Indian Payment Aggregators Rush to Obtain International Payment Licences

Domestic payment aggregators like Razorpay and Cashfree, along with newer fintech firms such as PayGlocal and Skydo, are hurrying to secure licences to offer international payment services, according to sources familiar with the matter.

To offer cross-border payment services, both existing players and new entrants must apply to the Reserve Bank of India (RBI) for a payment aggregator-cross border (PA-CB) licence by April 30.

Experts estimate profit margins on international card transactions to be between 2.5% and 4%, compared to 1% in India. Obtaining these licences will not only intensify competition but also justify the high valuations of local startups. The average size of B2B cross-border payments is around $5,000.

The market for big-ticket cross-border merchant payments presents a significant opportunity, with the volume of international consumer payments also increasing steadily.

“Razorpay is developing a solution for cross-border business payments,” said a senior industry executive. “They (Razorpay) eventually aim to expand from cross-border consumer payments to large vendor payments for account-based fund transfers,” the executive added. Razorpay, headquartered in Bengaluru and supported by investors like Peak XV Partners and Tiger Global, is one of the largest online merchant payment processors in the country.