Cart abandonment rates can go as high as 85%; Razorpay’s new Offers aim to address this

Payment technology company Razorpay has introduced Razorpay Offers in an attempt to tackle one of e-commerce’s most persistent problems: cart abandonment. Globally, drop-off rates at checkout are estimated to be around 70%, and in Singapore, abandonment in certain categories has surpassed 85%. The scale of the problem suggests that friction at checkout is an issue requiring targeted solutions. Razorpay Offers aims to be one such solution, using targeted incentives to soften the impact of unexpectedly high final prices and to nudge customers towards lower-cost payment methods.

At its core, Razorpay Offers allows merchants to present instant discounts that are triggered only when customers select specific payment methods, such as PayNow. These offers surface at checkout, when the final amount is revealed, and usually higher than expected, as shipping fees, taxes, or service charges drive it up. This increased final total is the well-documented, most common reason for customers to abandon their carts.

This solution thus aims to direct customers to more budget-friendly checkout options. In showing discounts offered under specific payment methods, the company aims to neutralise the shock that customers have at the discount page. This makes use of customer psychology to influence how they pay, while not restricting choice or reshaping fee structures.

This method also preserves the variety of payment options. After all, credit cards are amongst the most popular checkout methods, despite being the costliest options, with fees that can reach up to 3.4% plus $0.40 per transaction. Removing them risks alienating customers who expect cards to be available, potentially worsening conversion rates rather than improving them. This method aims to strike a balance between rising costs of payment acceptance and the need to maintain high completion rates for merchants

The new solution does not require any additional engineering efforts to execute, and integrates into existing Razorpay digital payment flows.

“Merchants today are looking for practical levers that improve the customer journey without any additional complexity,” said Angad Dhindsa, Head of Southeast Asia, Razorpay. “This feature is designed to fit directly into existing workflows and support merchants, navigating both conversion challenges and reducing cost of accepting payments.”

More broadly, Razorpay Offers highlights how payment platforms are evolving beyond infrastructure providers into behavioural designers. As transaction fees, consumer expectations and payment options proliferate, what may distinguish one payment tech platform for another is their ability to leverage consumer psychology and really identify and assist with problems their clients are facing.