Cross-border payments gain momentum amid RBI push, exporter and freelancer demand

The Reserve Bank of India has begun granting final authorisations to multiple payment aggregators to operate in the cross-border payments space, a move aimed at improving speed, transparency and costs for users.

The regulatory push comes as freelancers, consultants and small exporters continue to face delays, manual intervention and high forex charges when receiving overseas payments, despite India’s otherwise seamless domestic digital payments infrastructure.

Delays and high forex charges

For Samarth Dwivedi (name changed), a freelance consultant working with large US technology companies, cross-border payments remain far from frictionless. When a client sent dollars on a Friday, the funds did not reflect in his account until Monday, after he followed up with his bank. Weekends and holidays routinely stretch settlement timelines. Costs add to the frustration.

“This happens every time, and not to mention the high forex charges and commissions that people are forced to pay, often ranging from 5 percent to 8 percent in the case of some international payment firms,” Dwivedi said.

Platforms such as PayPal continue to see adoption despite charging 7–10 percent per transaction, largely due to their perceived lower chargeback risk and established global acceptance. But for freelancers and small exporters, these fees directly erode margins.

Why RBI is opening up cross-border payments

Banks have long dominated cross-border payments through correspondent banking networks. While reliable, these systems involve paperwork-heavy processes, unfavourable exchange rates and slow clearing cycles. According to Nitesh Singhal, cofounder of Aryaa Advisors and former head of digital payments at Axis Bank, innovation has lagged.

“Banks have traditionally dominated cross-border payments, but the space has seen limited innovation, in part due to their risk-averse operating models,” Singhal said. “Newly licensed payment aggregator cross-border entities are expected to improve these outcomes by using technology to offer faster, more transparent and cost-efficient payment experiences.”

India’s inward remittances exceed $120 billion annually, with outward remittances at around $25 billion. Services exports, including IT, consulting and digital services, have overtaken goods exports, making cross-border collections a growing policy focus.

Incumbents move deeper into global money movement

Large payment gateway players are positioning themselves to capture this shift. Razorpay, which recently received its PA-CB licence, said the approval strengthens its ability to serve businesses operating across borders.

“A growing number of Indian businesses today are being built for global customers from day one, just as a rising wave of global companies are choosing India as one of their most important growth markets,” said Shashank Kumar, managing director and cofounder of Razorpay.  “What these businesses need are financial rails that make it just as easy to serve a customer in New York or Singapore as it is in Mumbai.”

He added that the licence reinforces Razorpay’s focus on compliance and partnerships with banks and regulators, while simplifying cross-border payments for exporters, SaaS firms, freelancers and global companies entering India.

Cashfree Payments has also scaled up its cross-border push. The company said its cross-border payment volumes grew 250 percent year-on-year, now contributing more than 10 percent of revenue, with expectations of rising to 30 percent next year.

“Exports, especially services exports, are growing and are a focus area for policymakers,” said Reeju Datta, cofounder of Cashfree to Moneycontrol. “We are seeing merchants not just from tier-one cities but from Surat, Jaipur, Tirupur and Kochi selling globally and accepting payments in over 140 currencies.”

Newer players bet on SMBs and freelancers

While incumbents bring scale, newer players are betting on underserved segments. Skydo, a cross-border payments startup focused on freelancers and small businesses, said the market remains largely untapped.

“The total market share of all fintechs together in B2B cross-border payments in India is less than 1 percent,” said Movin Jain, founder of Skydo.

“Ninety-nine percent of the market still sits with traditional wire transfers and banks. The competition is not with each other, it’s with legacy systems.”

Skydo said its revenue grew four times over the past year, with ambitions to process $5 billion in annualised cross-border payment volume over the next two years. The company is also expanding into the US, initially focusing on outward payments for startups paying global vendors and contractors.

High margins, higher compliance

Cross-border payments offer significantly higher margins than domestic transactions, making them attractive for payment firms struggling with thin pricing at home. However, they also come with heavier compliance burdens under FEMA, PMLA and RBI guidelines.

“Compliance will always be part of cross-border payments,” said Datta of Cashfree said. “The challenge is to innovate within that framework, ensuring fast onboarding and high success rates without compromising regulatory requirements.”

Industry executives say automated KYC, risk monitoring and better integrations now allow merchants to start accepting international payments within minutes, even under tighter scrutiny.

A long road to UPI-like simplicity

For users, the RBI’s licensing push signals the beginning of change rather than an overnight transformation. Payment firms are betting that increased competition, regulatory clarity and technology-led processes will gradually reduce costs and delays.

The regulator’s expectation is clear, licensed fintechs should deliver a cross-border experience closer to what Indian users already enjoy domestically.

“Over the last few months, the Reserve Bank of India (RBI) has granted final authorisation to multiple large payment aggregators to operate in the cross-border payments space,” Singhal of Aryaa Advisors said.

While the PA-CB licence is open to all eligible entities, the RBI has made it relatively easier for existing payment aggregator and payment gateway (PA/PG) players to expand into cross-border payments, given their existing regulatory approvals, compliance track record, and operational readiness,” added Singhal.