How Razorpay Became India's Largest Payments Company

Harshil Mathur never intended to build a payments company. Fresh out of IIT, he worked at an oil company in the Middle East — a job he never enjoyed — and spent evenings and weekends coding side projects. When he tried to accept payments for a social crowdfunding platform, he hit a wall: integrating with Indian banks was extraordinarily complex, the experience was «built for large companies», and remarkably, accepting cash was easier than digital payments.

This inversion — a digital system harder than a physical one — violated every principle of technology as democratization. «Social media gives everyone a voice. Internet gives everyone a channel. E-commerce gives everyone a selling point,» Mathur explains. When a digital system creates silos instead of democratizing access, «it felt completely incorrect.» He began spending all his free time in Bangalore startup Facebook groups, discovering that nearly every founder faced the same pain. The problem was universal, unsolved, and deeply felt. In hindsight, Mathur admits, «If I knew what I knew today, maybe I would have not started» — but ignorance of the problem's difficulty became an advantage.

Just a week before YC's Winter 2015 demo day, Razorpay received final approval and went live. They launched on TechCrunch, presented at demo day, and fielded investor interest. Two weeks later, their enabling bank pulled the plug after a single customer complaint. Fifty live merchants — founders who had finally trusted a small payment gateway — were abruptly cut off. The team faced an existential decision: hide, deflect, or own the crisis.

Mathur and his co-founders chose radical transparency. Six people sat in a room and personally called every single customer to explain what happened, why it happened, and what they were doing about it. «When Indians abuse, they abuse a lot,» Mathur recalls — the team absorbed «full-on Hindi abuses» but never stopped picking up the phone. Within four to five days, they secured a new partner and restored service. Remarkably, many of the merchants who had vented their fury are still Razorpay customers today. The lesson: «B2B is a business of trust, and trust at the end of the day — nothing replaces the human touchpoint.» Even today, Razorpay has a rule that if a support exchange crosses three or four messages, «you pick up the phone and call the customer.» AI may automate many things, but Mathur insists customer support will remain human because «it is a channel to establish trust.»

A few months ago, Razorpay's leadership sat down and asked a dangerous question: «If I were to start Razorpay today, how would I build it?» They mapped out onboarding, integrations, support, and platform interactions from first principles, then committed to making it happen. Mathur, now «addicted to Claude», believes AI is returning founders to what they love most — building — rather than people management. But he warns against the incumbent fallacy: waiting to «respond to the market» means you're already too late.

Razorpay completely reinvented its platform end-to-end and launched it recently. Mathur is emphatic: «AI is going to bring down time to build so rapidly that the only differentiation is going to be how fast can you move, how fast can you decide what to build.» The build itself will compress; the moat will be speed of decision and clarity of vision. Every company that waits to respond is, in Mathur's view, «already dead.» The only path forward is to anticipate the market and move today — exactly as Razorpay did with UPI in 2016.