Home Payment processors Cashfree Payments gets RBI approval for cross-border product

Cashfree Payments gets RBI approval for cross-border product


Cashfree Payments, a leading payments and banking API solutions company, today announced that it has received the green light from the Reserve Bank of India (RBI) for its cross-border payments product.

The approval comes as the company successfully pilots the solution during RBI’s second cohort as part of the cross-border payments regulatory sandbox. The product will allow Indian fintech companies to offer Indian investors the purchase of stocks, exchange-traded fund (ETF) units and other assets listed on foreign stock exchanges via UPI/Net Banking. Cross-border investments will fall under RBI’s Liberalized Remittance Scheme (LRS). In accordance with the RBI, the product may be considered for adoption by regulated entities subject to compliance with applicable regulatory requirements.

One of the most tedious steps for Indians looking to invest in foreign stocks has been funding their overseas accounts. Traditionally, this process requires filling out A2 forms, paying high fixed fees and even going to a bank branch in many cases. Cashree Payments’ solution makes the payment process through UPI, Net Banking and LRS compliance integrated, transparent and fully digital. Investors can start investing with small amounts, as low as INR 1,000. The solution also offers savings on foreign exchange (FX) fees and faster settlements for accessing funds.

With this model, investors will be able to simply log into an application integrated with Cashfree Payments, complete their basic KYC to start transferring in Indian currency (INR). The company will then convert this transferred amount into foreign currency, such as USD, and remit it to the foreign broker, allowing investors to successfully purchase international stocks.

While US equities, mostly from big tech and pharma companies, are most popular with Indian investors, Cashfree Payments works with several Indian fintech platforms looking to offer cross-border investing as a feature.

Reeju Datta, Co-Founder of Cashfree Payments, said, “We are delighted to have successfully completed the testing phase of RBI’s second cohort as part of the Cross-Border Payments Regulatory Sandbox. This achievement validates our efforts to constantly build innovative and efficient solutions in the payments ecosystem. Our cross-border payments platform aims to make investing in foreign stocks much easier and more convenient, allowing retail investors to make payments via local payment methods. The product was evaluated on various parameters, and the approval of the evaluation further reiterates the resilience and agility that are a hallmark of Cashfree Payments systems. We look forward to working with the Indian fintech ecosystem and providing access to international investments for Indian investors.

In September 2021, eight entities, including Cashfree Payments, were selected for the testing phase of RBI’s second cohort. The Cashfree Payments proposal was evaluated based on mutually agreed test scenarios and expected results on several metrics, such as innovation in cross-border payments, ability to transform the cross-border payments landscape and leveraging technology to deliver a cost effective, secure and transparent system. With the announcement of the release of the second cohort, the product was found to be viable under the boundary conditions defined during the tests within the framework of the Regulatory Sandbox.

With over 50% market share among payment processors, Cashfree Payments is now leading the way in bulk disbursements in India with its Payouts product. Recently, India’s largest lender, SBI, invested in Cashfree Payments, underscoring the company’s role in building a robust payment ecosystem. Cashfree Payments works closely with all major banks to build the core payment and banking infrastructure that powers their products and is also integrated with major platforms such as Shopify, Wix, Paypal, Amazon Pay, Paytm and Google Pay. Besides India, Cashfree Payments products are used in eight other countries, including the United States, Canada and the United Arab Emirates.