wordpress blog stats
Connect with us

Hi, what are you looking for?

Razorpay will have revenue sharing deals with banks for UPI payments

payments flickr

Payment gateway aggregator Razorpay has tied up with ICICI Bank, YES Bank and HDFC Bank for payments over the Unified Payments Interface (UPI). With this, all merchants on Razorpay will be able to have UPI as an option in addition to credit and debit cards, net banking and wallets.

It is curious to see Razorpay tying up with multiple banks as CEO Harshil Mathur had told MediaNama that the UPI would eliminate the need for payment gateways to tie up with multiple banks. “When it becomes more mature, instead of having to build 57 bank relationships a gateway has to build right now, it needs to build only one relationship with the UPI. So it will ease our efforts and help out the merchant,” he explained.

Mathur added that the company has tied up with multiple banks as the implementation of the UPI is still in its early stages and that Razorpay would see which bank performs well and have a single relationship with them in the future.

The company says that it is the first payment gateway to integrate the UPI and that it does not require the addition of code to start offering UPI payment options to their customers.

It’s interesting to note that banks are allowed to charge merchants a different fee than P2P payments and right now it is capped at the merchant discount rate (MDR) for debit card transactions. Merchants have to pay 0.75% for transactions less than Rs 2,000 to the banks and 1% for transactions above Rs 2,000.

Advertisement. Scroll to continue reading.

As such, banks will look at typing up with payment gateway aggregators to get access to smaller merchants. Mathur also added that there is a revenue sharing agreement with banks for getting access to smaller merchants through RazorPay. He said that banks share about 20 basis points per transaction happening on the UPI.

Also worth noting, Dilip Asbe, COO of the NPCI, had said that it is more concerned with person-to-merchant (P2M) payments via the UPI to drive usage. “P2P transactions are not that frequent from a consumer standpoint. It happens once or twice in a month,” he added.

Currently , the company has more than 10,000 merchants which includes Videocon, Nykaa, Zerodha, NestAway, Udacity and Chai Point.

The UPI went live with 21 banks this month. UPI is a payments architecture that will allow users to make a transaction without divulging their account details via aliases (such as shashidhar@hdfcbank) and make pull-based payments. The payments architecture was built upon the IMPS mobile payments system which let customers to transfer money across different banks with the use of a single identification and password.

Other UPI developments

– Earlier this month,  YES Bank partnered with 50 companies to build an ecosystem for the UPI. For starters, it has already announced its partnership with Flipkart’s PhonePe. Others in the fold include Capital Float (lending), Ezetap, Benow (merchant aggregators), MyPoolin, Splitkart, Paysay (bill splitting) and Instafeez (fee collections).

Advertisement. Scroll to continue reading.

– In July, Axis Bank and mobile wallet FreeCharge partnered to allow its users to make payments through the UPI. Through this, FreeCharge users will be allowed to load money into their wallets through the UPI option which will be powered by Axis Bank’s SDK.

Image credit: Flickr user Jason Saul under under CC BY 2.0

Written By

MediaNama’s mission is to help build a digital ecosystem which is open, fair, global and competitive.



Find out how people’s health data is understood to have value and who can benefit from that value.


The US and other countries' retreat from a laissez-faire approach to regulating markets presents India with a rare opportunity.


When news that Walmart would soon accept cryptocurrency turned out to be fake, it also became a teachable moment.


The DSCI's guidelines are patient-centric and act as a data privacy roadmap for healthcare service providers.


In this excerpt from the book, the authors focus on personal data and autocracies. One in particular – Russia.  Autocracies always prioritize information control...

You May Also Like


Google has released a Google Travel Trends Report which states that branded budget hotel search queries grew 179% year over year (YOY) in India, in...


135 job openings in over 60 companies are listed at our free Digital and Mobile Job Board: If you’re looking for a job, or...


Rajesh Kumar* doesn’t have many enemies in life. But, Uber, for which he drives a cab everyday, is starting to look like one, he...


By Aroon Deep and Aditya Chunduru You’re reading it here first: Twitter has complied with government requests to censor 52 tweets that mostly criticised...

MediaNama is the premier source of information and analysis on Technology Policy in India. More about MediaNama, and contact information, here.

© 2008-2021 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ

Subscribe to our daily newsletter
Your email address:*
Please enter all required fields Click to hide
Correct invalid entries Click to hide

© 2008-2021 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ