Cross-border payments licences spawn a new funding rush for fintechs

The shift could be decisive, as small businesses seek faster, cheaper and more predictable settlements. Fintechs could intermediate 15-20% of India’s estimated $1.6 trillion cross-border flows within five years, up from low single-digits today, say the founders and analysts Mint spoke with.

While a handful of large payment gateways, including Cashfree Payments, Razorpay and PayU, have secured or applied for PA‑CB approvals, a parallel cohort of specialist startups backed by venture capitalists and even global companies such as Stripe are emerging as newer players.

The problem that was

Before RBI created a formal licensing regime, most small-ticket cross-border flows ran through the OPGSP model dominated by PayPal and a few global banks. It was not a true regulated framework—any payment provider with a tie-up to an authorised dealer bank could route export or import receipts, but with low transaction limits ($10,000 for exports and $2,000 for imports), heavy paperwork and inconsistent bank interpretations.

This led to delays and frequent documentation issues. As Indunath Chaudhary, co-founder of BriskPe, put it: “They saw us as distribution arms for other banks, so exporters often struggled to get payments recognized smoothly even when everything was in order."

Xflow co-founder Anand Balaji said the model also created visibility gaps for banks. “When RBI turned up for an audit, they had a lot of questions that banks found hard to answer," he said.

Setting the regulatory scanner

A major push for reform came in July 2023, when the Delhi high court, in a case involving PayPal Payments, held that such platforms were effectively operating a payment system and had to meet licensing and anti-money laundering norms.

By October 2023, RBI replaced the OPGSP construct with the PA-CB framework, bringing all intermediaries under direct supervision. The rules raised per-transaction limits to ₹25 lakh, required a net worth of ₹15 crore (to rise to ₹25 crore in three years), and mandated registration with the Financial Intelligence Unit–India.

In 2025, these norms were rolled into consolidated payment aggregator directions covering online, offline and cross-border aggregators under one rulebook.

Seizing the opportunity

Vivek Ramji Iyer, partner and national leader, financial services at Grant Thornton Bharat said that cross‑border remittances remain heavily paper‑driven even as India builds out digital public infrastructure. With PA-CB reforms, he now believes there is “a huge opportunity" to digitize cross-border payments.

“Banks have not moved fast enough to re‑engineer end‑to‑end documentation and workflows for exporters and importers for solving for faster cross border settlements, and the new framework is the RBI’s way of shaking up an ecosystem that had grown too comfortable with legacy processes and narrow trade and treasury businesses," Iyer added.

India’s cross‑border payment opportunity is already large. In 2023, the country exported about $432-455 billion worth of goods and roughly $340-345 billion of services, while importing around $670 billion of goods and $248 billion of services, taking the total underlying cross‑border trade flows well past $1.6 trillion in value, according to World Bank and WTO‑based estimates compiled by Santander and WITS.

Chaudhary of BriskPe sees room for regulated players to handle a meaningful slice of India’s future export flows. The government aims for around $2 trillion in combined goods and services exports over the medium term, and MSMEs account for roughly 45–50% of exports by value. If MSMEs contribute about half of the $2 trillion, close to $1 trillion of MSME‑led export flows will need better, cheaper cross‑border rails, he said adding that fintechs and PA‑CB‑licensed intermediaries can realistically capture about a fifth of that MSME opportunity over time.

Funds tracking growth trail

Such prospects are drawing investor interest in these intermediaries. BriskPe, founded by former HDFC Life executive Sanjay Tripathy, ex‑Nium CTO Nilesh Pathak and banker‑turned‑operator Chaudhary, has so far raised about $5 million in seed funding from PayU and other backers, and focuses on MSME exporters and small businesses.

Chaudhary said the company is in discussions for a larger funding round, with “more serious interest" coming from international and Asia‑Pacific investors than from traditional domestic venture funds. He, however, declined to disclose the amount BriskPe is looking to mop up.

Bengaluru‑based Skydo is also in early talks to raise around $15–20 million from a mix of domestic and global venture capital funds, while Xflow has discussed a possible $10-15 million round with existing and new international investors, said people in the know. Mint could not independently verify the details.

Xflow co‑founder Balaji confirmed the company is in conversations with investors and has “enough money in the bank" for now, but declined to comment on any specific round or valuation.

Several larger payment firms have also moved to secure their place in the PA‑CB regime. Cashfree Payments was among the first to receive a full cross‑border payment aggregator licence, while Razorpay and PayU have got approvals to operate as payment aggregators across online, offline and cross‑border flows.

Other players such as PayGlocal, EximPe and global majors such as PayPal and Wise have either received in‑principle clearance or final authorization to run PA‑CB businesses in India, creating a small but fast‑growing club of regulated entities that can legally intermediate foreign exchange for Indian exporters.

Movin Jain, co‑founder of Skydo, said investors now see cross‑border payments as “a market with massive global potential", helped by clearer regulation and higher entry barriers under the PA‑CB regime. “The growth tailwinds are equally strong. India’s exports are shifting rapidly toward digital services, and that segment is booming. Over 60% of our volume comes from services exporters and freelancers, and that demand is only accelerating with AI‑driven outsourcing and global remote work," he said.

Call for import payments boost

Founders and analysts say the early opportunity for PA‑CB players is still heavily skewed towards export receipts, rather than import payments.

In simple terms, export payments are dollars or other foreign currencies coming into India when an Indian firm sells goods or services abroad—for example, a SaaS startup in Bengaluru billing a US client in $1,000 and receiving the money in rupees after FX conversion through a PA‑CB platform.

These flows fit into the current rules because the PA‑CB framework is explicitly designed around facilitating export proceeds, while putting tighter conditions around imports. PA‑CBs can now directly onboard Indian exporters and handle their inward remittances, but import use‑cases are more constrained.

Chaudhary of BriskPe said the regulatory construct nudges players in that direction. Merchants importing cannot tie up with any cross‑border payments operator because the RBI has encouraged overseas sellers and marketplaces to open rupee accounts or work with Indian intermediaries, he said.

He argued that this leaves a gap for Indian SMEs that want to pay overseas vendors more efficiently and suggested that imports could be opened up in a phased manner, similar to how fintechs today handle payments under the liberalized remittance scheme.

Balaji of Xflow also described his company’s business as mainly export‑led, even though it sees clear demand from Indian companies looking to pay foreign suppliers. Current PA‑CB import rules, he said, typically allow onboarding of the overseas merchant or marketplace, not the Indian buyer, which constrains how much of the import journey a player like Xflow can control.

Skydo is also seeing pull on the import side in purchases of digital goods and services and B2B vendor payments, said Jain. The first involves online payments to large global platforms, where failure rates are high due to differences in card security protocols, while B2B imports to markets such as China and Vietnam suffer from slow settlements, hidden fees and manual compliance. “This is a rapidly growing opportunity and we’re scaling our product build for these use‑cases," he added.