How to Accept Payments from India Without a Local Entity

If your company is registered outside India, you can accept payments from India without a local entity.

You do it through one of three models: a licensed collections provider that settles the money abroad under a Payment Aggregator - Cross Border (PA-CB) licence, a Merchant of Record, or an international card processor.

Your customers pay with UPI, cards or netbanking.

Xflow is one of these providers

We hold final PA-CB authorisation from the Reserve Bank of India (RBI), the licence that lets a provider collect rupees inside India and settle them abroad.

Your company can stay registered abroad and still take UPI, card and netbanking payments from Indian customers, because we hold the licence and collect on your behalf.

You don't need to incorporate in India, open an Indian bank account or get a local payment licence.

Skipping the entity does not skip tax. Depending on the model you pick and whether your buyers are consumers or GST-registered businesses, you may still owe Indian GST on digital sales, so settle that before you launch.

All three models keep your company outside India. They differ on who sells to your customer and who holds the RBI licence:

• Via a licensed PA-CB collections provider (Xflow, Cashfree, Razorpay, PayU, EximPe) - collects through Indian payment methods under its own RBI licence and settles to your overseas account, while you stay the seller.
• Via a Merchant of Record (Paddle, FastSpring, Lemon Squeezy) - becomes the legal seller to your customer and handles the invoicing and the tax.
• Via an international card processor (Stripe, PayPal) - charges Indian cards as international payments, and Stripe accounts in eligible countries can add UPI.

A manual bank wire sits outside these models: it moves money but gives you no checkout and no way to charge the same customer again.

Most of the friction you hit comes from India's rules on who may touch local payments and move money out of the country:

• An Indian subsidiary takes months - and brings ongoing duties, including a resident director and an annual statutory audit. A smaller Indian registration still brings its own bank account and filings.
• Collecting rupees and moving them abroad needs an authorised aggregator - RBI's Master Direction on Regulation of Payment Aggregators requires a non-bank entity to be authorised before it runs cross-border aggregation. That entity has to be a company incorporated in India.
• Indian cards start with online use switched off - under RBI's January 2020 card-security rules, online and international use stays off on a newly issued card until the cardholder turns it on. A card-only checkout reaches only buyers who have done that.
• UPI and netbanking are domestic methods - UPI is the instant bank-to-bank system run by the National Payments Corporation of India (NPCI), and netbanking lets a buyer pay by logging in to their bank's site. Your checkout offers them only if your provider supports them.
• Recurring charges follow RBI e-mandate rules - your customer approves a mandate once, and larger charges need fresh approval each time, so your provider has to support India's mandate flow.
• Settlements need matching back to orders - every payout arrives converted and batched, so your finance team has to tie each one to the invoices it covers.

The three models differ on who is the seller on the invoice, which Indian payment methods your buyers get, and who carries the RBI compliance.

We at Xflow are a licensed PA-CB collections provider, so you stay the seller while we handle the RBI side of each collection.

How a licensed PA-CB collections provider collects rupees and settles you abroad

A licensed collections provider works inside India's regulated framework for payment aggregators and holds the PA-CB authorisation itself. You stay the legal seller, while the provider runs the collection, the conversion and the RBI reporting.

Your money moves in four steps:

1. Your customer pays in rupees - through UPI, a card, netbanking or a bank transfer, on a checkout the provider hosts or on your own front end calling its API.
2. The money lands in a collection account - held at an Authorised Dealer Category-I (AD-1) bank, the class of bank permitted to handle the foreign-exchange leg.
3. The AD-1 bank converts the rupees - into your settlement currency, on the terms your provider has agreed with it.
4. The converted amount settles abroad - into the account you already hold, with a settlement confirmation or reconciliation report you tie back to individual orders.

Xflow, Cashfree, EximPe, Razorpay and PayU all appear on RBI's list of PA-CB holders, so you have several credible options. The same collect-locally, settle-abroad chain sits behind many cross-border payment platforms.

Providers differ on method coverage, settlement currency and timing, and how much integration help you get.

How a Merchant of Record sells to Indian customers on your behalf

A Merchant of Record (MoR) such as Paddle, FastSpring or Lemon Squeezy sells to your Indian customer in its own name.

It invoices the buyer, collects the payment, charges and files the tax, answers any chargeback, and then pays you out. On those sales, you do not charge or file the Indian tax yourself.

Paddle's own tax list shows India at 18% GST for consumer (B2C) sales. Paddle offers UPI to buyers in India paying in rupees, and FastSpring offers UPI for buyers in India on request.

If you are still weighing this model, our guide on what is merchant of record explains how the seller role shifts.

How international card processors handle payments from Indian customers

Stripe and PayPal both take money from Indian customers today. If you run Stripe from the US or another eligible country, you can switch UPI on from the Dashboard for Checkout, Payment Links and Subscriptions.

• Card payments - run as cross-border card authorisations decided by the buyer's Indian issuing bank. RBI's Master Direction treats a card payment whose currency conversion the card network handles as outside PA-CB activity, so for card payments the processor is not acting as your cross-border collections provider.
• UPI on Stripe - Stripe offers UPI to accounts in the US and 34 other countries, with recurring UPI charges capped at ₹15,000.
• PayPal - stopped domestic payments inside India on 1 April 2021 but kept international payments, so an Indian PayPal user can still pay you as an overseas merchant.
• The gaps - netbanking, RuPay (India's domestic card network) and Indian prepaid wallets generally sit outside what an international card processor reaches.

Whichever model you choose, the path to your first rupee payment follows the same order:

1. Pick your model - decide whether you stay the seller, through a PA-CB provider or a card processor, or hand the sale to a Merchant of Record.
2. Check the provider on RBI's list - open RBI's list of authorised payment system operators and confirm the provider carries the inward flag (PA-CB-I, or PA-CB-I & O).
3. Complete business verification (KYB) - expect to give your legal business name, registered address and company registration details.
4. Integrate the checkout and switch on methods - add the provider's hosted checkout or API and turn on the payment methods you want, starting with UPI and cards.
5. Settle your GST position - work out with a tax adviser whether your sales need Indian GST registration before you launch.
6. Test, go live and reconcile - run test payments in test mode, go live, then match each payout to its orders using the settlement reports.

Two sets of rules apply when you sell into India: RBI's payment limits, which every provider follows, ours included, and Indian GST. What you owe in GST depends on who the law treats as the seller of record and whether your Indian buyer is a consumer or a GST-registered business, not on having an office in India.

On the RBI side, the ₹25 lakh cap binds PA-CB providers, while the e-mandate rules cover recurring UPI and card payments on any route.

RBI transaction limits and e-mandate rules for recurring payments

RBI's Master Direction on Regulation of Payment Aggregators (RBI/DPSS/2025-26/141, 15 September 2025) caps each inward or outward PA-CB transaction at ₹25 lakh, at Para 11(d).

A single payment above ₹25 lakh cannot go through a PA-CB provider, so raise it with any provider before you price a large deal.

Recurring billing runs on RBI's E-mandate Framework, 2026 (RBI/DPSS/2026-27/396, 21 April 2026). It covers recurring payments on UPI and cards, domestic or cross-border, and sets three rules you plan around:

• ₹15,000 per charge - recurring charges up to ₹15,000 go through without additional factor authentication, and above that each charge needs fresh authentication from your customer.
• 24-hour notice - after a one-time approval at set-up, your customer gets a pre-debit notification at least 24 hours before each charge.
• ₹1 lakh carve-out - a higher ₹1,00,000 ceiling covers only insurance premiums, mutual fund subscriptions and credit card bills, so do not plan a subscription product around it.

Registering for GST with Form REG-10 and filing GSTR-5A returns

Selling digital services to Indian consumers puts you inside OIDAR, short for Online Information Database Access and Retrieval.

India's OIDAR rules reach a non-resident supplier with no presence in the country, and Section 24 of the CGST Act makes registration compulsory for the category, with no turnover threshold.

• Form REG-10 - the registration application for a non-resident OIDAR supplier, set out at Rule 14 of the CGST Rules. The certificate comes back as Form GST REG-06.
• GSTR-5A - the monthly return covering those supplies, filed under Rule 64 and due by the 20th of the following month.
• IGST at the standard services rate, 18% - charged to Indian consumers on OIDAR supplies and remitted in India. Check the rate notification in force when you register.
• Reverse charge for B2B - when your Indian buyer is GST-registered, the buyer self-assesses the tax, and you do not need Indian GST registration for that sale.

Permanent establishment and Significant Economic Presence tax exposure in India

Collecting online through a licensed provider does not, by itself, create a permanent establishment in India. That risk comes from people, dependent agents or a fixed place of business inside the country, not from a checkout integration.

India's Significant Economic Presence (SEP) rule is a separate test. It can create a taxable business connection from digital sales alone, with no physical presence, once you cross either threshold:

• ₹2 crore of India-linked payments - received in a year.
• 300,000 or more Indian users - engaged with systematically.

Where you're resident in a country with an Indian tax treaty, the treaty's permanent-establishment article generally governs instead, provided you can claim treaty benefits (a tax residency certificate is normally needed).

If your India revenue is material, put the question to a tax adviser before you launch.

Checking the provider's licence, payment methods and settlement terms

Before you sign, get four answers from any provider you shortlist:

• Inward flag on RBI's list - RBI marks each PA-CB holder as inward (I), outward (O) or both, and collecting from Indian buyers needs the inward flag.
• Live payment methods - confirm which methods are switched on for your account, on the checkout or API you will actually integrate.
• Settlement currency and timing - get the currency you receive and the standard settlement time in writing, and ask which figure is standard and which is best case.
• Shipping documents for physical goods - if you ship goods, expect your provider to ask for shipping documents after dispatch, within a deadline it sets.

Indian buyers are used to paying with UPI, domestic cards and netbanking. Offering those at checkout, instead of only an international card, changes how many payments go through:

• More payments complete - many Indian cards are not enabled for international use, so a card-only checkout loses buyers whose card is refused before the payment starts.
• The payment method they already use - UPI is the everyday way to pay in India, so a buyer can pay from their phone without looking for a card.
• Rupee pricing with no surprise charges - a buyer paying in rupees sees the final price upfront, with no foreign currency markup added by their bank later.
• Recurring billing that keeps working - UPI AutoPay and card e-mandates let a subscription renew under RBI's rules, where an international card mandate often fails.
• Room for business buyers - netbanking and bank transfer suit Indian companies that pay invoices from a current account rather than a card.

The right route turns mostly on two things: whether your billing repeats, and whether your India revenue is large enough to justify compliance work of your own.

• Recurring subscriptions priced in rupees - a collections provider with UPI AutoPay and card e-mandate support. Any recurring charge above ₹15,000, on UPI or card, needs fresh authentication every time, and a US edtech platform billing annual plans above ₹15,000 meets it at every renewal.
• A marketplace or platform collecting for its own account - a PA-CB provider, with the marketplace as its contracted merchant. RBI limits a payment aggregator to collecting for merchants it has a contract with, so confirm how payouts to your own sellers will work before you sign.
• Digital goods, small team, tax handled for you - a Merchant of Record. Pick differently if your buyers are GST-registered businesses that want an invoice in your name.
• India is one small market among many - keep your card processor. A Berlin analytics company with a small slice of Indian revenue can live with the gaps until refused payments cost more than a switch.
• A few B2B invoices a year - a bank wire is enough, and a London or Singapore consultancy invoicing a couple of Indian clients should not build anything. Once invoicing turns monthly, move to a provider.

We're Xflow, and through Xflow Payments India Pvt. Ltd. we hold final PA-CB authorisation from the RBI, granted in February 2026. Final here means the fully approved stage, past in-principle.

If your company is registered outside India, you can use us to collect rupee payments from Indian customers with no Indian company and no Indian bank account.

We're a collections and checkout provider, not a Merchant of Record, so you stay the seller of record.

What your Indian customers pay with and when you get settled

We collect through four methods:

• UPI - India's instant bank-to-bank payment system.
• Cards - Visa and Mastercard.
• Netbanking - direct bank-account payments.
• Bank transfer - for invoice-style payments outside a checkout.

Our standard settlement is 2 business days (T+2), T+1 available on request.

What getting set up involves for a company based outside India

Getting set up is a business check, with no incorporation, and you can be live in days rather than quarters:

• Business verification (KYB) - you share your legal business name, registered address and company registration details, and our team verifies them.
• Hosted checkout - you add our checkout to your site, and your customers pay in rupees.
• Settlement abroad - funds reach your existing overseas account through an AD-1 bank.

You can see how the product works on our page for companies that want to accept international payments from India.

You can sell into India without a local entity through one of three models. A licensed PA-CB provider keeps you as the seller with no Indian entity.

A Merchant of Record takes over the sale and the tax, while a card processor suits card-first sales.

Whichever you choose, check your GST and permanent-establishment exposure with a tax adviser before launch. Get the provider's inward licence flag, live payment methods and settlement terms in writing before you sign.

If the licensed route fits, we at Xflow can collect from your Indian customers through UPI, cards and netbanking and settle to your existing overseas account. Your company stays where it is, and you need no Indian bank account.