Indian Fintech Expansion

Indian fintech companies are actively pursuing licenses in rapidly growing markets worldwide to extend their digital payments infrastructure beyond existing cross-border businesses. By establishing operations in regions like North America, West Asia, and South-East Asia, these companies aim to create a multi-country footprint, a strategy used by global giants such as Stripe and PayPal.

Skydo's Expansion

• Skydo has obtained a payments license in Canada, marking its first licensed market outside India.
• The company plans to facilitate business-to-business (B2B) payments in Canada and enable two-way payment flows between Canada and India.

Licensing Strategy

Indian fintechs like Razorpay, Cashfree Payments, Skydo, XFlow, BriskPe, etc., have acquired RBI’s payment aggregator-cross border (PA-CB) licenses. They are also exploring licenses in other countries.

• XFlow holds a PA license in India, a Canadian license, and a Money Service Business (MSB) registration in the US.
• Potential expansion is considered in countries like Singapore, Dubai, Ireland, and Hong Kong due to large Total Addressable Markets (TAMs).

Challenges and Opportunities

• Initial efforts focused on developing cross-border products before seeking global market expansion for better monetization.
• Indian fintechs face stiff competition from established local companies in international markets.
• Expansion, particularly into North America, significantly increases potential market size.

Regulatory and Financial Considerations

• Internationalization requires creating separate entities to navigate compliance with different regulations.
• Licensing in developed markets like Singapore and the US is time-consuming and costly, posing challenges for early-stage companies focused on India.
• Operationalizing and maintaining a license requires significant investment.