India's Cross-Border Payments Revolution Begins
The landscape of India's cross-border payments is undergoing a dramatic transformation, fueled by the Reserve Bank of India's groundbreaking Payment Aggregator-Cross Border (PA-CB) license introduced a year ago. Fintech startups including BriskPe, Xflow, and Skydo are building regulated digital pipelines to streamline the massive flow of export and import transactions, attracting significant investor interest in the process.
Regulatory Shift Unlocks $1.6 Trillion Market
India's cross-border market represents an enormous opportunity, with 2023 exports totaling approximately $770-800 billion and imports reaching roughly $918 billion. According to industry founders and analysts, fintech intermediaries could capture 15-20% of India's estimated $1.6 trillion cross-border flows within five years, a substantial increase from the low single-digit percentages they handle today.
The regulatory overhaul began in October 2023 when RBI replaced the outdated OPGSP (Online Payment Gateway Service Providers) framework with the more comprehensive PA-CB regime. This shift came after the Delhi High Court ruled in July 2023 that platforms like PayPal Payments were effectively operating payment systems requiring proper licensing and anti-money laundering compliance.
The new framework significantly raised transaction limits to ₹25 lakh per transaction and mandated a net worth requirement of ₹15 crore, which will increase to ₹25 crore over three years. By 2025, these norms were consolidated into unified payment aggregator directions covering online, offline, and cross-border transactions under a single rulebook.
Investors Back New Generation of Payment Specialists
The growth potential has triggered a funding rush among venture capitalists and global investors. BriskPe has raised approximately $5 million in seed funding from PayU and other backers, with the company currently in discussions for a larger funding round that's attracting particular interest from international and Asia-Pacific investors.
Meanwhile, Bengaluru-based Skydo is in early talks to raise $15-20 million from domestic and global venture capital funds, while Xflow is discussing a potential $10-15 million round with existing and new international investors. Several established payment giants including Cashfree Payments, Razorpay, and PayU have also secured or applied for PA-CB approvals, creating a competitive but rapidly expanding ecosystem of regulated entities.
Movin Jain, co-founder of Skydo, explained that investors now view cross-border payments as "a market with massive global potential" due to clearer regulations and higher entry barriers under the PA-CB regime. He noted that over 60% of Skydo's volume comes from services exporters and freelancers, with demand accelerating due to AI-driven outsourcing and global remote work trends.
MSME Exporters Stand to Benefit Most
The reforms particularly benefit India's micro, small, and medium enterprises (MSMEs), which account for approximately 45-50% of exports by value. As the government targets combined goods and services exports of around $2 trillion over the medium term, MSMEs could contribute close to $1 trillion of export flows requiring more efficient payment rails.
Indunath Chaudhary, co-founder of BriskPe, highlighted that "fintechs and PA-CB-licensed intermediaries can realistically capture about a fifth of that MSME opportunity over time." The previous OPGSP model had created significant challenges for small businesses, including low transaction limits of $10,000 for exports and $2,000 for imports, heavy paperwork, and inconsistent bank interpretations that caused delays and documentation issues.
Vivek Ramji Iyer, partner and national leader for financial services at Grant Thornton Bharat, observed that "banks have not moved fast enough to re-engineer end-to-end documentation and workflows for exporters and importers," creating the perfect conditions for fintech disruption in the cross-border payments space.
Import Payments Remain the Next Frontier
While the initial opportunity focuses heavily on export receipts, founders and analysts identify import payments as the next growth frontier. The current PA-CB framework is explicitly designed around facilitating export proceeds, with tighter conditions around imports that constrain how much of the import journey payment platforms can control.
Anand Balaji, co-founder of Xflow, described his company's business as "mainly export-led" despite clear demand from Indian companies seeking to pay foreign suppliers more efficiently. He explained that current rules typically allow onboarding of overseas merchants or marketplaces rather than Indian buyers, limiting platform control over import transactions.
Chaudhary of BriskPe suggested that imports could be opened up in a phased manner, similar to how fintechs handle payments under the liberalized remittance scheme, potentially unlocking significant additional value in India's cross-border payments ecosystem.
