RBI Grants In-Principle Approval to PayPal and Worldline for Cross-Border Payment Aggregation

In a major development for India’s fintech and digital payments landscape, the Reserve Bank of India (RBI) has granted in-principle approval to PayPal Payments and Worldline ePayments India to operate as cross-border payment aggregators (PAs) under the Payment and Settlement Systems Act, 2007. This move is set to boost India’s position in global trade and freelance payments by enabling smoother online cross-border transactions.

Why in News?

The RBI’s recent approval marks a significant shift in the regulation of cross-border payment services. Previously, these services were operating under the Online Payment Gateway Service Provider (OPGSP) framework. However, in October 2024, the RBI mandated that all cross-border PAs must seek separate authorization. PayPal and Worldline are among the first to receive this crucial in-principle nod.

Key Highlights

Regulatory Approval: RBI granted in-principle approval to:
PayPal Payments Pvt Ltd (India arm of US-based PayPal Holdings)
Worldline ePayments India (part of France-based Worldline Group)
Authorization Under: Payment and Settlement Systems Act, 2007
Previous Regime: Companies operated using OPGSP licence for nearly a decade.

Background & Objectives

October 2024 Directive: RBI required all non-bank cross-border PAs to obtain separate authorization.
Need for Regulation: The aim is to bring transparency, accountability, and security in cross-border digital payments.

Target Users,

Freelancers
SMEs and Startups
Exporters of software and services
Import-export merchants

Strategic Importance

India – World’s Top Remittance Recipient:
Received over $125 billion in remittances in 2023.
Global Outreach: Enables Indian businesses to leverage PayPal’s international network.
Boost to Digital Trade: Enhances India’s capabilities in cross-border e-commerce and B2B transactions.

Summary/Static	Details
Why in the news?	RBI Grants In-Principle Approval to PayPal and Worldline for Cross-Border Payment Aggregation
Law Involved	Payment and Settlement Systems Act, 2007
Reason for Approval	To regulate and secure cross-border online payments
Target Beneficiaries	Freelancers, small businesses, exporters, importers
Previous Framework	Online Payment Gateway Service Provider (OPGSP) Licence