Cross-border payments startups in India are facing business disruptions due to shipping delays and cancellations for merchandise exports to Gulf countries and Europe, stemming from the West Asia crisis. Key impacts include delayed payments and a notable effect on sectors like gems and jewellery, particularly for small exporters from the Rajasthan-Gujarat belt.
While goods exports are impacted, overall payment volumes remain somewhat resilient as services exports continue unaffected. The cross-border payments sector, which has attracted significant venture funding, has seen its growth pressured by these and prior macroeconomic disruptions.
The main topics covered are the impact of geopolitical conflict on trade and fintech, the specific challenges for India's export and cross-border payments sector, and the structure of the payments industry involving both startups and larger aggregators.
Cross-border payments startups catering to merchandise exports are bracing for a hit to business as shipments to the Gulf countries and many European destinations face delays and cancellations due to the crisis in West Asia, senior industry executives said.
About 10% of Indiaâs ecommerce exports â estimated at around $150 billion annually â are routed through the UAE. Disruptions in key shipping routes, including the Strait of Hormuz, have impacted shipments transiting through the Gulf region.
Exporters are going slow as flights and shipments through West Asia are disrupted, people cited above said.
âPayments are getting delayed⦠The fear is, if the crisis prevails, the problem will get bigger in the coming weeks,â the founder of a cross-border payments startup said on the condition of anonymity.
Another payment startup founder noted that while goods and merchandise have seen the first degree of impact, overall volumes have held strong as services exports have not been impacted. âThe major impact is being seen in gems and jewellery,â the person said, adding small exporters from the Rajasthan-Gujarat belt are the first ones to see the impact.
The Reserve Bank of India has given licences to multiple payment companies to operate as payment aggregators for offline, online and cross-border payments. Players like PayGlocal, Skydo, XFlow are part of this group. Large payment aggregators like Razorpay, Cashfree also operate in the cross-border space.
Overall, growth of the cross-border payments space has been under pressure for several months, top executive at a digital payments firm said. âLast year, the problems were mainly due to the US tariffs. This year, it began with the war in the Gulf area,â the person said.
Indiaâs export market was at $825 billion in FY25, with services accounting for $387 billion. Fintechs have a share of between 5% and 8% in this space, as per industry estimates, with banks dominating the space as traditional powerhouses. Fintechs typically offer their solutions to small enterprises, freelancers and ecommerce exporters.
The sector has attracted significant venture funding. Tiger Global and Peak XV Partners have invested in Payglocal, while Bengaluru-based XFlow is backed by PayPal and General Catalyst and Skydo has raised funding from SIG Venture Capital and Elevation Capital.
Founders told ET that these macroeconomic disruptions are denting the growth of the cross-border-focused payment industry.
For larger payment companies like Razorpay and Cashfree, domestic payment volumes drive most of their business.
About 10% of Indiaâs ecommerce exports â estimated at around $150 billion annually â are routed through the UAE. Disruptions in key shipping routes, including the Strait of Hormuz, have impacted shipments transiting through the Gulf region.
Exporters are going slow as flights and shipments through West Asia are disrupted, people cited above said.
âPayments are getting delayed⦠The fear is, if the crisis prevails, the problem will get bigger in the coming weeks,â the founder of a cross-border payments startup said on the condition of anonymity.
Another payment startup founder noted that while goods and merchandise have seen the first degree of impact, overall volumes have held strong as services exports have not been impacted. âThe major impact is being seen in gems and jewellery,â the person said, adding small exporters from the Rajasthan-Gujarat belt are the first ones to see the impact.
The Reserve Bank of India has given licences to multiple payment companies to operate as payment aggregators for offline, online and cross-border payments. Players like PayGlocal, Skydo, XFlow are part of this group. Large payment aggregators like Razorpay, Cashfree also operate in the cross-border space.
Overall, growth of the cross-border payments space has been under pressure for several months, top executive at a digital payments firm said. âLast year, the problems were mainly due to the US tariffs. This year, it began with the war in the Gulf area,â the person said.
Indiaâs export market was at $825 billion in FY25, with services accounting for $387 billion. Fintechs have a share of between 5% and 8% in this space, as per industry estimates, with banks dominating the space as traditional powerhouses. Fintechs typically offer their solutions to small enterprises, freelancers and ecommerce exporters.
The sector has attracted significant venture funding. Tiger Global and Peak XV Partners have invested in Payglocal, while Bengaluru-based XFlow is backed by PayPal and General Catalyst and Skydo has raised funding from SIG Venture Capital and Elevation Capital.
Founders told ET that these macroeconomic disruptions are denting the growth of the cross-border-focused payment industry.
For larger payment companies like Razorpay and Cashfree, domestic payment volumes drive most of their business.
Meridiano
