Juspay vs Razorpay: New Battle Begins

Hey there,

SoftBank-backed Juspay now has RBI's approval to be a payment aggregator!

And, this could be a big THREAT to Razorpay. But, how?

Here's the background: Juspay, the company behind BHIM UPI and Namma Yatri, is evolving. Previously, it served as a payment gateway unifier, handling the technology behind transfers.

Now, with approval from the RBI, it is expanding its role to become a payment aggregator, managing funds and settlements.

This change puts Juspay up against big names like Razorpay, PayU, and PineLabs. And, Juspay isn't new to big projects.

They've worked on major government initiatives and have current clients like CRED, Myntra, JIO, and many more. So, it's in a strong position to lead in this field. Here's why:

1. Beyond Just a Gateway: With RBI's approval, Juspay steps up as a full-stack payment aggregator. This lets them handle money directly. It's a big move from just unifying gateways to owning the whole payment process. This could mean more market share and higher revenue.

2. Tech Edge in Payments: Juspay is renowned for its technical expertise and reliability. They possess technology that enhances the likelihood of successful transactions. In a market where transaction failures are common, this is a significant advantage. It could attract more businesses, posing a direct challenge to Razorpay and others.

3. New Markets, New Opportunities: Juspay isn't just sticking to traditional payment aggregation. It's exploring business payments, open credit networks (OCEN), and the Open Network for Digital Commerce (ONDC). This broadens its market reach, possibly outdoing competitors.

4. US Expansion with Hyperswitch.io: Juspay's move into North America is a bold step. They're taking their open-sourced payments platform, Hyperswitch.io, to new markets.

This isn't just about more money. It shows Juspay's ambition to grow globally, which could put them ahead of competitors focusing only on India.

5. Financial Muscle for Innovation: With $60 million from SoftBank and a 70% revenue jump from FY21 to FY22, Juspay has resources for tech investment and market expansion.

This financial clout lets it compete fiercely with established players.

All of these factors place Juspay in the same arena as larger, more established players who have been in this market for years. However, Juspay's technical prowess and current standing indicate its ability to compete.

Now, everything hinges on Juspay's ability to fulfill its promises, provide superior and more comprehensive offers, and maintain trust and reliability with its partners.

✍️ Jargon of the day

Payment gateway vs. Payment aggregator

A payment gateway is a tool that securely transmits online payment data to process transactions. It acts as an intermediary between a merchant's website and the payment processor.

A payment aggregator, on the other hand, allows multiple merchants to accept payments under a single account, handling the distribution of funds to each.

While gateways focus on the technical side of payment processing, aggregators simplify the financial management for small businesses. Essentially, gateways facilitate individual transactions, whereas aggregators manage and distribute payments for a group of merchants.

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Cheers,
Karthik