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RazorpayX launches new solution to provide escrow accounts
May 11, 2023
Online payments solution company Razorpay’s neobank arm RazorpayX on Tuesday launched ESCROW+ solution to help merchants with smooth money transfers and avoid compliance issues as in certain industries, receiving funds in a current account is not an ideal solution for a business. This is because the entire money in the account doesn’t belong to the business.
These businesses either receive funds on behalf of others or operate under a partnership model in which funds from another business entity are in their current account to manage operations. This complicated money flow could lead to a foreseen compliance issue causing hefty penalties for businesses, the company said in a statement.
The new solution provides businesses with an Escrow trustee, in partnership with Axis Trustee Services, who are vetted and on-boarded by RazorpayX. It also offers merchants an Escrow account to route funds they are receiving on behalf of end beneficiaries to ensure the right tax treatment and reporting.
“With verticals such as gaming, co-lending, peer-to-peer lending, and marketplace & e-commerce facing hurdles in terms of compliance and payments, we wanted to extend a solution that will address their pain points while focusing on what we have always done – making money movement simpler, compliant, and worry-free,” said Ayush Bansal, Vice President and General Manager, RazorpayX & Razorpay Capital.
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