Azul Arc, a 20-year-young software development company—one of the legion of boutique operators in India’s $246-billion offshore information technology (IT) services exports industry—faced a recurring problem until about a year ago. The company’s subsidiary in Mumbai, which relied on two of India’s largest publicly listed banks to receive payments from its US customers, suffered significant foreign-exchange (forex) conversion losses on each such transaction. It was losing as much as ₹3 per $1 even when the US dollar appreciated.
To address the issue, Azul Arc began to explore alternatives, and finally settled on a cross-border payments aggregator (PA-CB) called Skydo. The change was immediate and very visible.
“Now, the process takes less than a day, unlike with banks where we waited for a day or two. In those two days, the dollar rate would often fluctuate,” explains Nikita Saldanha, head of accounting and accounts receivable, Azul Arc. With Skydo, the company is sure it will get the latest forex-conversion rate.
Speed—or rather, the lack of it—is another problem with banks, says Lionel Philip, a Mumbai-based chartered accountant, who co-founded Purple Cliq Ventures in 2021. The company, which sells luxury fragrances under the brand Israel Philip, earns more than 55% of its revenue from exports.
“My major issue with traditional banks was the time factor: three or four business days. With public holidays, it typically became four or five days per consignment in addition to a processing fee,” he explains. After tying up with a PA-CB, Purple Cliq’s remittances were coming in within 24 hours, and there was transparency on processing charges.
For decades, Indian exporters have depended on large banks, which dominate India’s cross-border payments industry. As authorized dealers, Category I scheduled banks are permitted by the RBI to handle all types and sizes of foreign transactions, in compliance with the Foreign Exchange Management Act (FEMA). But delays, fluctuating rates and an opaque process that left them groping in the dark impacted businesses negatively.
In an effort to address the issue, on 9 April, the Reserve Bank of India (RBI) issued a circular to banks with guidelines to facilitate faster cross-border inward payments and ensure timely “credit to the beneficiary’s account”.
More pointedly, flagging the lack of transparency, the central bank also instructed banks to provide a digital interface to their customers to facilitate and monitor forex transactions.
The RBI action could have come sooner, but exporters are nevertheless pleased with the regulatory push. The foreign-exchange remittances pie has been growing since 2024-25, when India’s inward remittances alone set a new record by soaring past the $135 billion mark (14% growth), according to RBI data. These are typically payments made by NRIs, and overseas customers of Indian freelancers’ projects.
The pie is expected to grow bigger as exports rise. In 2025-26, non-petroleum exports—engineering goods, electronics, gems and jewellery, drugs etc—grew 3.6% year on year to $388 billion, according to the commerce and industry ministry. Total exports (both goods and services) for the same period rose to $860 billion, growing 4.2% year-on-year (y-o-y).
The creation of PAs-CB
The RBI circular is the latest in a series of moves by the regulator over the past three years to enhance competition in the cross-border payments business.
First, the central bank recognized non-banking technology startups as ‘PA-CB’ or ‘payment aggregators in cross border payments’ from 1 November 2023 onwards. “PAs-CB are entities that facilitate cross-border payment transactions for import and export of permissible goods and services in online mode,” the RBI stated in a circular then.
Tech-led non-bank ventures had to comply with the RBI’s PA-CB regulations to be recognized, and get a licence to facilitate outward remittances (PA-CB-O), inward remittances (PA-CB-I), or both (PA-CB-I&O).
As of 12 March, at least 28 payment aggregators have received a PA-CB-I&O licence. They include pureplay cross-border payment aggregators such as PayGlocal, XFlow and Skydo, payment-gateways such as RazorPay, Cashfree and Easebuzz, as well as the publicly-listed PAs Paytm and Pine Labs.
PayGlocal, a pureplay PA-CB, has grossed more than $1.5 billion in gross transaction value in foreign remittances since its inception (2021), says Prachi Dharani, co-founder of PayGlocal. It was an early mover in the foreign inward remittances segment. After getting its RBI Iicence (PA-CB-I&O) in September 2024, PayGlocal began to onboard merchants, and has crossed the 6,000-mark.
In December 2025, the annualized value of B2B cross-border payments processed on PA-CB XFlow’s platform touched $1 billion. In other words, it hit a monthly transaction value that sets it up to reach $1 billion in gross transaction value (GTV) in 2026. GTV refers to the value of transactions processed on a payment-aggregator platform.
As a payment-infrastructure venture, XFlow has more than 15,000 clients, and its APIs power nearly 50 digital platforms, including Drip Capital and Easebuzz. An API, or application programming interface, is a set of rules that enable software applications to communicate with each other.
Skydo, too, has hit a monthly transaction value that sets it up to gross $1 billion in GTV in 2026. It has 30,000 customers, including manufacturing exporters, e-commerce sellers, technology companies and freelancers.
One regulation
On 15 September 2025, the RBI, with its Master Direction on Regulation of Payment Aggregators, brought PAs across categories, including in cross-border payments, under one regulation. In effect, it increased the pool of PA-CBs for foreign remittances, and spurred competition from technology startups.
Consequently, the treasury and forex arms of India’s largest banks are feeling the heat. After all, they generate fees from exporters for SWIFT (a secure global messaging network that banks use) communication charges, letter-of-credit issuance fees, bank guarantee commissions, flat remittance processing fees, and so on.
Further, banks in India generate revenue from ‘profit on exchange transactions’, the commercial margin on such remittances. This is a vital driver of profitability because of the volume of transactions and currency volatility. What exporters like Azul Arc rue about traditional bank-to-bank SWIFT transfers is the lack of transparency in forex conversion.
Mint reached out to three of the five largest banks in India for their views. They declined to participate. Neither have publicly listed banks addressed the subject of cross-border payments in quarterly earnings calls over the last two years.
The SWIFT architecture
India’s largest banks have thrived on traditional payment rails for cross-border payments, primarily the SWIFT network, which spans more than 220 countries and comprises 11,500 banks, financial institutions and corporations globally. SWIFT enables India’s largest banks to work with the largest USD clearing banks on the network (such as JP Morgan Chase and Citi) reducing the time for a wire to under three days.
The SWIFT wire process takes at least a couple of days because of time-zone differences, and processing by correspondent banks.
Once the foreign-inward remittance reaches the Indian bank, it has to check if the money transferred complies with laws such as FEMA. Parallelly, the bank’s relationship manager for the customer follows up with exporters or merchants in India for details such as ‘purpose code’. This last leg of the transaction turns out to be the most time consuming and frustrating experience for exporters.
In its 9 April circular, the RBI reiterated that banks must now credit inward payments received during forex market hours to the beneficiary’s account within the same business day, and payments received after market hours on the next business day, subject to compliance with all regulatory requirements.
Transparency is vital in the last leg of the inward remittance process. For example, Azul Arc’s Saldanha faced issues with banks when she asked for a SWIFT copy. “They also would not provide me the FIRC copy that I needed for annual compliance,” she recalls.
An FIRC is the Foreign Inward Remittance Certificate—the proof that foreign currency has been received in India. Banks authorized by the RBI for foreign remittances are required to issue an FIRC copy.
The PA-CB edge
In this backdrop, PA-CBs have capitalized on three opportunities to improve exporters’ experience with SWIFT foreign-inward remittances. They begin by tackling the last-mile problem first.
“We encourage exporters to provide documentation up front before reconciling their funds and bringing the money to India,” says Anand Balaji, co-founder of XFlow.
Two, the PA-CBs provide transparency on forex conversion rates. “We discovered early on that there is a large pool of exporters who deal in small-ticket transactions, getting a lot of their revenue from global customers, but losing a lot on forex,” notes Srivatsan Sridhar, co-founder of Skydo. As soon as business hours open in the morning in India for forex trade, Skydo converts the inward-remittances into Indian rupees, and transfers the money to the respective exporters’ accounts across India.
Forex-conversion capabilities are a competitive advantage for XFlow. JPMorgan Chase and Citi are among the top banks that move dollars to rupees, with the former being the forex provider to many of the top private banks in India. As a payment-infra fintech for global banks, XFlow allows exporters to lock in forex rates in advance.
This is critical for XFlow customers such as Drip Capital, a short-term working capital provider to Indian exporters, which clocks around $1.5 billion in annual trade transactions. “Banks’ processes led to delays in our customers getting (inward) remittances,” notes Tej Mulgaonkar, head of product and technology, Drip Capital. With a PA-CB, the real difference is in the pricing, he adds. “If exporters ask banks what spread they will get on inward foreign-currency credit, they will quote a spread on a spot rate, but add a certain amount to the mid-market rate, for which there is no explanation,” Mulgaonkar says.
In contrast, Drip Capital found XFlow to be transparent. “When we are initiating a transaction through them, we know exactly what forex rate we are going to get it at. We don’t have to wait till the money reaches India. This is a huge value-add because we have pricing predictability and transparency from the beginning,” Mulgaonkar says.
But the proof of the PA-CB’s pudding is the money hitting the merchant’s bank account in India. This is the third and most critical differentiator PA-CBs are building over large banks in India.
The PA-CBs’ foreign inward remittance process is typically based on creating foreign currency ‘virtual account numbers’ (VAN) for exporters in India. This enables their overseas customers to deposit payments in the VAN in their local currencies and as a local transaction. As RBI-regulated entities, the PA-CBs can use this mechanism as long as they are also compliant with the local laws of the countries they are operating in.
In the US, for example, the money flows from a payer to the virtual account in the same geography using ACH (Automated Clearing House)—the primary system that agencies use for electronic funds transfer—or FedWire. “The domestic payment methods work out to be more cost-effective, faster and easier for US clients to use,” says XFlow’s Balaji.
By geography, the PA-CBs thus aggregate the money locally from different customers in an overseas region, before a single batch of inward payments gets transferred to India.
“We make collections in various international geographies in local currency, and aggregate these funds into a pooled account in each currency. We then make a consolidated wire transfer via SWIFT to our account with our Indian partner bank. Finally, once the payment is converted to Indian rupees, the funds are settled locally in India to the respective merchant accounts,” explains Skydo’s Srivatsan.
The biggest benefit PA-CBs have provided to exporters is visibility throughout the process.
Local PAs cash in
This is where the RBI’s master direction last year has been crucial in boosting competition—there is one overall set of regulations for all non-bank payment aggregators (PA). The directive has also opened the playing field to local PAs such as Razorpay and Cashfree.
“The cross-border market is expanding,” says Akash Sinha, co-founder and chief executive officer (CEO) of Cashfree Payments India, a leading gateway in local payments. “In terms of monetization, the cross-border play is more attractive compared to a local payments partner,” he adds, referring to the high gross margins in the foreign remittances play.
Easebuzz is another fast-growing payment gateway whose cross-border payment rails run on XFlow. It provides the APIs for Easebuzz’s cross-border use cases. “Our immediate strategy is to build a compliance-first payments platform for exporters, particularly MSMEs in e-commerce merchandise and gig workers,” says Parimal Kumar Shivendu, executive director of Easebuzz.
Meanwhile, payment aggregator Razorpay has consciously honed its cross-border product over the last three years. “We have built a real-time dashboard, which gives small merchants in India absolute clarity about the money movement,” says Rahul Kothari, chief operating officer (COO) of Razorpay.
The enhanced competition should nudge India’s largest banks—the OGs of cross-border remittances—to get their act together on the SWIFT network. Else, they risk losing a profitable revenue driver at a time when India’s exports are rising.