Cashfree Becomes First Entity To Get Cross Border PA Licence From RBI

Less than a year after the Reserve Bank of India (RBI) released guidelines to regulate entities facilitating cross-border payments, Bengaluru-based fintech startup Cashfree Payments has become the first entity to secure the Payment Aggregator Cross Border (PA-CB) licence. 

The licence will enable the startup to process cross-border online transactions for the import and export of goods and services. 

It is pertinent to note that there are three types of PA-CB licences – export only PA-CB (PA-CB-E), import only PA-CB (PA-CB-I), and export and import PA-CB (PA-CB-E&I). The startup has received the PA-CB-E&I licence, as per a Business Standard report.

”With the… licence, we are now well-positioned to support global businesses and globally regulated entities collecting payments in India. The licence also enables us to offer Indian exporters and freelancers with cross-border payment solutions. This licence will foster international trade and economic growth while building a robust cross-border payments ecosystem in India,” a spokesperson of the startup said.

Founded in 2015 by Akash Sinha and Reeju Datta, Cashfree operates a full-stack digital payments solution platform. Its net loss widened 46X to INR 133.1 Cr in FY23 from INR 2.9 Cr in the previous year. Operating revenue increased 75.4% to INR 613.8 Cr from INR 349.9 Cr in FY22.

In October last year, the RBI asked all entities processing cross-border transactions for the import and export of goods and services in online mode to get PA licence. It also directed all ‘non-banks’ to apply for authorisation by April 30, 2024.

Startups and other non-banks currently providing such services must register with the Financial Intelligence Unit-India (FIU-IND) to apply for the PA licence. 

Additionally, they are also required to maintain a minimum net worth of INR 15 Cr when applying for the licence. By March 2026, this requirement will increase to INR 25 Cr for authorisation.

Platforms failing to comply with the net-worth requirements will be required to discontinue offering cross-border payment services by July 31, 2024, as per the central bank’s directives.

Besides cross border PA licences, the RBI has granted online payment aggregator licence to a number of entities in recent times. Since December last year, the central bank has greenlit the PA applications of more than 20 companies, including Groww, Zoho, Juspay, Decentro, CRED, PayU, Enkash, Pine Labs, Amazon Pay, Innoviti, Razorpay, CC Avenue, Tata Pay, Google Pay, Infibeam Avenues, Mswipe, Hitachi Financial Services, among others.