Razorpay, Visa tie up to help small businesses tackle Covid impact

Fintech unicorn Razorpay has partnered with global payments technology company Visa to launch RazorpayX Corporate Cards. These bank-issued cards will help provide relief and stabilize the financial operations of severely impacted business owners of start-ups and small and medium enterprises, who are grappling with a chaotic economic environment.

With a higher credit limit as compared to other corporate and personal cards, the company said RazorpayX’s corporate cards will empower founders to free up working capital expenses with zero personal risks and liability. It would also provide a convenient repayment offering of up to 45 days of interest-free credit. Razorpay’s new card offers exclusive features, specifically designed for small business owners to weather the pandemic impact. The company aims to support over 100,000 entrepreneurs in the next four months with the new initiative.

“It’s unfortunate to see that over one-third of small businesses have dipped into their personal funds to stay afloat during the pandemic. Currently, most finance solutions such as bank loans cater to the strengths of large companies, leaving the large number of SMEs with limited access to financing. Financing rates are expensive and not available for all businesses,” said Harshil Mathur, CEO and co-founder, Razorpay. “With RazorpayX corporate cards, we hope to solve the problem of access to finance for businesses owners and help improve their cash flows. We believe financing solutions like these will reignite innovation that can speed up the recovery of the Indian economy.”

Razorpay said the corporate cards will help entrepreneurs set up recurring and non-recurring online payments. The would help to monitor monthly operational expenses such as SaaS subscriptions, digital marketing expenses, utilities and replenishing inventory in a digitized manner. They would offer business owners dynamic credit limits of up to Rs 20 lakh. They can be used to make online payments as well as purchases at a PoS (point of sale) in a brick-and-mortar.

“Small and medium businesses are among the most impacted by the pandemic across the world. This segment contributes to almost 40 per cent of India’s GDP (gross domestic product),” said Shailesh Paul, head of merchant sales and acquiring, India and South Asia, Visa “It is essential that we make it simpler for them to make and accept payments, and access credit, in a seamless digitised manner.”

According to a recent Entrepreneurship Survey by GoDaddy, more than 70 per cent of startups and SMEs saw an overall decrease in investment leading to a reduction in revenue. Around 48 per cent said that maintaining cash flow was the most pressing need to help keep their business running. From restaurants to manufacturers, gyms to wedding venues, many small businesses are struggling, and owners aren’t sure how they will survive this period that has frozen their revenues.