Cashfree Payments CEO Akash Sinha says payment licences alone are not enough, with India’s PA market dominated by a few large players with strong tech and enterprise scale.
After RBI-led disruption slowed growth, Cashfree is betting on SMEs, enterprise merchants, and cross-border payments to revive momentum.
While rivals push agentic AI commerce, Cashfree believes payments infrastructure, compliance, and profitability remain the real near-term priorities.
The past two years have seen a rush for payments licences in India. The Reserve Bank of India (RBI) has handed out payment aggregator (PA) and payment gateway (PG) authorisations in rapid succession to a host of companies.
From PhonePe to BharatPe and from Cashfree to Razorpay, more than 55 companies (fintech and otherwise) now have PA licences. MobiKwik, Paytm, Zoho, Juspay, Decentro, CRED, PayU, Enkash, Pine Labs, Amazon Pay, Innoviti, Razorpay, CC Avenue, Tata Pay, Google Pay, Infibeam Avenues, and Mswipe are among the other contenders in the PA space.
But Akash Sinha, CEO and founder of Cashfree Payments, argues that obtaining a licence is merely the floor and not a competitive moat. This is why even after the rush for licences post the RBI crackdown on the non-compliant onboarding of merchants in 2022 and 2023, the PA ecosystem is largely dominated by 3-4 players, Sinha added.
Speaking to Inc42, Sinha noted that while the space appears ripe for disruption from the outside, the reality is starkly different.
“We have more than 50 such PAs, but the opportunity is very much limited to three or four players, who own more than 80% of the market share. That trend will continue because it’s not about owning the licences, but the products and the tech,” he said.
An RBI licence, which has its own compliance burden, only paints half the picture. For instance, it tells you nothing about whether a company can actually compete for the enterprise accounts that drive the bulk of transaction volumes through technology and without adding on to the cost in the already-tight unit economics for merchants.
“It’s a very complex business. You have to be in the industry for four to five years to build the technological backbone and category-level personalisation required to serve verticals like commerce, travel, and property,” he added.
Sinha sounds confident now, but the picture was rather bleak in late 2022 and 2023, when Razorpay, Billdesk, Cashfree and a host of other players were asked to stop onboarding new customers and to go through a licensing process.
This resulted in mayhem in the payments industry, with the likes of Instamojo suffering major disruption. The central bank’s whip fell on 25 existing PA licence holders and 47 other applicants who were rejected from the process. This meant a complete reset for many of the players, including Cashfree.
Cashfree saw its net loss widen a whopping 46X to ₹133.1 Cr in FY23 from ₹2.9 Cr in the previous year, hurt by a sharp jump in its employee costs. Operating revenue nearly doubled to ₹613.8 Cr, but as the company was in an expansion phase, the losses spiralled.
Then came the RBI crackdown, which meant that Cashfree had to hit the brakes. Revenue inched forward marginally (less than 5%) to ₹639 Cr, while net loss also grew slightly to ₹136 Cr. The freeze, which was eventually lifted in December 2023, resulted in a major revenue slowdown.
In the next fiscal year, too, revenue remained around the ₹640 Cr mark, a pattern which continued in FY25 as well. And in both those fiscal years, net losses remained around the ₹150 Cr mark.
The revenue momentum had completely stalled. And while Sinha and Cashfree claim it will close FY26 at close to ₹1,000 Cr, it has yet to file its audited financial statements for the year.
The company declined to tell us about the overall profitability, which will also be in focus in the current environment. Razorpay is also yet to turn profitable but reported ₹3,783 Cr in revenue in FY25, up from ₹2,296 Cr in FY24. That’s the scale that Cashfree is up against.
Sinha is confident that the slowdown is completely behind the company because it went back to the drawing board and rearchitected key parts of its product in the past two years. This has coincided with another growth phase in the PA space thanks to the quick commerce boom.
“The market position has become stronger, market share has gone up, and we have been able to do better than most peers in the market,” he told us.
But the competitive intensity is only set to grow higher as players such as Razorpay, Billdesk, Pine Labs and others continue to add to their market share as well. Even the likes of PhonePe, CRED and others have focussed heavily on their PA business as the fintech ecosystem tries to diversify beyond UPI payments.
While newer entrants try to break into the market with aggressive pricing, established players benefit from years of scale-tested tech and compliance systems.
Cashfree claims its customer base is a mix of homegrown giants like Eternal, BigBasket, and Zepto, alongside global platforms like OpenAI and X (formerly Twitter), which allows it to maximise revenue across many fronts.
A key USP for Cashfree is its strategy of bypassing third-party payment routing layers entirely.
“Today, we work directly with Visa and Mastercard without any intermediary. This is our customer-first mindset. Any business processing more than two lakh transactions per day needs high uptime and reliability, and by working directly with payments processors we are able to meet that need,” the Cashfree CEO says.
Sinha explained that tying up with card networks eliminates the acquirer markup typically paid to backend partner banks. “This direct connection means we only incur the raw interchange fees paid to the issuer and the scheme/assessment fee paid to the network,” he added.
Notably for merchant payments, card networks (like Visa and Mastercard) generally do not charge merchants directly; instead, they charge acquiring banks flat or percentage-based processing fees ranging up to 0.13% of the transaction volume. These costs are almost always passed on to the merchant as part of their overall processing fees.
“Direct integration ensures lower latency and higher data integrity, which directly translates to higher success rates. These improved authorisation rates drive higher payment volumes through our gateways, ultimately leading to higher revenue,” Cashfree CEO told us.
While enterprise accounts drive the volume, Cashfree is also aware that capturing merchants early in their lifecycle will be critical for the LTV. This mitigates the somewhat high customer acquisition cost in the SME space.
The mid-tier SME segment — currently also a big focus for Cashfree competitors Razorpay and Billdesk — is a critical battleground in the PA space. Every player wants to tap the new merchant wave that’s joining the quick commerce and ecommerce wave.
According to Sinha, Cashfree’s SME merchant contribution grew by over 100% in the last 12 months.
This growth was fueled by creating a distinctly B2C-like product experience for merchants, featuring faster onboarding, instant settlements, simplified dashboards, and mobile-first workflows.
“SMEs need faster gratification and are more familiar with typical fintech apps, which is what we aimed to do. This means no-code solutions, WhatsApp integrations, and automated workflows, which have really helped us scale in this segment.”
The Indian market is growing fast, but there’s also a big need to connect global markets to India. Amid the export push in terms of central government policy, Cashfree, Pine Labs, Razorpay, and a host of other players are looking at cross-border transactions as a growth frontier.
Sinha claims the revenue base for the cross-border payments vertical has doubled over the past year.
Within cross-border transactions, Cashfree says a majority of the transactions come from D2C ecommerce and service exporters like IT and design firms on the exports side. On the import side, which are international businesses selling into India, growth is propelled by global SaaS providers, consumer internet companies, and popular AI tools.
Historically, Indian exporters relied heavily on card-based transactions, but Cashfree is targeting high-value, invoice-based flows to reduce settlement time and improve workflows.
“If a merchant is raising an invoice for $300,000, that cannot happen through credit cards. These flows are still broken. There is a lot of delay in processing these transactions, compliance is complex, and costs are high,” Sinha points out.
On the question of how Cashfree solves the above challenges, the company CEO said that it has tied up with global banks like JP Morgan to reduce transaction settlement timelines to two days compared to the industry standards of seven days after the payments settlement. “As a result, merchants also have clear visibility on the settlement timelines on our dashboard,” he added.
The company is actively building infrastructure for trade payments and import flows—areas currently plagued by processing delays and high costs—which will be a major focus on the product side over this year.
While companies like Pine Labs and others have built a presence across multiple global markets, Sinha says Cashfree wants to prioritise execution depth over geographic expansion.
Additionally, Cashfree is exploring outward investment flows to facilitate Indian retail investors looking to buy foreign-listed stocks. Plus, the company is also building infrastructure for trade payments and recurring international business payouts for customers such as OpenAI and others.
Sinha claimed that Cashfree is well-capitalised to fund new bets, backed by global venture capital and strategic investors. Secure transactions, payment infrastructure, and secure identity verification systems are three areas that the company will look to focus on.
While Cashfree is not looking for a near-term listing unlike its rival, Razorpay, Cashfree’s CEO also stated that the company is in talks for a private funds-raise without sharing the details of the round. Cashfree, according to some earlier media reports, was in talks to explore a secondary fund raising round.
Thus far, Cashfree has raised $94 Mn since inception from Y Combinator, Apis Partners, State Bank Of India, Smilegate Investment among other investors.
No fintech conversation today is complete without discussing agentic AI, especially because one of the biggest announcements in this space came from Razorpay.
Razorpay’s Agentic AI studio, launched in partnership with Anthropic’s Claude, is working with ecommerce partners like Swiggy, Zomato to let agents orders and complete payments for food delivery, in addition to tie-ups with PVR Inox, Dermacore, BigBasket, and LinkedIn, among others.
“We are transforming into a business operating firm where we help our merchant partners operate in a simplified, more cost-efficient manner. Think of it as a team of AI specialists that businesses can hire in one click — each agent purpose-built to handle a specific commerce challenge, from recovering failed payments to settling disputes before they escalate,” Razorpay CEO Harshil Mathur told Inc42 in March 2026.
But Sinha has a different view on Cashfree’s AI strategy. He says Cashfree currently allows businesses to execute transactions directly from OpenAI chat interfaces. AI agents may not be able to solve all the problems that merchants face these days, particularly with compliance.
For now, the real adoption of AI on Cashfree’s platform is happening at the engineering layer—automating integration, debugging, and payment link testing—as well as internally for video KYC, fraud detection, and smart routing.
“Products have become more complex, and governance and compliance have become more comprehensive in nature. Selling online is not a straightforward business anymore because you need to comply with a lot of regulations,” Sinha says.
Today, the entire ecosystem has to work with each other when it comes to agents. Currently, websites and ecommerce platforms are built for humans to shop, not agents. Evolving those interfaces is a massive change. And Sinha agrees with this notion.
Ultimately, he believes the broader vision for consumer-facing agentic commerce is still two to three years away from meaningful scale and while Cashfree might eventually have agents at the forefront, Sinha believes there’s still a lot of way to go. “Businesses have to put in the groundwork. Unless that happens, agentic AI will not be smooth.”
No one can be confident in predicting that this slow-burn strategy for AI will work out in Cashfree’s favour. AI is changing the landscape drastically and rapidly, but for now, the pressure on Cashfree is still from its fundamentals, and having to prove that it can build a profitable business.
Source: Inc42 - Startups
