PayPal Payments (PayPal), the Indian subsidiary of PayPal Holdings, has received in-principle approval from the Reserve Bank of India (RBI) to operate as a cross-border payment aggregator, according to reports.

Another fintech firm, Worldline ePayments India, revealed that the central bank has granted its license to function as a cross-border PA under the Payment and Settlement Systems Act, 2007.

This approval allows the companies to support international online transactions for the importation and exportation of goods and services.

PayPal stated that this creates new opportunities for localized product innovations and better customer experiences, as well as improved access to PayPal’s worldwide payment network for major enterprises, small businesses, and freelancers in India.

In October of the previous year, the RBI instructed payment aggregators providing cross-border payments to obtain distinct authorization. Before that, for nearly ten years, payment companies have been functioning in this area with the Online Payment Gateway Service Provider, or OPGSP, license.

The cross-border payment sector presents a significant opportunity in India, considering the substantial volume of remittances received by the country each year. India is also a center for freelancers and software service firms, serving numerous companies globally. Currently, non-bank payment firms are able to assist these businesses.

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As per RBI regulations, organizations functioning as PA-CB must comply with stringent rules regarding customer due diligence, foreign exchange rules, and settlement deadlines. In 2021, the regulator established the PA-CB framework to formalize and oversee digital cross-border payment transactions.