RBI’s cross-border bet: Why payment aggregators are lining up for a licence

India’s central bank has a new darling: cross-border fintechs.

Towards the end of July, the Reserve Bank of India (RBI) started doling out Payment Aggregator Cross-Border (PA-CB) licences to fintech companies. Bengaluru-based Cashfree Payments was the first to secure one, followed by Amazon Pay, Adyen (a Dutch payments major slated to launch in India soon), and BillDesk. All within the span of a week.

These entities, like any cross-border fintechs, facilitate online payments in multiple currencies across international territories and are compliant with the local jurisdictions and regulators of these countries. The PA-CB licence now enables them to extend their existing solutions to Indian exporters, small merchants, e-commerce sellers, freelancers, software service providers, legal counsels, accounting firms, digital marketers, and so on. These small businesses can now accept payments in multiple foreign currencies seamlessly. At the same time, global sellers and marketplaces can also accept payments locally in Indian rupees from customers here.

The RBI first invited PA-CB applications from non-bank payment aggregators in December 2023 and set April 30, 2024, as a deadline. Applicants were required to show Rs 15 crore in business net worth at the time of application, and Rs 25 crore net worth by March 31, 2026. Securing the licence would allow these fintechs to not only expand their businesses globally and tap into all-new customer segments but also make them a part of India's thriving export economy–worth $750 billion now and estimated to reach $2 trillion by 2030, according to data from the Ministry of Commerce.

The cross-border payments sector, meanwhile, is projected to reach $65 billion domestically by 2030, per an estimate from PwC.