On January 20th, the online publication The Head and Tale broke the news that two of India's largest payment aggregators and gateways, Razorpay and Cashfree, were severing ties with India's largest payment orchestrator or router, Juspay.

Payment gateways are the simplest. They simply facilitate a payment transaction between a merchant's website and a bank. But these days, we have so many ways to pay. Cards, UPI, net banking, wallets, etc. Many payment gateways also aggregate these methods and offer customers and merchants a choice.

Hence, they're payment aggregators.

Now, most leading gateways are also aggregators. This includes Razorpay, Cashfree, PayU, Paytm*, etc.

The most important layer right now, and the topic of today's discussion, is orchestration or routing.

Like a conductor in an orchestra, orchestrators sit above payment gateways and payment aggregators and determine who gets to play.

What that means is when a customer is trying to do a transaction on a merchant's site, the orchestrator or router assigns it to a particular payment gateway or aggregator, depending on various things like where success rates are high, who's offering competitive rates, etc.

That's what happens with large organisations like Flipkart, BigBasket, Swiggy, etc.

For instance, you must have seen when you're trying to make a transaction on any of those sites after you enter your card details, you must have seen the Juspay modal, or briefly, the website appear when you're trying to enter your OTP, or it's fetching that.

That's what Juspay does.

It sits above payment aggregators and gateways, and it kind of plays this conductor role, assigning transactions to where they are most likely to succeed or where they are most competitively priced for the merchant that Juspay is operating with.

That’s the topic of today's discussion because Razorpay and Cashfree decided to stop working with Juspay.

Now that's very interesting, and it's essentially the trigger to what we’d like to think of as sort of like a much larger war which is going to break out with one set of payment aggregators on one side and the other side another set of payment aggregators, and of course, Juspay.

Joining hosts Rohin Dharmakumar for the discussion are Vimal Kumar, founder of Juspay; Anand Balaji, co-founder of Xflow and former India head for Stripe; and Abhishek Madan, who used to be vice president of Product at Paytm*.

Welcome to episode 28 of Two by Two.

*Paytm founder Vijay Shekhar Sharma is an investor in The Ken.

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Additional reading:

Razorpay and Cashfree woke up and chose violence

Additional listening:

Why Stripe could not become the Stripe of India

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This episode of Two by Two was produced by Hari Krishna. Rajiv CN, our resident sound engineer, mixed and mastered this episode.

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