RBI gives nod to four firms for cross-border payments

The Reserve Bank of India (RBI) gave the go-ahead to Open, Cashfree Payments, PayNearby & Fairexpay, providers of payments and API banking solutions, for its cross-border payments offering. The reserve bank chose four of the eight entities that were a part of the Test Phase.

All of these entities completed the ‘Test Phase’ of the second cohort. According to the RBI, these entities can now provide their cross-border payment solutions to regulated entities such as banks and NBFCs.

RBI said, “The products were evaluated based on mutually agreed test scenarios and expected outcomes. All the above four products have been found viable within the boundary conditions defined during testing under the Regulatory Sandbox.”

The release read, “The aforesaid entities have now exited the Second Cohort of the Regulatory Sandbox on ‘Cross-Border Payments’. The products found acceptable under this Cohort may be considered for adoption by Regulated Entities subject to compliance with applicable regulatory requirements.”

RBI has introduced three cohorts to develop fintech solutions. The first cohort under the Regulatory Sandbox was around the theme of retail payments and was first launched in November 2019. The cohort received applications from 32 entities of which six were selected for the ‘Test Phase’.

Some of the entities that were approved in the first cohort include ToneTag, PaySe, Citycash and BHIM Voice, among others. The latest RBI cohort to close was launched in December 2020. The second cohort under the Regulatory Sandbox for cross-border payments received 27 applications from 26 entities.

The third cohort for MSME Lending is already underway from the central bank. The cohort was announced in September 2021 and received 22 applications. The ‘Test Phase’ for the same started in June 2022 and includes eight entities.