Razorpay launches export account for SME merchants to receive international payments

Razorpay provides features like tracking and visibility insights for merchants.

Business-to-Business (B2B) fintech unicorn Razorpay on July 26 launched its MoneySaver Export Account to help Indian exporters open bank accounts in the US, the UK, Canada, and Australia and receive payments locally via bank transfers on the fintech's platform.

“The main reason behind this offering is to address the question of how to democratise payments in India and across the globe…This is specially designed for small businesses and will help them receive their international payments with ease,” said Rahul Kothari, Chief Business Officer (CBO) of Razorpay in an interaction with Moneycontrol. While the offering is available in four countries as of now, it will eventually be expanded to other countries, Kothari said.

How does it work?

Razorpay’s existing clients can open a MoneySaver Export Account in the international banks suggested by the firm.

Customers of those clients abroad will be able to make payments or write cheques to the local bank where the MoneySaver Export Account is set up.

Razorpay will then transfer the payments to the merchants and provide tracking and visibility insights through its platform.

Existing challenges

Exporters typically use international bank transfers, accounting for more than 50 percent of their cross-border payments.

“Currently, India’s annual exports account for $750 billion. Even if 10 percent of the overall payments happen via bank transfers, the SWIFT (Society for Worldwide Interbank Financial Telecommunications) charges alone can accumulate to a staggering $5 billion,” Kothari said.

The MoneySaver account is OPGSP (Online Payment Gateway Service Provider) compliant solution and ensures that each payment on the Razorpay platform is backed with a single-click electronic Foreign Inward Remittance Statement, readily available on the Razorpay dashboard, the firm said in a media statement.

As per the OPGSP guidelines, fintechs can facilitate transactions only to the extent of $10,000 of transaction value and Razorpay will also be helping exporters within that transaction value.

“International money transfers are quite costly; as per the RBI’s report, for every $200 of the transaction, there is a fee of about $13 of SWIFT transfer charges…Now with Razorpay’s offering, a merchant’s customer can just deposit in the bank account in the local geography itself, cutting these charges,” Kothari said.

The platform also provides features like tracking and visibility insights for merchants.

Some of the other challenges being faced by exporters presently are high transfer costs, lack of transparency in charges, fraudulent chargebacks, transaction failures and the need to set up bank accounts in every geography they want to expand in.

Razorpay’s bet on cross-border payments 

Revenues from International Payments division at Razorpay contribute about 20 percent of its overall payments revenue and the firm expects to cover over 1-2 lakh businesses by the end of 2025. As of FY22, Razorpay’s India entity’s net profit increased 19 percent to Rs 7.37 crore. Its standalone revenue grew to Rs 1,485.6 crore in FY22, from Rs 844.6 crore in the previous fiscal year.

“The present offerings are purely from the target addressable market…I also see a lot of requirements for this in the offline space as well. Overall the applicability in the offline space will also be big. The cross-border payments will contribute more than 20 percent to Razorpay’s overall revenues in the next couple of years,” Kothari noted.