Cashfree pilots cross-border payments with Swiggy, Nykaa, others
11 Nov 2024, 04:37 PMThe Bengaluru-based company is "piloting with half a dozen sizable merchants that will be over by the end of this year."
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Payment aggregator firm Cashfree is reportedly piloting cross-border payments with select merchants. It was the first company to receive the cross-border payments licence from the Reserve Bank of India.
The Bengaluru-based company is "piloting with half a dozen sizable merchants that will be over by the end of this year," Economic Times quoted Cashfree CEO Akash Sinha as saying.
Swiggy, Nykaa, Bookmyshow, Redbus, Zepto, Nature's Basket, and Vedantu are working with Cashfree Payments to tap international customers.
Last year in October, RBI announced the licensing regime for online payment companies, which enables cross-border payments. Cross-border payments are financial transactions where the payer and the recipient are based in separate countries. The cross-border PA rule will apply to payment companies, which processes payments and does settlement for their clients based outside of India.
The payment aggregator license for cross-border payments, for both imports and exports, allows them to facilitate Indian as well as global businesses to make and collect payments.
Cashfree is piloting with both import and export related merchants.
The biggest beneficiaries will be users who solely transact using the RuPay credit and debit card platforms and the UPI systems which are not recognised for international purchases. "If you are SaaS customer and the services range above $10,000- $20,000, you can't ask your customer to make payments through credit cards because of the charges involved, we give these merchants an account and money can be collected seamlessly," Sinha told ET.
In December 2023, the Bengaluru-based fintech got the payment aggregators license from the RBI. The Reserve Bank India had then lifted a ban on payment aggregators Razorpay and Cashfree after almost a year.
In 2022, the central bank asked Razorpay, Cashfree, PayU, and Paytm, which hold in-principal approvals for payment aggregator licence, to stop on-boarding new merchants till they get the final licence.
Other than Cashfree, companies which have recieved cross-border PA licence are BillDesk, Amazon Pay, and Adyen.
As reported in the Economic Survey 2023-24, remittances to freelancers and software service companies will grow by 4%, reaching $129 billion by 2025. This marks as a great opportunity for fintechs to cater cross border payments.
Earlier, payment companies processing cross-border payments operated under Online Payment Gateway Service Providers (OPGSP) guidelines – which was issued in September 2015. Under OPGSP rule, for processing such transactions and taking the money out of the country for settlement required the RBI approval on case-to-case basis.
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