8 months ago
RBI's New Framework Boosts Fintech Cross-Border Payments
The Reserve Bank of India has started giving special permits to fintech companies, allowing them to handle international money transfers directly.
Before, these companies had to work through banks, which could be slow and complicated.
Now, they can manage their own systems, choose their banking partners, and serve more businesses that sell goods and services abroad.
This change is expected to make international payments faster and more transparent, helping small and medium-sized businesses grow.
Several fintech companies have already received these permits and are expanding their services.
The government hopes this will boost India's exports and make the country a bigger player in global trade.
The RBI has started issuing licences under the new PA-CB framework, allowing fintechs to handle cross-border payments directly.
Fintechs like Razorpay, Cashfree Payments, and Skydo have secured these licences, gaining regulatory independence from banks.
The shift aims to support the growth of MSME exports, which have tripled in recent years, and aligns with the government's goal of reaching $1 trillion in exports by FY26.
Fintechs see strong financial incentives in cross-border transactions, which offer higher margins than domestic payments.
While banks still dominate the import-export payments space, fintechs are gaining traction among smaller exporters and internet-first brands seeking faster settlements and simpler onboarding.
- Who
- Fintech firms like Razorpay, Cashfree Payments, Pine Labs, PayGlocal, Skydo, BriskPe, and Exim Pe
- What
- The Reserve Bank of India (RBI) has started issuing licences under its new Payment Aggregator–Cross Border (PA-CB) framework, allowing fintechs to handle international collections and payouts directly
- Where
- India
- When
- The RBI introduced the revamped framework in 2023 and has been issuing licences since then
- Why
- To facilitate faster and more transparent cross-border payments, reduce dependence on banks, and support the government's goal of reaching $1 trillion in exports by FY26
Key facts
- Licensed Fintechs
- Razorpay, Cashfree Payments, Pine Labs, PayGlocal, Skydo, BriskPe, Exim Pe
- Previous Model
- OPGSP (Online Payment Gateway Service Providers)
- New Model
- PA-CB (Payment Aggregator–Cross Border)
- MSME Exports Growth
- Rs 12.39 lakh crore in FY25 from Rs 3.95 lakh crore in FY21
- Skydo Funding
- $10 million in Series A round led by Susquehanna Asia Venture Capital
- Cashfree Payments Growth
- 200% year-on-year growth in transaction volumes
- AD-I Bank Partner
- JP Morgan Payments
Quotes
Movin Jain
Co-founder of Skydo
“Under OPGSP, a bank would apply to RBI on your behalf. If the bank decided to end the partnership, your authorisation ended too.”
financialexpress.com
“That regulatory independence completely changes how we operate.”
financialexpress.com
Yashraj Erande
Partner and director, BCG India
“As India builds stronger trade and financial ties with new markets, we will see more currency corridors become liquid.”
financialexpress.com
“Enterprise value will eventually shift to whoever controls these rails. That’s why fintechs want to build early.”
financialexpress.com
Aakash Sinha
Co-founder and CEO of Cashfree Payments
“The new licence has created a level playing field.”
financialexpress.com
“The earlier OPGSP model was not standard and every bank used to interpret it differently.”
financialexpress.com
Vijay Mani
Partner, banking and capital markets leader at Deloitte
“Cross-border e-commerce is expected to pick up steadily, and there is a need for more targeted regulation.”
financialexpress.com
Sources
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