Businesses today are changing the way they do things to meet the evolving needs of consumers.

The consumer economy today wants products and services that are convenient, customisable and on-demand, and to incorporate these needs many traditional businesses are making the shift to what is called the subscription economy.

Subscriptions essentially removes large upfront charges made towards customers while allowing them the flexibility to choose as per their wants and needs, like the period and nature of subscription.

Giving this power back into the hands of customers, allowing them to experiment and choose from a wide variety of options is what is making the subscription model hugely popular.

Not only are subscriptions great for customers, it also allows businesses to obtain a steady flow of revenue, improving cash flows and liquidity without the need to worry about operational hurdles.

This unique benefit has made subscription models very attractive to all businesses today and more so for service based businesses. There are several subscription success stories around us today – from consumer services like Netflix and Spotify to enterprise solutions like AWS and Salesforce.

Online automation for subscription payments have been popular and prevalent in the west for a while now, however the same was not the case in India until recently.

Automated online payments were not allowed for subscription payments, meaning every time a subscription payment was due, customers had to make a manual payment either online or offline to ensure continuity in service/product delivery.

As a first step, just over a year back the RBI started allowing automatic payments for subscription models via credit cards with the clause of complying to the standard 2-factor authentication (that is required for all online payments) for the first subscription payment.

Subsequent payments for the billing cycle are carried on automatically, without any additional effort from the customer. And, moving forward, more online methods like E-mandate will be introduced specifically for handling subscriptions and UPI will also start supporting subscriptions.

At Razorpay we have made it a practice to make the best of new opportunities and we are proud to be the first fintech company in India to offer a completely customizable subscriptions platform that allows businesses to handle all aspects around subscriptions through a single solution.

Subscriptions can range anywhere from a simple standard customer subscription with equal payments spread across the subscription cycle to complex subscription use cases that involve on-demand add-ons in addition to standard subscription charges and per user models for large enterprises.

Razorpay’s subscription platform is built in such a way that a single platform caters to all types of subscription requirements.

Watch this video to see how our platform automates subscriptions:


The major subscription types we support are:

  • Fixed Payment Schedule: Customers are charged for the product or service for a fixed price for fixed period of time.
  • Per User Model: For companies that charge their customers based on seats or users availing the service such as Saas based enterprises
  • Usage Billing Model: Lets your customers pay only for what they have consumed over the billing cycle
  • On Demand Add-ons: For companies which allow customers to avail on demand services and pay for them in a single purchase along with the fixed recurring amount

Regardless of the subscription model, there are several minute details and components that need to work in tandem to deliver a seamless subscription experience.

From consumer driven requirements like changes in subscription duration, changes in payment mode etc to merchant requirements like the need for real time subscription data, trial options, handling of edge cases etc., a subscription solution has to incorporate several aspects in order to be successful.

Razorpay’s custom-built subscription solution is a great way to handle both side’s requirements effectively and automatically; bringing together the various aspects of successful subscriptions collection and management in a single platform.

Here’s how the solution handles both aspects in order to provide a smooth experience to both businesses (or merchants) and end-consumers:

a) Collection of subscription payments

Collection of subscriptions refers to the periodic collection of payments from customers, based on their subscription plan.

It is very important to remove the friction in the collection of subscription payments, hence authorization (using two factor authentication, as mandated by RBI) is taken from the customer at the start of the billing cycle and our subscriptions platform handles all subsequent charges without any involvement from the merchant or customer.

We also ensure that payments are collected under all scenarios including failed payments, delayed payments, card issues etc. without causing any revenue loss to the merchant.

b) Management of subscriptions

Successful subscription payments takes more than than just a slick, front-end payment interface for collecting payments. Several minute functional aspects with regards to subscriptions need to be handled effectively in order to ensure a smooth customer experience and steady stream of revenue, without any disruptions.

We have carefully built several value-added features to make subscriptions handling a breeze for merchants. Here are the features:

  • Trial and discounting options – Like any other business, subscription businesses also have to run special promotions like trial offers to attract customers. The idea for such customer incentives is to gain customer trust and convert such initiatives into revenue. With the Razorpay subscriptions platform, your business can easily offer such trial options to customers who then have the choice to automatically sign up for full-time subscription plans.
  • Add-ons – With the on-demand economy booming worldwide, even in subscription businesses there may arise a need that a customer wants to purchase products or services in addition to the subscription. Our platform supports all such requests, and merchants can easily add all add-on charges or other overhead expenses to existing subscription plans.
  • Upfront Charges – Upfront charges, like a one time fee can be collected from customers at the time of creating the subscription while all the remaining subscription payments can be collected as per the billing cycle. This feature is specially useful for businesses that require initial payments, like furniture rental that would require a security deposit.
  • Real-time reports and status tracking – Real time data is what keeps any business agile. Get real time data insights and reports straight from the dashboard about all subscription accounts at all stages of the subscription cycle in order to enable better decision making. You can also set up webhook integration for all subscription related activities such as creation, cancellation, payment status, or subscription expiry and get real time alerts. For instance, ‘subscription.activated’ will be fired when a subscription moves to an activated state.
  • Handling of edge cases – Due to the continuing nature of payments and services, subscription businesses can be exposed several edge cases like change of cards, declined cards, change of subscription plan etc. We ensure that all such edge-cases are automatically handled to render a seamless subscription experience. For instance, in the case of a failed transaction, the platform automatically re-attempts the transaction over the next 3 days to ensure that the billing continuity is not interrupted.

Over the past many months we have been consistently polishing up our subscriptions platform and have even rolled out the product to select merchants who have achieved significant efficiencies with the solution. So, if you’re offering subscription plans to your customers look no further, sign-up for Razorpay Subscriptions today and automate your recurring payments.


Shashank Mehta is the Director of Product Strategy at RazorpayX.

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