News Update

Razorpay Launches Instant Refunds on UPI Transactions

• ByStartupStory     |    January 23, 2024

On January 22, 2024, Razorpay, a frontrunner in UPI innovations since 2017, announced the launch of Instant Refunds on UPI transactions by Razorpay POS. This industry-first solution aims to provide a seamless in-store payment experience by enabling merchants to offer instant refunds for failed UPI transactions within two minutes, streamlining the checkout process.

UPI payments have become the standard for digital payments in India, with transactions surpassing 100 billion in 2023, a 60% increase from the previous year’s 74 billion, according to the National Payments Corporation of India (NPCI). With over 300 million users, the rapid adoption of UPI reflects its popularity among consumers. However, businesses face challenges with delayed POS transactions, leading to negative customer experiences and potential losses.

A 2023 survey by NeoGrowth revealed that 53% of MSME retailers identified internet issues and failed transactions as major obstacles to UPI adoption. To address this, Razorpay leveraged advanced technology to introduce instant refunds on UPI payments through Razorpay POS. The process, which takes a maximum of two minutes, involves swift attempts within three seconds, with up to three retries if needed, eliminating the need for manual intervention.

Byas Nambisan, CEO of Razorpay POS, emphasized the importance of providing omnichannel payment experiences and the impact of failed transactions on businesses. He stated that 5-15% of UPI transactions face friction due to pending status, leading to lost business opportunities. The Instant Refunds feature aims to enhance customer satisfaction, trust, and checkout speed.

Razorpay POS has seen significant growth, contributing nearly 10% to Razorpay’s overall revenue in FY’23, reflecting its impact on in-store payments. The platform’s expansion aligns with the evolving business environment, emphasizing the importance of a hybrid approach for customer engagement.

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