What Is a Cross-Border Payment Aggregator (PA-CB)?
A Cross-Border Payment Aggregator, or PA-CB, is a non-bank entity that the Reserve Bank of India (RBI) has specifically authorised to process online payments for the import and export of goods and services between an Indian merchant and an overseas customer. It sits in the payment chain between an e-commerce buyer or seller abroad and the Indian party's bank account, collecting, converting, and remitting the funds while reconciling the transaction against India's foreign-exchange reporting systems.
The RBI's own description of the activity, from the circular that first regulated it, is direct: "PAs-CB are entities that facilitate cross-border payment transactions for import and export of permissible goods and services in online mode." A PA-CB cannot itself decide what is permissible to import or export — that is governed separately by India's foreign trade policy — but it is the licensed gatekeeper for the payment leg of that transaction.
Legal Basis
The Framework That Created PA-CB — Circular of 31 October 2023 (Now Superseded)
PA-CB was first regulated as a distinct category by the RBI circular RBI/2023-24/80, CO.DPSS.POLC.No.S-786/02-14-008/2023-24, dated October 31, 2023, on the "Regulation of Payment Aggregator – Cross Border (PA-CB)." It was issued under Section 10(2) read with Section 18 of the Payment and Settlement Systems Act, 2007. That circular created three authorisation categories, in its own words: "Export only PA-CB (PA-CB-E)", "Import only PA-CB (PA-CB-I)", and "Export and Import PA-CB (PA-CB-E&I)." Non-bank entities already carrying on this business had to apply to the RBI for authorisation by April 30, 2024, and the circular required a "minimum networth of ₹15 crore at the time of submitting application to the RBI for authorisation and a minimum networth of ₹25 crore by March 31, 2026" for existing players, or, for new entrants, ₹15 crore at application and ₹25 crore "by end of the third financial year." It also fixed the per-unit transaction ceiling at "₹25,00,000" and required extra buyer due diligence whenever a single imported item exceeded ₹2,50,000 in value.
The Law in Force Today — Master Direction of 15 September 2025
The RBI has since consolidated payment aggregator regulation into a single instrument: the Master Direction on Regulation of Payment Aggregator (PA), RBI/DPSS/2025-26/141, CO.DPSS.POLC.No.S-633/02-14-008/2025-26, dated September 15, 2025, issued "in exercise of the powers conferred by Section 18 read with Section 10(2) of the Payment and Settlement Systems Act, 2007 (51 of 2007), and Section 10(4) and Section 11(1) of the Foreign Exchange Management Act (FEMA), 1999 (42 of 1999)." This Master Direction expressly repeals the October 2023 PA-CB circular, along with the earlier domestic Payment Aggregator circulars, and brings online PA, physical (point-of-sale) PA, and cross-border PA under one set of rules. It took effect immediately on issue. One narrow carve-out survives: the repeal does not reach an existing PA-CB that had applied for authorisation on or before April 30, 2024 and whose application is still pending with the RBI.
Under the Master Direction, the export/import terminology is retired in favour of transaction direction: a PA-CB now handles an "inward transaction" (broadly, export proceeds coming into India) or an "outward transaction" (import payments leaving India), and an entity may be authorised for either or both. The net worth ladder is unchanged in substance — "a minimum net-worth of ₹15 crore at the time of tendering application for authorisation; and shall attain a minimum net-worth of ₹25 crore by the end of third financial year of grant of authorisation." The ₹25 lakh figure also carries forward, though its basis has shifted — the 2023 circular capped the value "per unit of goods / services sold / purchased", while the Master Direction caps the transaction itself: "In respect of inward or outward transactions processed by a PA-CB, the maximum value per transaction shall be ₹25 lakh."
Fund Segregation, Escrow Accounts, and the AD Bank Relationship
A PA-CB is a fund-handling intermediary, so the Master Direction is strict about where the money sits. It requires: "A non-bank PA shall maintain the funds collected on behalf of its merchants in a separate escrow account with any Scheduled Commercial Bank (SCB) in India. In case of a PA-CB, such account shall also be referred to as Inward Collection Account (InCA) for inward transactions and Outward Collection Account (OCA) for outward transactions." Both the InCA and the OCA must be held with an Authorised Dealer Category-I scheduled commercial bank, not any ordinary bank — because moving money across the border is a foreign-exchange transaction under FEMA, not merely a domestic payments matter. The Master Direction puts the FEMA duty on the bank in general terms — "AD-I banks maintaining Inward Collection Accounts (InCAs) / Outward Collection Accounts (OCAs) ... shall ensure that all requirements under FEMA are adhered to" — and places the reconciliation duty on the aggregator itself: a "PA – CB shall provide the documents / information required by the exporter / importer to the AD bank of the exporter / importer, for closure of their corresponding entry in Export Data Processing and Monitoring System (EDPMS) / Import Data Processing and Management System (IDPMS), wherever applicable." Those are the systems through which India tracks whether export proceeds are realised and import payments match customs declarations. The narrower formula in the repealed 2023 circular, which spoke of "AD banks maintaining ICA / ECA" and named EDPMS / IDPMS reconciliation directly as their duty, no longer applies.
Customer due diligence of merchants is required under the RBI's KYC Master Direction, but the 2025 rules add a proportional carve-out for small sellers: streamlined onboarding is permitted where a merchant's "annual turnover does not exceed ₹40 lakh, or its annual export turnover does not exceed ₹5 lakh." This replaces the narrower 2023-circular rule, which required additional buyer-side due diligence whenever a single imported item's value crossed ₹2,50,000 — a provision that no longer applies now that the 2023 circular has been repealed, though it illustrates how granular RBI's earlier approach was.
Data handling is also regulated: a PA must "comply with data storage requirements as applicable to Payment System Operators (PSOs)" under the RBI's 2018 data-localisation circular (DPSS.CO.OD No.2785/06.08.005/2017-2018 of April 6, 2018), and the Master Direction's technology baseline requires entities to "take preventive measures to ensure storing data in infrastructure that do not belong to external jurisdictions" — that is, to keep payment data out of foreign-owned infrastructure.
Why PA-CB Matters for a Foreign Company or Investor
Three groups of foreign-linked businesses run into PA-CB directly:
- Foreign e-commerce marketplaces and payment processors that want to settle payments for Indian sellers or buyers cannot simply route funds through an overseas gateway. The settlement leg touching an Indian merchant's account has to run through an RBI-authorised PA-CB (or a bank acting as one) with an InCA/OCA held at an Authorised Dealer Category-I bank.
- An Indian subsidiary of a foreign parent that aggregates payments on behalf of its own sub-merchants or a wider seller network — rather than simply collecting its own sales proceeds — can itself fall within the definition of a Payment Aggregator and need authorisation, triggering the ₹15 crore net worth bar before it can operate at all.
- Any exporter or importer relying on a PA-CB for settlement still needs its own Import Export Code, and export receipts collected through a PA-CB still need to be evidenced for realisation purposes in the same way funds received directly would be, since the AD bank's EDPMS/IDPMS reporting sits behind the aggregator, not in place of it.
Compliance Checklist for a PA-CB Applicant
- Net worth of at least ₹15 crore at the time the application is filed with the RBI, rising to ₹25 crore by the end of the third financial year after authorisation is granted
- A separate InCA and/or OCA opened with an Authorised Dealer Category-I scheduled commercial bank, with no co-mingling between inward and outward flows
- Merchant KYC/due diligence in line with the RBI's KYC Master Direction, with streamlined onboarding available only for merchants under the ₹40 lakh turnover / ₹5 lakh export-turnover thresholds
- No single transaction processed above the ₹25 lakh per-transaction ceiling
- Data storage in line with the RBI's 2018 payment-system-operator localisation circular
- Supply of the documents and information the exporter or importer needs for their AD bank to close the corresponding EDPMS/IDPMS entry, wherever applicable
Practical Example
An Indian software company sells a subscription product to customers in the United States, the United Kingdom, and Singapore through its own website. It uses a PA-CB to collect card and wallet payments from these overseas buyers. The PA-CB routes each payment into its Inward Collection Account held with an Authorised Dealer Category-I bank, deducts its processing fee, and remits the net proceeds to the software company's current account. Because each subscription is priced well under ₹25 lakh, no transaction breaches the per-transaction cap. The PA-CB supplies the documents the company's bank needs to close the corresponding EDPMS entry, so that the export proceeds are matched against the company's FIRC-equivalent bank realisation certificate, keeping the company's export-realisation record clean for RBI and tax purposes. If the same company later wanted to run payment collection for a network of other Indian sellers rather than only its own sales, it would need to evaluate whether it has itself become a Payment Aggregator requiring separate RBI authorisation.
Common Mistakes
- Assuming any overseas payment gateway can settle an Indian exporter directly. The settlement leg into an Indian merchant's account has to pass through an RBI-authorised PA-CB or a bank, not an unregulated foreign processor.
- Citing the retired "export only / import only / both" category names as current law. Those PA-CB-E, PA-CB-I, and PA-CB-E&I labels came from the October 2023 circular, which the September 2025 Master Direction has repealed in favour of "inward" and "outward" transaction authorisation.
- Overlooking that aggregating for other merchants — not just processing one's own sales — can itself require PA authorisation and the associated ₹15 crore net worth threshold.
- Treating the escrow account as an ordinary current account. The InCA/OCA structure must sit with an Authorised Dealer Category-I bank specifically, and inward and outward funds cannot be co-mingled.
Frequently Asked Questions
What is the difference between a PA-CB and a domestic Payment Aggregator?
A domestic Payment Aggregator (PA-O, for online, or PA-P, for physical point-of-sale) processes payments between parties within India. A PA-CB specifically handles cross-border payments — an Indian merchant's export receipts (inward) or import payments (outward) to or from an overseas party — and must route funds through an Inward or Outward Collection Account held with an Authorised Dealer Category-I bank.
What net worth does a PA-CB need?
Under the RBI's Master Direction of September 15, 2025, an applicant needs a minimum net worth of ₹15 crore at the time it files its authorisation application with the RBI, and must reach ₹25 crore by the end of the third financial year after authorisation is granted.
Is there a cap on how large a single transaction can be?
Yes. The Master Direction fixes the maximum value per inward or outward transaction processed by a PA-CB at ₹25 lakh. The same ₹25 lakh figure appeared in the October 2023 circular, which applied it to the value per unit of goods or services sold or purchased rather than per transaction.
Does an Indian exporter or importer need to become a PA-CB itself?
Only if it aggregates or processes payments on behalf of other merchants, not merely its own sales. A company that simply receives its own export proceeds or pays its own import bills through a PA-CB does not need separate authorisation — the PA-CB it uses is the regulated entity.
What happened to the "export only" and "import only" PA-CB categories?
Those categories, PA-CB-E, PA-CB-I, and PA-CB-E&I, were created by the RBI's October 2023 circular. That circular has been repealed by the Master Direction on Regulation of Payment Aggregator (PA) dated September 15, 2025, which now authorises PA-CBs by transaction direction — inward and/or outward — rather than by those earlier labels.
See also: Payment Systems in India, FIRC (Foreign Inward Remittance Certificate), and Authorized Dealer Bank.
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