The archive · Money & Fintech · Strategic decision · 2020–2025
Cashfree outlasts RBI's 2022 freeze, wins India's first payment-aggregator licences
RBI licensed India's gateways; Cashfree survived a ban, won PA approval in Dec 2023, then added cross-border and PPI licences.
Cashfree Payments
What the business is
India's payments company: checkout APIs, payouts, KYC onboarding and fraud tools for online businesses — 600,000+ merchants and $80+ billion processed a year (per IBS Intelligence, October 2024).
How it started
RBI's payment-aggregator framework brought every Indian gateway under the Payment and Settlement Systems Act (the PA licence was introduced around 2020, per Inc42), requiring in-principle and then final authorisation with net-worth and audit hurdles. Cashfree applied like its rivals — then, in late 2022, the RBI barred Cashfree and Razorpay from onboarding new merchants, freezing both companies' growth at the gate.
What happened
For over a year Cashfree could only serve its existing merchants while it cleared the RBI's requirements — system audits, capital thresholds, governance. The payoff came in December 2023: the RBI granted final Payment Aggregator authorisation to just three companies at once, Razorpay, Cashfree and neobank Open, with Cashfree saying the approval would let it 'drive exponential growth and add new clients'. It then stacked the stack: in July 2024 it became one of the first PSPs to receive the Payment Aggregator-Cross Border licence (import/export payments), and in October 2024 it added the Prepaid Payment Instrument licence for wallet-style products, while also buying UAE payment company Telr to take its licensed model abroad.
How it ended up
Still live and scaling as one of the few Indian gateways holding the full PA + Payment Aggregator-Cross Border + PPI licence stack (as of its October 2024 reporting).
Background
India's RBI decided payment aggregators had to be licensed, bringing gateways under the Payment and Settlement Systems Act with two-stage authorisation. Cashfree, an API-first payments startup, joined the queue. In late 2022, RBI barred Cashfree and Razorpay from onboarding new merchants, freezing two of India's biggest gateways while the market grew without them.
Cashfree treated the freeze as a compliance rebuild: audits, capital, governance. In December 2023, RBI granted final PA authorisation to three companies: Razorpay, Cashfree, and Open. Cashfree called it a licence to grow 'exponentially'. It then added cross-border authorisation in July 2024, a PPI licence in October 2024, and acquired UAE's Telr to go international.
The result is a regulatory moat: only a handful of India's gateways hold the full set of RBI licences, and Cashfree is one, reporting 600,000+ businesses and $80+ billion annual processing. 'RBI-licensed' became a shortlist criterion, turning the stamp into a sales advantage unlicensed competitors cannot replicate.
What has to be true
- The ban forced Cashfree to institutionalise compliance while growth froze, so when RBI's standard opened, survivors were exam-ready.
- Only three gateways got final authorisation at once, making 'RBI-licensed' a shortlist: enterprises could only sign with the licensed few, turning the stamp into a sales credential.
- The licence cascade let Cashfree extend into new products without restarting authorisation, accumulating a regulatory stack competitors had to build from zero.
What can be applied
When a regulator gates your industry, treat the gate as the product: endure freezes, over-invest in compliance, and let your first licence become a trust credential.
Aftermath
As of September 2026 Cashfree continues to run as one of India's few fully-licensed payment aggregators. Its 2023–2024 licence wave remains the cornerstone of its sales story for enterprise merchants, and the model is being exported: the Telr acquisition carried the payments business into the UAE market. The licence stack is now a franchise asset rather than a hurdle — but it is also a supervisor's handle: remaining RBI-authorised means remaining under the regulator's continuous scrutiny, a cost the unlicensed players do not carry.
Sources
- Razorpay, Cashfree, Open Get Final Approval From RBI To Operate As Payment Aggregators
- Cashfree Payments obtains RBI's Prepaid Payment Instrument licence
spotted an error? The archive wants to know.
Your turn
You just read one. Describe what you are building, and see who is betting on the same thing.
Free account · 3 free questions · no card