Cashfree Payments works closely with banks, NBFCs, and has SBI as an investor. How does it balance the role of being both a partner to traditional financial institutions and a FinTech that is, in some ways, disrupting legacy processes?
The narrative of FinTech as a bank disruptor doesn’t hold up in the Indian payment’s context; it’s actually a model built on collaboration. Every payment we process flows through a banking partner. They handle the underlying settlement, while we build the intelligence, product layer, and merchant experience on top. SBI’s investment in Cashfree validates this complementary approach.
Our partnerships with banks and NBFCs manifest in three ways.
The first is referral partnerships. Banks with strong SME lending books direct their business clients to our gateway. It’s a natural fit, allowing them to provide a robust payments solution without building the infrastructure themselves.
The second, which is strategically the most significant for us, is our “Managed PA” partnership. While many banks hold PA-PG licenses, by default, few have the tech stack to build that infrastructure from scratch. We act as the managed payment aggregator behind the bank’s brand. The bank keeps the merchant relationship, while the merchant gains access to our 180+ payment methods, international gateway, and high-success-rate switches. It is a model that creates meaningful, recurring transaction volumes for us, and it is one we are actively expanding to more banking partners. As banks look to modernize their digital offerings without building proprietary infrastructure, this remains a significant growth area for us.
The third is operational modernization, which is critical for smaller NBFCs and urban cooperative banks. Regulatory compliance like identity verification have historically been slow and expensive; our identity verification platform SecureID automates this, significantly cutting compliance costs and turnaround time. To these institutions, we also offer products like UPI AutoPay and eNach for loan repayments. Furthermore, with our Biller Operating Unit (BOU) certification on Bharat Connect, they can onboard as a biller, giving their customers access to over 700 digital channels and 500,000+ offline touchpoints.
Ultimately, these partnerships thrive because we solve genuine operational pain points for these institutions, allowing our collaboration to deepen naturally.
Fast settlement is one of the features merchants consistently value about Cashfree. How important is settlement speed as a differentiator, and are you exploring instant or same-day settlement and working capital products to deepen merchant stickiness?
Commerce is moving incredibly fast now. D2C brands are hitting revenue goals in two years that used to take physical stores a decade. In this environment, waiting for settlements just doesn’t work. If a brand has a massive spike in sales during a festive season, they need that money immediately to restock inventory, rather than relying on external credit. Giving merchants real control over their cashflows is how they stay agile. Hence, payment aggregators that can provide instant settlements have a strong differentiator in the market.
Cashfree Payments has already moved past the industry standard of T+2 days by offering instant and same-day settlements. But we wanted to go further by giving merchants total flexibility. They can withdraw their balance on demand with one click or set up a recurring schedule that fits their specific business cycle. They can even choose to settle into a bank account or a virtual account. When you put merchants in the driver’s seat of their own cashflow, they can manage their operations much more efficiently, which often means they don’t even need to look for external working capital.
Much of India’s next wave of digital adoption will come from tier-2, tier-3 towns and smaller businesses. What role does Cashfree play in bringing these underserved merchants into the formal digital economy, and what barriers still need to be solved?
When we started Cashfree in 2015, we had one simple belief that the internet has democratized commerce, but legacy payment systems were holding small businesses back. For the last decade, we’ve focused on changing that. We don’t just want to provide a service; we want to make sure our tools grow alongside our merchants, whether they’re just starting out or scaling globally.
Think of it as a journey. When you’re first starting out, maybe selling sarees over WhatsApp, you need something simple. Our WhatsApp Links, built with Meta, lets you send a payment request directly in the chat, so your customer can pay however they want without ever leaving the conversation.
As you grow and start seeing more volume, manual work becomes a bottleneck. That’s where our remote MCP server comes in. You can simply message our chatbot “refund 500 rupees to this customer” and it handles the manual heavy lifting for you.
If you scale up into a full-fledged D2C brand, you need speed. That’s where One Click Checkout makes a difference. It learns what your customer prefers, auto-fills details, and highlights the right offers and preferred payment method, which often helps brands boost their conversions by over 50%.
And when you go global, our international gateway lets you accept payments from anywhere in the world through local payment methods like Apple Pay, in their local currencies, while we handle the backend process like FIRC reports and compliance and getting the money settled in INR into your bank account.
At the end of the day, no matter what stage your business is at, we’re here to make sure technology is an asset, not an obstacle.
Data sovereignty and the Digital Personal Data Protection Act are reshaping how financial data is handled. What governance and security frameworks has Cashfree put in place to maintain trust as transaction volumes scale?
For us, data governance is the foundation of everything we do. It’s why we were among the first to secure all three RBI licenses: Payment Aggregator (PA-PG), Cross Border (PA-CB), and Prepaid Payment Instruments (PPI). Each of these licenses come with its own set of data handling obligations that we operate within.
However, beyond just compliance, a few principles guide how we actually run things day to day. Access to sensitive data inside Cashfree is given strictly on a need-to-know basis, employees see only what is relevant to their role. We also run something called active-active disaster recovery where we are running a full parallel system in another city, so there is never a single point of failure that could put data or transaction at risk. And for our most sensitive transaction flows, we build in extra layers of double-checking before anything is finalized, because in FinTech, accuracy and protection of data go hand in hand.
We’re also constantly sharpening our fraud defenses. Since fraudsters are now using AI to find gaps, we’ve built AI into our own systems too. Our risk engine RiskShield, screens every transaction in real-time before approval, and our identity checks are designed to spot sophisticated threats like deepfakes right at onboarding.
How do you see AI and agentic systems reshaping the way merchants interact with payment infrastructure over the next few years?
I see AI and agentic systems reshaping merchant interactions in three keyways. First, the speed of integration has been transformed. What used to take developers days of manual documentation review now takes less than 10 minutes. With tools like our Cashfree Agent Skill CLI, developers can load product knowledge directly into their AI coding assistants, which then handle the heavy lifting of writing the integration code.
Second, we’re automating the routine business and payment processes that often distract founders, taking their bandwidth. Beyond just collecting payments, tasks like processing refunds, managing chargebacks, and forecasting cashflow can now be handled by AI. We are soon launching an agentic payment and AI workflow suite designed to automate these operational hurdles, allowing founders to stay focused on growing their core business.
Finally, we are entering the era of agentic commerce, where the shopping journey happens entirely within chat environments. Currently, a lot of discovery is already happening within chat environments. However, many businesses lose customers when they redirect them to external websites to finish a payment. To solve this, we built Cashfree Here, a payment connector that allows companies to collect payments directly within the chat, creating a seamless experience that naturally boosts conversions.
India’s e-commerce exports are projected to head toward $200 billion, and digital payments continue to deepen across tier-2 and tier-3 markets. Where do you see the next phase of growth coming from for Cashfree, and what role will offline and softPOS-style solutions play in that?
We see three clear growth vectors at Cashfree. The first is internet-first SMBs and D2C brands. As more Indians become internet-first consumers, a new generation of digitally native businesses is emerging to serve them. This was actually our fastest-growing segment this past year, growing over 100%. Payments for these businesses are not just plumbing, but a conversion lever. They want checkout experiences that actively convert more customers, not just process transactions reliably. This is why we are building an entire D2C and ecommerce stack that will help merchants throughout the D2C journey from acquisition to conversion. Some products are already being tested, and you will hear more from us on it very soon.
The second is cross-border payments, where we’re seeing demand from both directions. Indian brands that have found success domestically are increasingly looking to sell internationally, and they need to offer international buyers local payment methods like Apple Pay, for instance and local currency pricing, while still settling in INR. At the same time, global companies recognize India as too large a consumer market to ignore, but to actually convert Indian buyers, they need to accept UPI and RuPay. Our import stack lets them collect in INR while settling in their home currency. That two-way demand is why our cross-border net revenue grew 10x last financial year
The third is identity verification and fraud prevention. As digital payment volumes scale, fraud scales with it. We’re investing heavily in SecureID to evolve it into a comprehensive, full-stack identity and fraud prevention suite, because we see this becoming as fundamental to merchants as payment acceptance itself.
Send news announcements/press releases to:
editor@thefoundermedia.com
