Financial services as we know them have come a long way. And, banks are a prominent part of our day-to-day lives. Although banking systems have drastically changed over the years, one aspect of banking remains the same – the borrowing relationship.

Borrowing relationships with banks are built over time. Traditional banks have many customers. And, maintaining relationships with each one becomes hard. Banks find it difficult to get loan repayments even though there are credit score validation and guarantor requirements. 

These methods have turned out to be a double-edged sword. The reason is, they don’t cater to the needs of small business owners who need loans but don’t pass the eligibility criteria. 

The only way a traditional bank can gain the borrower’s trust is through a customer experience-driven model. This is where neobanks overtake traditional banking systems.

Trouble in paradise: Why traditional banking ecosystem is dented

The traditional banking models are significantly behind, considering the evolving needs of businesses. And this has created somewhat of a gap in the overall experience for businesses that have to borrow from banks.

Lately, providing working capital to businesses has been much easier than before. The Ministry of Small and Medium Enterprises, the RBI, and other government bodies have supported and endorsed financing for businesses. 

But banks need more than that. They need collaterals to vet these businesses, which at that point in time, businesses simply can’t afford. Loans also take prolonged periods to get approved. The fate of a business can depend on loan approval time, too. 

This ends up creating a lot of unnecessary anxiety for borrowing businesses. This is exactly when they turn towards other lenders that provide instant working capital.

Neobanking to the rescue

Cost-effective, convenient, customer driven – the three things that help build better relationships with borrowers. 

Fintech startups all over the world, especially in banking and financial services have over 15 million consumers, out of which, over 50% of the consumers are acquired by neobanks

The incredible growth opportunity for neobanking platforms is sprouted by their low-cost business model, which has resulted in high adoption by small and medium-sized enterprises, as well as businesses with variable incomes and earnings, and businesses that embrace innovative tech. 

When compared to traditional banks where banking hours and procedures are followed meticulously, neobanks are welcoming of their customer’s flexibility. 

How Razorpay is disrupting business banking

We at RazorpayX, understand where the gap lies. And, we’re bridging this gap through our business banking platform. 

If you are a business, you can sign up on RazorpayX and get an active account in minutes. From payouts to processing payroll and vendor payments, you can perform all the functions that you would at a traditional bank, but faster. 

Fund transfers, loan applications, bank statements are all just a click away.

Razorpay also follows the same philosophy with lending.

Traditional banks offer loans and credit options, but only to a select few – who are backed by corporates or have assets. 

Razorpay on the other hand offers faster access to loans. It leverages advanced AI-based risk assessment tools that approve loans based on your cash inflow, instead of a high credit score or guarantee.

The added insight of payments and business banking helps us make better products that suit your business needs.

Working Capital Loans

Razorpay offers loans for your business without collateral, at competitive rates. You don’t have to wait long periods of time for your loan to get approved. Since the whole loan application process is online, the turnaround time is very short. 

Loan repayments are very flexible too! You can choose to pay in installments on a daily, weekly, or monthly basis.  

Cash Advance

Razorpay Cash Advance offers your business the convenience of an unsecured line of credit to manage cash requirements prior to your customer payments. You can withdraw cash up to your credit limit, repay when customers pay and borrow again when you need more funds.

Razorpay’s Alternative Credit Decisioning System pre-approves you based on your past customer transactions. And, you end up paying interest only on the amount for the duration of the withdrawal. Next, you can simply repay automatically through settlements.

Corporate Credit Cards

You can avail an instantly approved card that offers superior expense management. RazorpayX offers immense flexibility with limited-term credit periods. 

You can use the universally accepted card to make payments towards Google Ads, AWS, Facebook Ads, and so much more. 

It’s equipped with dynamic credit limits, auto-repayment features, and a whole array of curated benefits! 

Business banking + lending

Razorpay’s credit products are driven by what borrowers want, and not by what is most profitable. The time needed to introduce new credit instruments is not too high. For example, we worked on Cash Advance recently as a response to lockdown for minor but important cash requirements for businesses. 

In addition to solving conventional and structural challenges of lending, we are also solving challenges that are a result of partial digitization of banking institutions. 

For example, our most used capital product, Early Settlements, is a product that solves an important time gap. It helps you reduce your settlement period from T+2 days to a few minutes (from the time of transaction), so that you don’t have to face cashflow challenges, especially during the current times.

And, RazorpayX, the business banking platform helps you with your disbursals, vendor and contractor payments, and so much more! 

You can

  • Manage your contacts and end-to-end payout operations via powerful APIs
  • Make 24*7 payouts, disbursals, and refunds through UPI, NEFT, RTGS, and IMPS
  • View financial summaries of all your transactions and drill down views of transactions at a contact level
  • Instantly access and download financial reports and summaries of their contacts
  • Get complete control and visibility of your finances with real-time summaries, without any help from financial analysts
  • Automate and execute payroll, compliance, and contractor payments with a dual tax regime compliant payroll software

Get working capital instantly for your business growth and automate your business banking with Razorpay!

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Harshitha Rao
Author

Harshitha is a content marketer at the future-forward RazorpayX. She has an insatiable love for travel and culture, rock music, and the work of Neil Gaiman.

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