Cashfree is Dominating the Payment Solutions Landscape in India

In a Nutshell: Cashfree offers India the easiest, fastest way for online businesses to collect and disburse payments. Its products include a payment gateway, payout processing, marketplace settlements, and auto-collection via virtual bank accounts. Cashgram is Cashfree’s innovative weblink that allows users to provide account details and receive payments instantly from businesses. The company is leading the way in payments innovation with faster settlements, advanced fast-refund solutions and higher success rates on online transactions.

Payment processors use gateways to authorize direct payments across networks of online retailers, storefronts, credit cards, and individuals. The market for payment processing is robust in India.

That’s why it’s notable that Cashfree, an Indian payments and banking technology company, has rapidly grown in the country’s competitive environment to the point where it is now dominating payment disbursals with more than 90% market share among payment processors.

Cashfree was founded in 2015 as a payment gateway, giving it a three-year head start for digital disbursals and a large user base. The founders discovered it was difficult to use the existing online bank portals for everyday payment disbursals.

So in 2016, Cashfree launched the first gateway for bulk disbursals, known as Payouts. This coincided with India’s demonetization of its popular 500- and 1,000-rupee notes, a major event that helped digitize the country and reduce the percentage of cash-only transactions.

Cashfree Co-Founders, Akash Sinha and Reeju Datta.

Cashfree differentiates itself from other payment gateways in that it offers more than just payment collections. The company allows businesses to collect and bulk-disburse payments from a common platform. This made Cashfree an all-in-one payment solution for Indian businesses.

Cashfree is a Y Combinator alum, a product of the PayPal Startup Incubator, and was recognized as one of SutraHR’s Top 100 Startups to Watch for its strategic vision.

Not content to rest on its laurels, Cashfree is ambitiously eyeing the global market for payment solutions. “We see Cashfree becoming one of the largest payment solutions platforms for businesses in India, eventually helping Indian companies launch globally and global businesses operate in India with the help of seamless payments and banking solutions,” said Reeju Datta, Co-Founder of Cashfree.

Today, Cashfree serves more than 50,000 online businesses operating in India. While startups, internet companies, and financial services account for a majority of the payments processed by Cashfree, a significant number of micro-merchants and freelancers also use the platform.

Cashfree’s mission is unwavering: To enable online businesses to deploy payment solutions to innovate and scale.

“Since inception in 2015, we have launched 11 products, and six of them are industry-first fintech innovations for digital payments,” explained Datta. “Our business model and products are mature and can handle large volume transactions while being easy to integrate. This helps us offer a compelling proposition and stay ahead of the competition.”

Cashfree counts among its customer base Asian companies that include Xiaomi, Zomato, Cred, Club Factory, Drivezy, Furlenco, Google-backed Dunzo as well as donation platforms like Ketto and Milaap. It works closely with India’s leading banks, including ICICI Bank, HDFC Bank, Yes Bank, and Kotak Mahindra Bank to build the core payments and banking infrastructure that powers the company’s products.

Cashfree is also integrated with major platforms, including Shopify, PayPal, Amazon Pay, Ola Money, and Google Pay.

Among Cashfree’s innovative products and payment solutions are many first-of-their-kind and defining differentiators in the category. These include API-driven instant loan disbursal, instant refunds for orders paid by cash, and faster micro-payouts in the gaming segment, among others.

These products have helped Cashfree customers grow to a significant market share in a short time. In addition to businesses, Cashfree is also working with India’s leading banks to improve the country’s payments and banking infrastructure to respond to the surge in digital transactions in the nation.

Cashfree has compiled an enviable record of innovations, including:

• Payouts – The first gateway with a bulk disbursal solution for domestic and international payments. Payouts performs bank transfers to any unified payments interface, Paytm wallet, or debit card, with more than 100 payment options and support for 30+ foreign currencies. It can also verify accounts in real time.
• Instant Refunds – Launched on September 4, 2019, this was the first time instant refunds were available on the Cashfree payment gateway. You can initiate partial or full refunds from the dashboard or via an API. It seamlessly integrates with Shopify and Magento refund flows.
• Cashgram – COD orders providing instant refunds for the first time. Customers can send a Cashgram link to a user, who can specify a destination for payments or instant refunds.
• Pre-authorization – Provides the ability to block funds temporarily and debit the full or partial amount upon fulfillment. Customers can save payment gateway charges on canceled orders and integrate with their enterprise resource planning software. Users get real-time tracking of transaction progress.
• Subscriptions – Cashfree was one of the first gateways to offer recurring payments via the e-Mandate payment service initiated by the Reserve Bank of India and the National Payments Corporation of India.
• Instant Settlements – Cashfree delivered the industry-first and fastest instant bank settlements for payments collections (within 15 minutes).

Datta said he wants to see Cashfree expand and eventually go public. “In terms of volume, we want to grow at least 3x by crossing $30 billion during this year,” he said.

Cashfree recently announced that it is working on making refunds faster and frictionless with its suite of refund solutions for online transactions.

Despite a brief dip in the total number of transactions in India due to the lockdown of nonessential businesses during the Covid-19 pandemic, the number of refunds has risen by a whopping 20% in March and April 2020. A significant share of that has been from businesses operating in the travel and hospitality sectors.

“Cashfree has built a unique three-tier refund suite to help online businesses process refunds instantly,” said Datta. They are:

1. Cashgram for cash on delivery (COD) order refunds – COD refunds take the longest as they involve the manual collection of payment details. Often, consumers do not feel comfortable sharing these details. To avoid the hassle, Cashgram helps businesses process COD refunds by sending a link where customers can enter their preferred payment account and directly redeem the refund amount.
2. Instant refunds for all online payments – Cashfree offers instant refunds to its merchants as a part of its payment gateway. Merchants can enable instant refunds to be credited back to the original source directly from their dashboards or via Cashfree’s Instant Refund API.
3. Refunds on canceled orders using pre-authorization – Cashfree’s pre-authorization feature allows a business to place a temporary hold on some of the customer’s funds. If the order is modified or is canceled within a specific time frame (typically seven to nine days), the transaction can be marked void and the hold is lifted immediately. In addition to enabling a quick refund process, pre-authorization ensures that the business doesn’t have to pay transaction charges for canceled and refund transactions.

Quick refunds and transactional transparency are prerequisites to driving growth in an online economy. Cashfree’s suite of refund offerings covers the primary hurdles in refunds, namely cash on delivery order refunds, refunds in case of frequent cancellations, and overall duration of refund cycle.

Cashfree has demonstrated an innovative spirit and seriousness of purpose that bodes well for its future. With the increasing acceptance of mobile payments and banking alternatives, the company seems well-situated for continued growth as it extends its reach beyond India to the rest of the world.