One of the measures of innovation – whether technology or process-driven – and its impact is the way it changes the way an organization does business. Some time back, we wrote to tell you about Razorpay 2.0; a suite of products that make Razorpay more than your average payment gateway. Then we decided to do a case study to see how our products have helped our users affect significant changes in their day-to-day operations and how they accept online payments.
We bet on Razorpay 2.0 because we believed that online payments can not just transform e-commerce but also help businesses in how they operate and help optimize their customer experience. While we always understood payments as a service; we now also have intimate knowledge of added B2B/B2C verticals and how a seemingly simple digital transaction can affect intangible things like the inherent trust between a client and a business. So, as we gear up for the remaining half of 2018, let me share with you the learnings we have gleaned from our customers, and how it has helped us become even better at what we do.
#1: Ease-of-transaction and word-of-mouth go hand-in-hand
In the digital world, all is not five-star ratings and online reviews. Reports suggest that as much as 13% of all online sales come via word-of-mouth channels; like influencer marketing. But, for a B2C company which operates in both the online and offline space, the number could be much higher.
This insight comes from a case study with FreshToHome – a food-delivery startup which uses Razorpay Payment Gateway for online transactions. We know that 2014-15 was the year of food startups in India; with investment dipping low in 2016 due to global events. In 2017-18, this sector has seen a huge jump again with investment worth $370 million.
Currently, there are over 900 food startups in India, and word-of-mouth and the water-cooler chat are fast becoming important sources of revenue.
What role do payments play in this scenario? Well, if your payments game is not up to the mark and you cannot capture orders as soon as they come in, all you have left is a hungry customer with a bad review. And foodies, mind you, take such process gaps seriously. In the services industry – of which food startups are a part – WOM (word of mouth) is a key driver. This is because services are experiential in nature, and cannot be assessed before purchase. And an undercooked payments process is sure to leave a bad taste in your customer’s mouth!
#2: Customised payment solutions can help businesses save up to 20% in cost and time
This report by Fujitsu dives deep into the causes for time and money loss in the B2B sector, and the findings are very interesting. According to the study which took place in the UK, 65% of SMEs lose time and money because of low adoption of new technology. Another key factor for time loss is the administration tasks (up to 10 hours a week) which take time away from growth and revenue-increasing activities. The report then goes on to suggest that by utilising just two hours of each week properly, SMEs could help boost the UK economy by almost £9bn annually. This holds true in the Indian context, too.
In the B2B sector, slow adoption of technology – especially tech that is related to payments – can lead to slow revenue growth. A customised solution then, like the Razorpay Route, is the best way to effectively manage payments and increase productivity.
Let me give you a case study here. Bangalore-based Goalwise is an intelligent, online mutual fund investing platform that helps over 14000+ users across 42 countries to achieve their short and long-term financial goals. They faced the challenge of ensuring real-time settlement to the AMCs (Asset Management Companies) to ensure that investors get the fund for the price at the time of the purchase and not for the price at the time of settlement. Since units are allotted only when the money is settled to the AMC, the need for real-time settlements is a real bottleneck that legacy payment service providers do not solve.
However, with the Razorpay Route software, Goalwise can offer a settlement time of T+2 hours to its AMC partners, which is a big boon! Other features like ‘Settlement on Hold’ and API-driven reconciliation have helped the company reduce costs by 20%.
#3: Tailor-made payment solutions are the key to more subscription services
In just two years since its launch, Amazon Prime has over 10 million customers in India, making it the biggest subscription service in the country. Yes, we do not have a Dollar Shave Club yet but those, too, are not far off. And a robust online payments solution is going to be very important in boosting the growth of this sector.
A good example here comes from a case study we did with Rentomojo, the online furniture rental service. The company has been offering rental subscriptions for a while now, and over 40% of its user base has an ongoing subscription of 2 years or more. Asking these customers to log in to their dashboard every month and pay the subscription amount makes for bad user experience and affects retention. Our case study shows that when customers forget to make payments, the late fees added to the amount also raises concerns.
Accepting recurring online payments from their customers without much friction has become a way of retaining customers for Rentomojo, thereby reducing the hassle of month-on-month payment.
An automated subscription tool like the Razorpay Subscriptions, which works with both the e-NACH mandate and credit/debit cards, is the solution that subscription providers need. Razorpay Subscriptions not only helps users with a better, automated payment plan, but it also allows businesses to predict revenue growth and proactively handle issues like card failures etc.
#4: Customised payment solutions are the future of the online payments business
There is a lot that online payments solution providers and the B2B industry can do to make digital payments easier for all customers. Seeing the traction for the Razopray 2.0 product suite reinforces my view that digital transactions are here to stay; provided businesses can make the process seamless and create trust. Faulty captures, transaction failures, refunds – these are all bottlenecks that technology can solve.
Talking to our customers to understand their online payments-related issues and creating a case study has been an integral part of our journey, and we have put all this data up on our Customer Stories page. Because it’s too good not to share! If your business is looking for a payments solution, or if you are a start-up waiting to accept online payments, these case studies will definitely come in handy.
For everything else, we at Razorpay are just a call away!