Fintechs turn fund magnets with cross-border licensing

Funders see growth prospects in central bank's payment aggregator-cross border licensing

- Salman S. H.

Fintechs, such as BriskPe, Xflow, and Skydo, are building regulated pipes for export and import flows since RBI introduced the cross-border payments licence.

(BLOOMBERG)

India's cross-border payments space, long constrained by clunky bank processes and SWIFT rails, is being rewired. A year after the Reserve Bank of India (RBI) introduced its payment aggregator-cross border (PA-CB) licence, fintechs such as BriskPe, Xflow and Skydo are building regulated pipes for export and import flows. And their growth prospects have funders lining up fresh capital to grow that business.

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 got or applied for PA-CB approvals, a parallel cohort of specialist startups backed by venture capitalists and even global firms such as Stripe are emerging as newer players.