Razorpay

Definition

Ask any Indian startup founder what payment gateway they use, and most will say Razorpay. Founded in 2014 in Bengaluru, it's grown from a simple payment gateway into a financial operating system, processing credit cards, debit cards, net banking, UPI, EMI options, digital wallets, and QR codes for businesses ranging from one-person D2C brands to enterprise SaaS companies. Razorpay holds a Payment Aggregator authorisation from RBI under the Payment and Settlement Systems Act, 2007, which means it must maintain a nodal account, conduct merchant KYC, and comply with data localisation requirements.

The product suite has expanded well beyond payment acceptance. RazorpayX handles business banking, vendor payouts, payroll, tax payments. Route splits marketplace payments between sellers. Razorpay Payroll handles salary processing and compliance. For finance teams, the real value is in the integration layer: Razorpay connects with Tally, Zoho Books, and QuickBooks, enabling automatic reconciliation of settlement data against invoices. That said, the reconciliation isn't always seamless, settlement cycles (typically T+2), payment gateway fees, and GST on those fees create timing differences that need careful handling when matching against your GSTR-1 outward supply data.

Look, if you're accepting payments through Razorpay or any payment aggregator, the compliance checklist isn't optional. Your merchant account must be KYC-verified with your GST number linked. Section 194-O of the Income Tax Act requires e-commerce operators to deduct TDS at 1% on seller payments, check your Form 26AS to ensure this is correctly reflected. Razorpay itself must follow RBI's merchant onboarding norms, monitor transactions for AML flags, and report suspicious activity. And if you're storing or processing cardholder data on your side (rather than using Razorpay's hosted checkout), PCI DSS compliance becomes your responsibility too.

Key Points

• Razorpay holds RBI's Payment Aggregator authorisation and must maintain a nodal account with a scheduled commercial bank.
• Supports cards, UPI, net banking, wallets, EMI, and QR: covering virtually every payment method Indian customers use.
• Settlement reports need reconciliation against GSTR-1 data, accounting for T+2 settlement cycles and gateway fees.
• Section 194-O requires 1% TDS on e-commerce seller payments: verify this in Form 26AS regularly.
• Your merchant account must be KYC-verified with GST number linked; non-compliance can freeze your account.
• Tally, Zoho, and QuickBooks integrations enable automated reconciliation, but settlement timing differences need manual attention.