API ReferenceIntegrationsKnowledge Base

Balances

There are two types of balances available to you:

Current Balance#

All money received from your customers, after deduction of fees and tax, is added to your Merchant Balance or Current Balance. This accumulated amount is settled to your bank account according to your settlement cycle. This balance is also used to process refunds to your customer, settlements to your linked accounts and chargebacks. It is important you maintain a sufficient current balance. You can add funds to your current balance account from your Dashboard to ensure you have a sufficient current balance for your business needs.

While we do not charge any fee to process refunds, the fees and tax charged to process the transaction are not refunded to you when you process a refund. This amount is deducted from your current balance when you process your refund.

Add Funds to your Current Balance#

To add funds to your current balance:

  1. Log into Dashboard.
  2. Navigate to My accountBalances.
  3. Click Add Funds in the Current Balance section and follow the on-screen instructions.

Note:
When you add funds to your current balance, fees and tax are deducted and the remaining amount is added to your current balance. The fees and tax charged is the same as what is charged on payments received from customers.

For example, according to your pricing plan for a ₹1,000 payment, the fees and tax is ₹5. When you add ₹1,000 to your current balance, ₹5 (fees and tax) is deducted from it and ₹995 is added to your current balance.

The short animation below shows you how to add funds to your current balance in Test Mode.

Example 1#

Lets say you have a current balance of ₹1,000.

Current Balance

Opening balance

₹1,000

You receive and capture a payment of ₹1,000.

Let's say a fee of ₹5 was charged by us to process this transaction.

₹1995

(₹1,000 + (₹1,000 - ₹5))

You process a full refund of ₹1,000 for the above payment.

₹995

(₹1995 - ₹1,000)

Example 2#

Lets say you have a current balance of ₹0.

Current Balance

Opening balance

₹0

You receive and capture a payment of ₹1,000.

Let's say a fee of ₹5 was charged by us to process this transaction.

₹995

(₹0 + (₹1,000 - ₹5))

You try process a full refund of ₹1,000 for the above payment.

The refund fails since you do not have sufficient current balance.

Reserve Balance#

Reserve Balance allows you to process refunds or settlements to linked accounts even if you do not have a sufficient current balance. The amount you add as the reserved balance becomes the maximum negative limit for your account. Razorpay does not deduct funds from your reserved balance, rather uses the reserved amount as a negative limit for your account balance.

For example, if you add ₹1000 in your reserved balance, the negative limit of your account balance is automatically set at -1000. This means, in case you do not have sufficient current balance, Razorpay will not fail your transactions till this limit is breached.

You can add funds to your reserved account from the Dashboard to increase your negative balance limit. In most cases, you will have to transfer funds to your reserved balance only once.

Add Funds to your Current Balance#

To add funds to your current balance:

  1. Login into Dashboard.
  2. Navigate to My accountBalances.
  3. Click the Activate and click Submit. You will receive an email from us with the details of the account to which you have to transfer funds.
  4. Make a NEFT transfer to this account details you receive in the email.

The transferred funds will reflect in your reserved balance within 4-6 hours. Now, your total negative balance limit is equal to the reserve balance.

The short animation below shows you how to add funds to your current balance in Test Mode.

Example#

Lets say you have a current balance of ₹0 and reserve balance of ₹1,000

Without Reserve Balance

With Reserve Balance

Opening Balance

Current Balance → ₹0
Reserve Balance → ₹0

Current Balance → ₹0
Reserve Balance → ₹1,000

You receive and capture a payment of ₹1000.

Let's say a fee of ₹5 was charged by us to process this transaction.

Current Balance → ₹995
Reserve Balance → ₹0

Current Balance → ₹995
Reserve Balance → ₹1,000

You process a full refund of ₹1000 for the above payment.

The refund fails since you do not have sufficient current balance.

The refund is successfully processed.

Current Balance → negative ₹5
Reserve Balance → ₹1,000