Digital payments provider Cashfree on Wednesday said that it has introduced instant refunds for online payments on ecommerce businesses.
In a statement, Cashfree said that through instant refunds, ecommerce platforms would be able to immediately return their customers’ money through their original mode of payment, whether it is credit or debit card, bank account, online wallet, or UPI.
The instant refund solution can be availed without any changes to the existing Cashfree payment gateway integration. It also integrates with other payment gateways, internal product or Enterprise Resource Planning (ERP) process through a simple API (Application Programming Interface).
In addition to this, Cashfree claims that around 60 percent of its merchants deal with ecommerce products or services. Some major ones include Nykaa, Club Factory, Xiaomi and Ixigo.
Commenting on this move, Akash Sinha, CEO and Co-founder of Cashfree, said,
“In India’s ecommerce industry, businesses face the significant challenge of the lack of clear timelines to refund customers’ money. Slow refunds are a significant pain point as the process can take 4 – 5 working days or longer. By introducing instant refunds on online payments for the first time in India, Cashfree makes it possible for businesses to automate the whole refund process, thereby increasing customer trust and satisfaction.”
Akash further adds that Cashfree’s instant refund solution is already live with their first set of customers. The startup expects to process up to Rs 1 crore refunds instantly this fiscal year, through the launch of this product.
The startup also said that this release is timed with the Union Ministry of Consumer Affairs’ proposed guidelines for ecommerce under the new Consumer Protection Act, where firms would be granted a maximum of 14 days to process any refund requests from customers.
In the coming weeks, Cashfree is also planning on adding refunds for Cash on Delivery (COD) orders into its instant refund solution to allow integrated refund management for businesses.
Currently, Cashfree is clocking excess of $5 billion annual run rate of Transaction Processing Volume (TPV).
Founded by IIIT Hyderabad graduate Akash Sinha and IIT Kharagpur graduate Reeju Datta, Cashfree currently claims to enable more than 20,000 businesses with payments collections, vendor payouts, wage payouts, bulk refunds, expense reimbursements, loyalty, and rewards.
Incubated by payments pioneer Paypal, Cashfree, in April this year, raised $5.5 million from Korea’s Smilegate, which also saw participation from Y Combinator.