Razorpay: Sequoia-backed fintech Startup to integrate with ONDC

Razorpay is the second large fintech startup that has joined the ONDC this month, after Walmart-owned PhonePe went live on the open network in April. Noida-based Paytm was among the first few companies that went live on the ONDC.

Razorpay, a Bengaluru-based fintech platform mainly catering to businesses, has announced its integration with the government’s Open Network for Digital Commerce (ONDC) project. ONDC aims to connect buyers, sellers, service providers, and facilitate seamless transactions across channels, creating a national digital commerce infrastructure.

Razorpay, backed by investors like Sequoia and Tiger Global, plans to launch a payment reconciliation service for several network participants, including buyers, sellers, and logistic providers.

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Razorpay, with over 10 million businesses on its platform, has gained a reputation for maintaining an audit trail. This trail helps settle disputes and discrepancies that may arise on the network, including small and medium enterprises.

But, What’s the take?

The managing director and co-founder of Razorpay, Shashank Kumar, believes that the payment reconciliation service will enhance the development of ONDC’s tech infrastructure. It is expected to help the ecosystem grow seamlessly from a payments and compliance perspective. The company aims to leverage its digital payments expertise to support the government’s unified digital commerce infrastructure vision.

The ONDC project is part of the government’s larger efforts to promote digital payments, boost financial inclusion, and provide a level playing field to small and medium businesses in the country.

The project aims to streamline transactions, increase transparency, and reduce costs across the supply chain by uniting stakeholders. Razorpay’s ONDC integration will provide reliable payment reconciliation to network participants, contributing to the larger goal.

Earlier this month, Razorpay became the second significant fintech platform to join the Open Network for Digital Commerce (ONDC).

PhonePe, which is owned by Walmart, had also integrated with the open network in the same month, albeit through a separate app named Pincode, specifically designed for ONDC. Paytm, a fintech company based in Noida, has also integrated with the ONDC.

Razorpay’s payment reconciliation service is anticipated to enhance ONDC’s tech infrastructure. It is expected to facilitate seamless growth of the ecosystem from a payments and compliance perspective.

Razorpay Business Details

Razorpay’s platform has over 10 million businesses, including small and medium enterprises. Its experience in maintaining an audit trail can help resolve network disputes or discrepancies.

Shashank Kumar, managing director and co-founder of Razorpay, expressed confidence in ONDC’s possibilities. He believes payment reconciliation service strengthens network’s tech infrastructure for smooth payment growth and compliance.

“This is a significant step towards our goal of enabling seamless and secure digital commerce for everyone. With this addition, we continue to drive transparency and inclusion in the digital commerce space…” said Thampy Koshy, CEO, ONDC.

This comes at a time when ONDC’s merchant base has risen to 85,000from around 800 in Decemberafter it launched an incentive scheme for seller-side apps to enroll merchants.

Of the total seller base, 31,000 are from non-mobility categories such as food, grocery, home decor, and electronics. Razorpay, established in 2014 by Kumar and Harshil Mathur, is backed by investors like Y Combinator, GIC, Sequoia Capital India, Ribbit Capital, Matrix Partners, MasterCard, and others. These investors have collectively invested over $740 million in the company. The company was last valued at over $7 billion.

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