Curlec by Razorpay bridges transaction gap

FOR most of us, making a purchase online with just a click of a button has become second nature. But have you ever wondered what happens behind the scenes and the parties involved to ensure a smooth transaction process?

Meet Curlec by Razorpay, a disruptive financial technology (fintech) player that weaves the invisible thread connecting businesses and customers, facilitating transactions and essentially simplifying the world of payments.

Speaking with StarBiz, Curlec by Razorpay co-founder and chief executive officer Zac Liew said while there are a spectrum of companies in the local payment gateway scene, these businesses generally lack technological sophistication.

Although global companies make up this deficiency, they were in turn found to fall short in local adaptations.

“Curlec stands out by bridging this gap. Consumers can use their preferred payment method without compromises and businesses are no longer torn between choosing local payment gateways or international options with drawbacks in technology or localisation. “Curlec blends cutting-edge Indian technology with local knowledge and support, providing the best of both worlds,” he said.

Curlec was founded in 2018. Last year, Razorpay, an Indian unicorn startup that facilitates digital payments, acquired a majority stake in the local fintech firm as part of the former’s first international expansion into South-East Asia.

Through this partnership, Curlec by Razorpay was born, combining India’s tech capabilities with a deep local understanding of the Malaysian payments ecosystem.

Recently, the company launched an uncompromised payments solution, the Curlec Payment Gateway, which aims to serve more than 5,000 businesses with a target of RM10bil in annualised gross transaction value (GTV) by 2025.

To be sure, from well-known international payment gateways like Stripe, PayPal and Adyen to homegrown brands like iPay88, MOLPay, and eGHL, the payment gateway market is growing at an exponential rate underpinned by the growth of the eCommerce market, with increasingly more players vying for market share.

Digital Journal Inc in its recent report states the global payment gateway market is estimated to reach over US$162.68bil by 2031, exhibiting a compound annual growth rate of 21.12% during the forecast period.

At the core of its infrastructure technology, Curlec by Razorpay aims to resolve a number of pain points found among businesses. Chief among them is the ease of payments, by reducing the time it takes for transactions to be processed, particularly in the case of small and medium enterprises (SMEs), where managing cash flows can be challenging.

“If you look at any sort of technology, the trend is that everything is faster, simpler and cheaper. Its no different with payments.

“The big trend I personally see coming is that the central bank is trying to move things through domestic payment rails as opposed to going through international card networks, as an example.

Hence, everything is becoming real time, everything is becoming digital, and everything is inherently becoming more domestic as well.

“The question is then, how do you subsequently build a business around that and how do you build even more acceptance around that?

For us, it is again building the value added services, the products that the micro SMEs and SMEs can use, all the way up to the enterprises. That means that whilst payments is free and everything is done in real-time and infrastructure is better, all the services sitting on top of it are faster than what it has been in the past,” Liew said.

Banking solutions

Razorpay managing director and co-founder Shashank Kumar said tasks like payroll processing, vendor payments, tax calculations and payments are time-consuming and burdensome for businesses. Hence, the company’s goal is to transform this scenario through innovative banking solutions.

“When using consumer apps like Google, WhatsApp or Instagram, we experience highly personalised and seamless interactions, providing a great user experience. However, when it comes to financial tools for businesses, the experience often feels outdated, lacking personalisation and requiring significant effort.

“With our payment gateway offering, we aim to enhance businesses’ financial lives by providing modern, personalized, and efficient services.

“Our vision is for businesses to have real-time insights into their financial health at their fingertips, while eliminating the need to spend valuable time on complex financial operations,” he said.

Liew notes when Curlec was initially launched in the market, its primary focus was on introducing direct debit payments to the market, with the goal of empowering SMEs by providing them access to pull payments when payments were due.

By leveraging direct debit, businesses could set up a one-time authorisation, ensuring they receive their payments on time without delays.

“In Malaysia, businesses often face the challenge of delayed payments, with average credit terms of around 30 days. Hence, we aimed to tackle the issue of cash flow for businesses. Poor cash flow is a widespread problem, affecting about 95% of businesses in Malaysia.

Optimising settlement processes

“To address this, we worked on optimising settlement processes, ensuring businesses receive their funds swiftly and efficiently.

“By being one of the fastest payment gateways in the market, we aimed to enhance competition and provide businesses with the advantage of quick and instant settlement, a concept we successfully implemented as part of our innovations in India,” Liew said. Kumar pointed out that while the SMEs pain points are mainly on the ease of payments and the cost of technology, the larger enterprises and multinational corporations (MNCs) are confronted with issues of reliability, security, and the scale of operations.

“Often, larger businesses have several manual operations due to a lack of robust technological support. Hence, they are keen on finding a partner that not only facilitates seamless payment acceptance but also assists in digitising their financial operations.

“The key aspects that larger enterprises and MNCs seek include efficient customer support, quick refunds processing, and rapid settlement capabilities. When a payment gateway can significantly enhance these areas, these businesses become enthusiastic about such partnerships. By addressing these needs effectively, we empower businesses to streamline their financial processes and achieve their objectives more efficiently,” he said.

Kumar added that digital payment collection brings about an efficiency improvement of around 3% to 4% for enterprises in terms of the overall cost when compared to traditional methods like cash or offline payments.

“If we include the labour aspect, as the platform brings in a lot more automation, it improves the efficiency of a business by almost 20% to 25%,” he said.

Currently, Curlec is used by over 700 businesses ranging from SMEs to corporations. In the first half of 2023 (1H23), the company’s customer sign-up rate was 154% higher than 1H22. In terms of payment volumes, the company saw a 600% growth year-on-year in 2020 and its GTV expanded by nearly RM700mil between 2020 and 2022.

“While our target to serve more than 5,000 businesses by 2025 is ambitious, we are very bullish on this. We have already launched our product in the market, and while we have not actively promoted it, we have received positive feedback from the pilot merchants, with about 20 already onboard and many more in the pipeline. The differentiated features and user-friendly experience have been well-received, and we’re seeing encouraging traction,” Liew said.

Highly collaborative market

Recognising that fintech by default is a highly collaborative market, Kumar said the company ties up with banks to consume their products. In such a way, banks service the company through different sets of products whether it is a payment instrument or the settlement platform and the underlying banking infrastructure.

“There is a gap in the market in terms of taking these products to the SMEs and the enterprises and making it easy for consumption and simple enough that the end consumers do not feel scared or anxious while using these products.

“This is where our world really comes in, we figure out how to marry the banking infrastructure with the software that we build, aligned with the end consumer needs. And that’s the collaboration that we are able to foster internally and externally in bringing these ecosystems together – the merchant, the consumer and the banking ecosystem. And through this collaboration, we aim for a win-win solution,” he said.

Ultimately, Kumar said the measure of success for the company lies in being relevant in the day-to-day lives of businesses and consumers in Malaysia. For Liew, it is creating meaningful impact through the brand and gaining a substantial market share.

“We recognise that almost every business is underserved and we see this as an opportunity to address their needs. It is important for us to build a substantial market share and disrupt the payments industry. We have been investing quite heavily into this market and we do have some announcement in the coming months, particularly around heavy investments domestically, for us to build payment infrastructure,” he said.