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Razorpay Instant Refunds

When you make a refund request to Razorpay, the information is conveyed to the banking partners. The refund request is accepted, filed and then processed. On completion of this process, refunds are reflected in the customer's account or card balance, typically within 5-7 days.

Using Razorpay's Instant Refunds feature, you can now ensure refunds are delivered instantaneously to the customer account. This not only increases customer retention but also paves way for improved reliability and trust of your customers when they are refunded as soon as possible.

You can initiate instant refunds either via APIs or from the Dashboard.

Here is the list of supported payment methods that enable to you issue instant refunds to your customers.

Refund Time#

The amount of time taken to process the refunds depends on the payment method used to make the transaction. For all credit card transactions, the time taken depends on the amount to be refunded:

Refund Amount

Time Taken for refund

Upto 2 lakh rupees

Credited immediately to the customer's account.

More than 2 lakh rupees

Credited within two hours during business hours.
For refunds raised beyond working hours, it can take up to 1 business day for the refund to reflect in the customer's account.

Instant Refund Transaction Fee#

For processing instant refunds, a small transaction fee will be levied by Razorpay. Fees will be deducted directly from your account balance, which shall be reflected on the Dashboard. In case the instant refund fails and the refund takes 5-7 working days, the levied fee is credited to your balance. The fee break-up will also reflect in the end-of-the-month Invoice generated by Razorpay. All the details are available in the Instant Refunds report downloadable from Razorpay Dashboard. For more details about the transaction fee, contact our Support team.

Handling Chargebacks for Instant Refunds#

For prevention of chargebacks, Razorpay only does 'source refunds'. It means that money is refunded to the payment method that the customer used to make the payment. For example, if a credit card was used to make the payment, the refund will be pushed to the same credit card. Similarly, in case of UPI payments, the refund is pushed to the VPA used while making the payment.

If a chargeback is received for an instantly refunded payment, the processed refund will have a UTR (Unique Transfer Reference) in the callback. This UTR will be reflected in the ARN (Application Reference Number) field of the Refund entity and serves as a proof of refund completed between you and Razorpay. Additionally, Razorpay passes the RRN (Razorpay Reference Number) of the payment in the Fund Transfer Request sent for the Refund. This ties the instant refund back to the parent payment, thereby serving as a proof of the refund. This data can also be used as a defense against a future Chargeback or Arbitration case.