What is Razorpay Payment Method and How its Work

Razorpay is a secure online payment gateway that allows businesses to accept payments through UPI, cards, net banking, and wallets. It processes transactions instantly, ensures data security, and transfers funds directly to the merchant’s account, offering a smooth and reliable payment experience.

1. Home » What is Razorpay Payment Method and How Does It Work?
What is Razorpay Payment Method and How Does It
Work?
By Mega Pavalarajan | Last Updated on October 16, 2025
The rise of digital payments has changed the way businesses and customers
interact. Today, seamless transactions aren’t just a convenience; they’re an
expectation. This is where the Razorpay Payment Method comes into play.
Trusted by startups, e-commerce sellers, OTT platforms, and global businesses,
Razorpay simplifies payment collection while ensuring security and flexibility.
In this guide, we’ll cover:
What Razorpay Payment Method is
How it works step-by-step
Key features and benefits
How to integrate it with platforms like Flicknexs OTT
Start Your Free Trial

2. Razorpay vs PayPal vs Razorpay (comparison)
Let’s dive in.
What is Razorpay Payment Method?
In simple terms, Razorpay is a payment gateway that allows businesses to
accept, process, and disburse payments online. It acts as a bridge connecting
customers, merchants, and banks, making digital transactions smooth and
secure.
Customers can pay via cards, UPI, wallets, or net banking.
Razorpay processes the payment in real-time.
Funds are transferred safely to the merchant’s account.
Originally focused on India, Razorpay has expanded globally, offering multi-
currency support and easy integration with platforms across industries.
Think of it as the backbone of online paymentsworking silently to ensure your
transactions happen securely and instantly.
How Does Razorpay Work?
When you think about online payments, the process might look instant on the
surface, but behind the scenes, several steps happen within seconds to make
sure the transaction is smooth and secure. The Razorpay Payment Method
simplifies this process by acting as the middle layer between customers,
merchants, and banks.
Table of Contents

3. Here’s a step-by-step breakdown of the Razorpay payment flow:
1. Customer Initiates Payment
The process begins when a customer chooses to pay on a website or mobile
app. With Razorpay, they can select from a wide variety of options, including
UPI, debit/credit cards, net banking, wallets, or BNPL (Buy Now, Pay Later).
2. Merchant’s Website or App Sends the Request
Once the customer enters their details and clicks pay, the merchant’s
platform immediately sends this request to the Razorpay payment gateway.
3. Razorpay Gateway Processes the Request
Razorpay now takes over. It securely routes the payment request to the
customer’s issuing bank or card network. This ensures the transaction is
directed to the right financial institution for approval.
4. Authorization & Verification
At this stage, the bank verifies whether the customer has sufficient funds or
a credit limit. Razorpay ensures that the data is encrypted using PCI DSS
compliance, SSL protocols, and tokenization. This prevents fraud, phishing,
or unauthorized access.
If approved, the transaction goes through successfully.
If declined, Razorpay notifies both the customer and the merchant
instantly.
5. Funds Settlement
After successful authorization, Razorpay collects the payment and transfers
it to the merchant’s account. Settlement usually happens within T+2 days (2
business days after the transaction), though merchants can also opt for
instant settlements at an additional fee.

4. Why Razorpay Is Better Than Traditional Banking Workflows
Let’s compare a typical traditional banking workflow vs Razorpay’s payment
flow:
Traditional Banking
Manual steps often require the customer to input bank details
repeatedly.
Limited payment options (mostly net banking or card).
Delayed settlements and manual reconciliation.
Razorpay Workflow
Fully automated, digital-first process.
Supports multiple payment methods on one platform.
Provides real-time tracking and reconciliation through its dashboard.
Settlements are faster and more transparent.
The Razorpay Advantage
Unlike traditional systems, Razorpay isn’t just a “middleman.” It actively enhances
the customer experience and merchant convenience by:
Reducing checkout time with smart, one-click payments.
Preventing fraud with advanced encryption and AI-driven monitoring.
Providing merchants with detailed analytics and insights for every
transaction.
Supporting recurring billing, which is critical for OTT, SaaS, and e-learning
businesses.
How to Register in Razorpay (Step-by-Step Guide)

5. Step 1: Visit the Razorpay Website
Go to Razorpay’s official website. Click on the “Sign Up” button at the top-right
corner.
Step 2: Sign Up with Your Details
You can sign up using your Email ID or Phone Number. Create a strong password
for your account. Then click “Sign Up”.
Step 3: Verify Your Email and Phone
Razorpay will send a verification email to your email ID and an OTP to your
phone. Verify both to continue.
Step 4: Complete Your Business Details
Fill in your business type (individual, startup, or company), business name, and
business website or app link if available.
Step 5: Enter Bank Account Information
Provide your bank account number, IFSC code, and account holder details to
receive payments.
Step 6: Upload KYC Documents
Razorpay requires KYC verification. Upload documents like:
PAN Card
Aadhar Card or Passport
Business registration proof (for companies)
Step 7: Verify Your Identity
Razorpay may ask for a quick video verification or additional documents to
confirm your identity.
Step 8: Set Up Payment Methods

6. Once your account is verified, you can configure payment methods like UPI,
cards, wallets, and net banking.
Step 9: Integrate Razorpay with Your Website or App
Use Razorpay APIs or plugins to integrate payments into your website, app, or
platform. You can also use Flicknexs integration if you run an OTT platform.
Step 10: Start Receiving Payments
After completing setup and verification, your Razorpay account is ready to
receive online payments securely.
Why recurring billing matters for OTT businesses:
If you’re running a subscription-based streaming platform (SVOD model),
recurring billing automates renewals.
Customers are charged automatically on their renewal date → no manual
effort, fewer failed payments, reduced churn.
How Settlement Works with Razorpay
When a customer makes a payment, Razorpay processes it instantly.
Funds are transferred to your merchant account after a standard settlement
cycle (usually T+2 days in India, meaning 2 business days after the
transaction).
You can view all settlements in the Razorpay Dashboard, with detailed
reports on successful, pending, or failed payments.
Example:
If you’re an OTT creator charging ₹299/month for subscriptions:

7. Customer pays via UPI/card on Jan 1st.
Razorpay verifies, encrypts, and processes payment instantly.
By Jan 3rd (T+2 days), funds are settled into your business bank account.
How to Use Razorpay Payment Method with Flicknexs
Why Flicknexs Integrates with Razorpay
When running an OTT or VOD platform, one of the biggest challenges is ensuring
your customers can pay easily, securely, and in the method they prefer. Flicknexs,
a powerful OTT/VOD platform, solves this by integrating the Razorpay Payment
Method, a gateway trusted by thousands of businesses worldwide.
With Razorpay inside Flicknexs, businesses can power SVOD (subscription-
based models), TVOD (pay-per-view purchases), and hybrid OTT revenue
models. This means whether you want your users to pay monthly, purchase a
single video, or choose a mix of both, the system is already built in and optimized.
Here’s how it helps different businesses:
Content Creators → monetize securely with recurring billing or one-time
video sales.
E-learning Platforms → accept recurring subscription payments for courses
and learning materials.
Media & Streaming Companies → expand globally using Razorpay’s multi-
currency support and wide payment method coverage.
By bringing together the flexibility of Flicknexs and the security of Razorpay,
businesses can focus on creating great content while the platform handles
smooth, hassle-free payments.

8. Steps to Enable Razorpay in Flicknexs
The Payment Settings section allows you to configure and manage how
payments are handled on your platform. These settings play a crucial role in
enabling smooth transactions for subscriptions, purchases, rentals, and other
monetized features.
Payment Gateway Configuration
After navigating to the Payment Settings section in your admin panel, you’ll see
various supported payment gateways. To configure Razorpay, locate the
“Razorpay” option and click on the Configure button next to it. This will take you
to the dedicated Razorpay Configuration Page, where you can fine-tune all the
necessary settings to integrate Razorpay with your platform.
Razorpay Configuration Option
Enable Razorpay
Purpose: This toggle activates or deactivates Razorpay as a payment
method on your platform.
How It Works:
If enabled, users can pay via Razorpay during checkout.
If disabled, Razorpay will not be available as a payment option to end
users.
Use Case: Keep it disabled if you are using another payment method or not
yet ready to launch Razorpay.

9. Enable Coupon Status
Purpose: Allows Razorpay to recognize and apply any coupon codes you’ve
created directly within your Razorpay dashboard.
When to Enable:
Enable this only if you’ve configured promotional or discount coupons in
your Razorpay account for your subscription plans or other payment
flows.
Disable it if you do not plan to use coupons.
Enable Payment Mode
Purpose: Sets the operational mode of Razorpay integration – either Live or
Test.
Options:
Live: Enables real transactions with actual money.
Test: Uses Razorpay’s sandbox environment to simulate transactions
without real funds.
Use Case:
Choose Test mode during initial setup and testing.
Switch to Live only when you’re ready to go live with actual customers.
Razorpay Label
Purpose: This is the name or label you want to display for the Razorpay
payment method during checkout.
Example: You can enter something like “Pay with Card (Razorpay)” or “Secure
Credit Card Payment”.

10. Razorpay Key Configuration
To enable communication between your platform and Razorpay, you need to
enter your API keys from your Razorpay dashboard.
Razorpay Live Keys
Used when you’re running the site in Live Mode to accept real payments.
Live Publishable Key
Found in your Razorpay Dashboard under Developers > API Keys.
Used on the frontend to tokenize and secure payment data.
Live Secret Key
Also found under Developers > API Keys.
Used on the backend to authenticate API requests and process
payments securely.
Razorpay Test Keys
Used in Test Mode to simulate payments while you’re still setting up or testing
the system.
Test Publishable Key
Similar to the live key, but only used for testing purposes.
Test Secret Key
Connects your platform to Razorpay’s sandbox API for testing
functionality before launching.
Benefits of Using Razorpay with Flicknexs
The integration of Razorpay and Flicknexs isn’t just about accepting money, it’s

11. about creating a frictionless payment experience that helps increase revenue.
Here’s why it matters:
1. Global + Local Support
Whether your audience is in India or abroad, Razorpay supports multi-
currency payments alongside popular local methods like UPI and wallets.
2. Seamless Recurring Billing
Perfect for subscription-based OTT platforms (SVOD). Users can set up
auto-renewals, reducing cancellations and boosting customer retention.
3. One-Click Checkout
A simplified checkout process leads to lower cart abandonment rates and a
higher conversion rate.
4. Bank-Grade Security
PCI-DSS compliance, tokenization, and two-factor authentication keep every
transaction safe.
5. Transparent Settlements
Razorpay provides clear reports and real-time analytics, so businesses can
track payments, refunds, and settlements directly in their dashboard.
R. Easy Scalability
As your OTT business grows, Razorpay scales with you, handling thousands
of payments without compromising speed or security.
Razorpay vs PayPal vs Stripe (Detailed Comparison)
When choosing a payment gateway, businesses often compare Razorpay,
PayPal, and Stripe, three of the most popular solutions in the market. Each has
unique strengths, pricing models, and ideal use cases. Let’s break it down:

12. Feature Razorpay PayPal Stripe
Availability
Primarily India-first,
expanding globally
Available in 200+
countries worldwide
Strong global
presence in 40+
countries
Transaction Fees
~2% for domestic
payments, 3–3.5%
for international
4.4% + fixed fee per
transaction (higher
for cross-border)
2.9% + fixed fee
(standard global
pricing)
Integration
APIs, plugins
(Shopify,
WooCommerce,
Magento), hosted
checkout pages
Very easy setup,
widely accepted,
simple checkout
links
Advanced APIs,
SDKs, and highly
customizable for
developers
Supported Payments
UPI, Cards, Net
Banking, Wallets,
EMI, BNPL
Cards, Wallets, Bank
Transfers, PayPal
balance
Cards, Wallets, ACH,
Direct Debit, Crypto
(limited)
Ease of Use
Beginner-friendly,
with strong India-
focused support
Extremely beginner-
friendly, best for
freelancers &
individuals
Requires technical
setup, but highly
scalable
Security
PCI-DSS compliant,
fraud detection, 2FA
Strong buyer
protection, dispute
resolution
PCI compliance, AI-
driven fraud
detection
Best For
Startups, OTT/VOD
platforms, India-first
businesses
Freelancers, small
businesses,
international sellers
SaaS companies,
tech startups, global
enterprises
Razorpay
Razorpay is ideal for Indian startups, OTT/VOD platforms, and e-learning
businesses. It offers multiple payment modes like UPI, BNPL, cards, and wallets,
making it highly versatile for both local and global transactions. The recurring
billing feature is perfect for subscription-based businesses such as SVOD OTT

13. platforms.
Pros:
UPI & BNPL support (great for the Indian market)
Easy integration (APIs + plugins)
Strong analytics dashboard
Cost-effective for domestic transactions
Cons:
Global reach is still growing compared to PayPal/Stripe
Limited support in some international regions
PayPal
PayPal is one of the most recognized digital wallets worldwide, making it a go-to
choice for freelancers, international sellers, and small businesses. Customers
trust PayPal for cross-border payments, though its transaction fees are higher.
Pros:
Widely accepted across the globe
Beginner-friendly with no coding required
Trusted by customers for international purchases
Simple checkout and invoicing options
Cons:
High transaction fees (especially for international payments)
Limited customization options compared to Razorpay
Not as business-focused as Razorpay for subscription models

14. Stripe
Stripe is a developer-friendly solution designed for scalable SaaS businesses and
global startups. It offers powerful APIs, subscription management, and advanced
customization. Stripe is often preferred by tech companies looking for global
reach and flexibility.
Pros:
Highly customizable with advanced APIs
Supports recurring billing, SaaS models, and even crypto (in limited markets)
Global scalability with support for 135+ currencies
Strong fraud prevention and AI-based risk management
Cons:
Requires technical knowledge to set up
Transaction fees slightly higher than Razorpay (but lower than PayPal for
international)
Customer support can be complex for smaller businesses
Key Takeaway
Choose Razorpay if your focus is India-first, OTT/VOD platforms, or
subscription models (SVOD, TVOD, Hybrid).
Choose PayPal if you’re a freelancer, small business, or international seller
looking for a simple, trusted payment solution.
Choose Stripe if you’re a scalable SaaS or tech startup that needs deep
customization, developer tools, and global reach.
Conclusion

15. The Razorpay Payment Method is more than just a payment gateway; it’s a
complete digital payment solution designed to help businesses grow with speed,
flexibility, and trust. Unlike traditional banking systems, Razorpay offers a modern
infrastructure that supports multiple payment modes, seamless integration, and
advanced security compliance, making it a go-to choice for startups, enterprises,
and global creators alike.
For businesses in the digital economy, payment flexibility is critical. Whether
you’re an OTT platform powered by Flicknexs, an e-learning site with recurring
subscriptions, or an e-commerce brand handling one-time purchases, Razorpay
ensures that your customers enjoy a smooth checkout experience while you gain
reliable settlements and actionable insights through its powerful dashboard.
Beyond transactions, Razorpay empowers businesses to adopt diverse OTT
revenue models like SVOD (subscriptions), TVOD (pay-per-view), and hybrid
systems with ease, helping creators monetize their content efficiently. With
features like RazorpayX, smart analytics, fraud protection, and multi-currency
support, the platform goes far beyond basic payment processing; it becomes a
true partner in your growth journey.
Start Your Free Trial
Frequently Asked Questions
Yes, Razorpay is safe and secure. It is PCI DSS compliant, uses
01
Is Razorpay Payment Method safe for online
transactions?