Scaling your business can involve a number of strategies that can work to the benefit of your company, but one of the most sustainable ways to do it is through diversifying the services you offer.
In a fireside chat on ‘Is diversity the name of the game in fintech now?’ a Tech Sparks 2022Razorpay CBO Raul Kothari He spoke about the company’s diverse portfolio of services and how it helped it grow into one of the leading digital payment platforms in the country.
Mapping the explosive growth of Razorpay
Rahul started as a payments platform eight years ago to help startups and small businesses with online payments. As its trading partners grew, Razorpay also understood their growing financial services needs. “We started by providing online payment services for businesses, but [merchants] don’t think about payments in isolation. They also think about managing their money better: they have to invest it, pay it out, pay their vendors, sometimes they have capital requirements, and they need to pay their employees. As we saw all these different requirements from businesses, we also grew our entire strategy from being a payments business to being a single-stack platform for end-to-end money movement for businesses,” Rahul explained.
The company then expanded into other financial services verticals such as payroll and credit options. By earning the trust of merchants through its core digital payments platform, Razorpay was able to onboard the same merchants for its other products as well. Rahul said, “Since we had a strong captive merchant base, we were able to have payment-adjacent products that could add value to their business. This is how our corporate cards and payroll products evolved, and now we have more than one hero product on our platform.”
Diversification is key
The need to diversify was more of a need than a want for Razorpay, especially in a country like India where the markets for tech products aren’t deep. Building adjacent products was a natural step in scaling Razorpay.
“While individual products can become multi-billion dollar businesses in developed economies, it is extremely important to create multiple products here in India where the markets are not that deep. We have to make them adjacent to each other and sell them in the right way to have more value for customers, to build strong businesses,” Rahul said, adding that Razorpay’s payroll and corporate credit card services were its fastest growing products. right now.
By expanding into other global markets, Razorpay was able to build a similar product stack for the Southeast Asia region by ensuring its product is localized for each geography, Rahul explained.
Rahul also added that diversifying and going omnichannel was the way forward for digital payment companies. “We are now reaching a convergence or tipping point where omnichannel (payments) will become a reality for several reasons: One, customer awareness when making a purchase decision is much higher and their behavior has changed significantly. For example, you may have rewards or discounts to use online, and you would also expect those rewards in offline stores. Second, UPI has played a big role in having a presence in the online and offline space,” he mentioned.