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Why “just enabling Visa and Mastercard” doesn’t work for India

If you’re seeing traffic, sign-ups and intent from India but transactions failing at checkout, the problem usually isn’t pricing — its payment compatibility. India runs on local rails that international card processing alone doesn’t reach:

• UPI is the default way most Indians pay online (real-time bank-to-bank via PhonePe, Google Pay, Paytm). For many buyers it’s the only method they use — no UPI at checkout means you lose them.

• RuPay is India’s domestic card network, with hundreds of millions of cards in circulation. A Visa/Mastercard-only checkout silently excludes a large slice of buyers.

• RBI authentication (AFA/OTP) adds an extra step to Indian card payments. Foreign checkouts not optimised for these flows see materially higher decline rates — a big part of why “Indian cards keep failing on my site.”

So the real requirement isn’t a card processor — it’s a payment stack connected to India’s domestic payment ecosystem.

You no longer need an Indian entity: the two routes

There are two compliant ways for a foreign business to collect INR from Indian customers.

Since 2023, the RBI’s PA-CB framework (now consolidated under the RBI Regulation of Payment Aggregators Directions, 2025) lets RBI-licensed providers onboard foreign merchants directly under FEMA. You stay incorporated wherever you are; the licensed provider handles the India-side regulation and infrastructure.

How the money actually moves (and the one limit to know)

Under the PA-CB model the settlement chain is regulated end-to-end:

1. Your Indian customer pays in INR via UPI, RuPay, Visa/Mastercard, or Net Banking.

2. The RBI-licensed PA-CB provider captures the transaction and routes funds into an Inward Collection Account (InCA) held at an Authorized Dealer Category-I (AD-I) bank.

3. The AD-I bank performs the FX conversion.

4. The converted amount is remitted to your overseas bank account (USD, EUR, GBP, SGD, AED, etc.), typically on a T+1 basis.

Gateways and providers that support this

A few names that handle cross-border collection from India. They fall into two models — pick based on whether you want to remain the merchant (PA-CB gateway) or offload tax/compliance entirely (Merchant of Record).

PA-CB-licensed payment gateways – you stay the merchant; the provider runs the regulated rails:

• Cashfree Payments: The first non-bank entity to receive the RBI’s PA-CB licence (July 2024), authorized for both export and import (the broadest PA-CB-E&I category). Foreign merchants collect via UPI, RuPay, cards and Net Banking and settle to an overseas account in USD/EUR/GBP/SGD/AED. No Indian entity, bank account or GST required; onboarding to go-live in ~48 hours; e-FIRC for every settlement; FX at interbank rates (Cashfree states it adds no FX markup for overseas businesses).

• CCAvenue: established Indian gateways with UPI/RuPay coverage; confirm their current cross-border onboarding model for foreign-registered entities.

Merchant-of-Record (MoR) providers : the MoR becomes the seller of record and handles GST/tax for you (well suited to SaaS, digital goods and gaming):

• Tazapay, Transact Bridge: Collect UPI/RuPay/cards from India and remit globally, while taking on local tax obligations.

A note on Stripe / PayPal: Stripe does support UPI in India, but onboarding for new India-facing businesses remains restrictive and typically expects an Indian GST setup, which defeats the “no local entity” goal. PayPal doesn’t give Indian buyers native UPI. For a foreign entity that specifically wants UPI without incorporating, a PA-CB gateway or MoR is the cleaner path.

Quick comparison

How to choose

Run any provider against this checklist:

1. Does it actually hold a current RBI PA-CB licence (or operate a compliant MoR)?

2. UPI and RuPay coverage, not just international cards.

3. FX transparency – interbank rate, or a 1- 4% markup hidden in the rate?

4. e-FIRC included for every settlement (needed for compliance/accounting).

5. Settlement currencies and speed that match your bank.

6. The ₹25 lakh per-unit cap – fine for most, a blocker for high-ticket B2B.

7. Onboarding time – 48 hours vs. months if you’re testing the market.

Getting started (PA-CB route)

Typical documents to onboard as a foreign merchant:

• Business registration certificate from your home country

• Proof of business address

• Director / authorized-signatory ID (passport or national ID)

• Overseas bank account details for settlement

• Website or app URL with a clear product/service description

Then choose an integration that fits your stack, no-code payment links/pages, e-commerce plugins (Shopify, Magento), or REST APIs for a fully custom checkout including UPI app launch and UPI mandates test in sandbox, and go live.

FAQ

Can a foreign company accept UPI without an Indian entity?

Yes. Partner with an RBI-authorized PA-CB provider (or an MoR). You collect in INR via UPI/RuPay/cards and settle to your overseas account in your currency no Indian incorporation required.

Do I need GST registration?

Not to collect via PA-CB. But GST or other tax may still apply depending on what you sell and your operating model. Consult a tax advisor (or use an MoR that handles it).

Do I need an Indian bank account?

No. Funds are collected in INR and settled directly to your overseas bank account.

Is there a transaction limit?

Yes — ₹25,00,000 worth of goods/services for inward cross-border payments under the 2025 PA Directions.

Media Contact
Company Name: Cashfree
Contact Person: Rahul
Email: Send Email
City: Mumbai
Country: India
Website: https://www.cashfree.com/