorpay sees itself well-positioned to plug and play in such markets. 

The company has done nearly 8 acquisitions in the past 10 years in 2022, including TERA Finlabs, Opfin, Thirdwatch along with PoshVine (rewards and loyalty program) and Ezetap (an offline POS company). “For us, acquisitions have always been very opportunistic in nature, we rarely look at just the capabilities but also the product and the culture that they have” says Shashank. With SaaS still being the broader theme for future acquisitions, smaller companies with leaner teams that can fast-track licences and other requirements in markets other than India are also on its radar.