PayPal gets RBI nod for cross-border transfers—Who benefits and how
What's the story
PayPal Payments (PayPal), the Indian arm of PayPal Holdings, has received in-principle approval from the Reserve Bank of India (RBI) to operate as a cross-border payment aggregator.
The news was confirmed by the company in an official statement.
Another fintech firm, Worldline ePayments India, also announced that it has received RBI's approval to operate under the Payment and Settlement Systems Act, 2007.
Regulatory shift
RBI's approval paves way for cross-border transactions
The RBI's approval allows PayPal and Worldline to facilitate cross-border online transactions for importing and exporting goods and services.
This comes after the central bank mandated payment aggregators providing cross-border payments to obtain separate approvals in October last year.
Prior to this, payment companies had been operating with an Online Payment Gateway Service Provider (OPGSP) license for nearly a decade.
Market potential
Cross-border payment sector presents major opportunity in India
The cross-border payment sector is a huge opportunity in India, given the massive remittance inflow into the country every year.
India is also a hub for freelancers and software service companies catering to businesses worldwide.
The RBI's approval now allows non-bank payment companies like PayPal and Worldline to serve these businesses directly.