Cashfree Payments eyes profitability as it focuses on $250-300 million monthly in cross-border payments

"We're trying to create the market, given that the payment aggregator-cross border (PA-CB) guidelines are so new. We are signing up customers but they're also adapting to the new regime," Cashfree co-founder and chief executive officer Akash Sinha told Mint in an interview. 

The Reserve Bank of India issued the PA-CB guidelines in October to facilitate payments for the import and export of goods and services. The RBI gave Cashfree a PA-CB licence in July 2024. 

Cashfree’s focus this year is on building its cross-border payments vertical for which it will use the $53 million raised from South Korean gaming giant Krafton and Apis Partners in February. 

Cashfree said it’s currently in the pilot stage with a few merchants while some of its larger clients have already integrated cross-border payments into their ecosystems and are waiting to go live. The company is targeting businesses that expect 5% to 10% of their revenue from the Indian market.

Also Read | Cashfree to expand cross-border payments after $53 mn funding

Only three other companies have a PA-CB license: Amazon Pay, BillDesk, and Adyen India. Skydo Technologies received in-principle authorisation to operate as a PA-CB licence holder.

Globally, the cross-border payments market, in both wholesale and retail, had a total addressable market of $194.6 trillion in 2024, according to FXC Intelligence, a data intelligence firm. The market is expected to grow to $320 trillion by 2032.

Building a market

While Cashfree hasn't identified any segments that could turn out to be growth drivers for cross-border payments, the company views retail, the services market, travel and education as those with a lot of traction.

“Basically, larger B2C businesses. Industries like travel are big for Indian consumers, who are using international travel apps and websites. Education is a big one, people are buying courses," Sinha said.

But the regulatory landscape is vast. Narrow it down to specific sectors and there are other requirements to be mindful of such as deduction of tax collected at source on remittances towards education expenses.

“Companies processing cross-border payments will also need to ensure their cross-border payment leg aligns with RBI’s payment aggregator-cross-border norms, which could trigger additional licensing requirements," said Probir Roy Chowdhury, a partner at JSA Advocates & Solicitors.

Cashfree intends to leverage the strength of the India-US corridor. But entry into the country will be tough with several companies in that market including Stripe, Wise, Rapyd, WorldRemit and Remitly. That's not even taking into account a giant like PayPal.

“The US already has a bunch of buy-now-pay-later options. They have a bunch of EMI-related options. We need to make our offerings attractive to US customers because we're not just competing with Indian brands, we're also competing with a bunch of brands in that geography," the Cashfree founder said.

Also Read | For Razorpay, Cashfree and others, RBI presents a new headache

The company is currently working on helping Indian brands that have tied up with Cashfree to earn trust with US customers by providing them an “at par" experience.

“We're working on finding partnerships with the right payments providers in the US, bringing more payment partners on to the platform which are US-based and help Indian brands who can use them as partners," said Sinha. “The integrations are not very straightforward, so that's what we're working on and making sure Indian brands are competitive on a global scale."

Trust factor

While fintechs might be innovating to provide seamless experiences to merchants, buyers and exporters, trust continues to be in a deficit. Bringing different stakeholders on board means simplifying processes while also providing clarity on different parts of the value chain.

In a bid to make Cashfree more competitive abroad, Sinha said the company is trying to bring parity with what US brands provide their customers. However, the real challenge, according to the company, is building trust in a system that is new. 

“Trust, I think, is the biggest blocker. Customers could feel like they've made a payment but what if a merchant doesn't deliver, what happens to their payment?" asked Sinha. 

It's something Cashfree has been seeing since it started cross-border payments.

Also Read | Is EPF advisory the next fintech goldmine?

“Indian fintechs will need to actively liaise and form partnerships with foreign payment aggregators to offer seamless local processing capabilities. Providing more customised solutions and integrations with offshore processors will help them scale in the long-term," according to Prashant Ramdas, a partner at corporate law firm Khaitan & Co.   

Profitability

The company is on track to becoming profitable in August-September in FY26, according to Sinha.

“We're 100% going to be profitable this year. We're very close and we don't have to wait for months. We'll be there somewhere in Q2 of this fiscal." 

Mint previously reported that the company was targeting profitability in Q1 of FY25. However, the company said it delayed that target as it made several investments and spent more on research and development. The company said its revenue numbers will showcase double-digit growth in FY25.

“Growth won't happen if we don't invest in areas which will pay us revenue in two to three years. It's why we chose to continue to invest in the business in FY25 itself," Sinha said.