Pratyush Jha 

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A payment aggregator gives businesses one route for accepting different types of digital payments, such as cards, UPI, net banking, and wallets. Instead of setting up separate merchant arrangements with different banks, the business can integrate the aggregator once and use its payment infrastructure.

A payment aggregator simplifies the payment process by connecting a merchant to multiple payment methods through one platform. It handles the transaction flow between the customer, payment networks and financial institutions, while the collected funds are settled to the merchant through the prescribed process.

The business first registers with the payment aggregator and completes the required KYC and business verification. Once approved, it can accept payments through the aggregator's infrastructure instead of establishing separate acquiring arrangements for each payment method.

<a></a>Step 2: Customer Initiates Payment

At checkout, the customer selects an available option such as UPI, card, net banking, wallet or EMI and provides the information needed to make the payment.

The aggregator sends the transaction through the relevant payment network, bank or payment infrastructure. Its systems may also perform fraud and risk checks as part of the transaction process.

<a></a>Step 4: Payment is Authorised or Declined

The customer's bank or card issuer evaluates the transaction and sends back an approval or decline response. The resulting status is then communicated to the customer and merchant.

For a non-bank payment aggregator, funds collected for merchants are maintained in the prescribed escrow account with a scheduled commercial bank. They are kept separate from the aggregator's own operating funds.

<a></a>Step 6: Merchant Receives the Settlement

The aggregator settles the merchant's funds after applying the applicable charges and adjustments. The settlement period depends on the relevant arrangement and regulatory requirements, so T+1 should not be treated as a universal settlement period for every PA.

<a></a>Step 7: Multiple Payment Methods Through One Integration

Because the aggregator maintains the underlying payment connections, a merchant can offer several payment options through a single integration rather than building each payment connection independently.

Payment aggregators can generate revenue through applicable transaction charges and other services, including payment-related products, payouts, subscriptions and value-added services. UPI and RuPay debit-card transactions currently have zero MDR under the applicable government framework, so the revenue model differs across payment methods and services.

<a></a>What Are the Types of Payment Aggregators in India?

Payment aggregators in India can be grouped into bank-led payment aggregators and non-bank payment aggregators, while cross-border collection and payout activity is covered separately under the Payment Aggregator-Cross Border (PA-CB) framework.

Banks can provide payment aggregation as part of their existing regulated banking activities, so they do not need the separate RBI authorisation applicable to non-bank PAs. Their existing banking relationships can make them suitable for larger enterprises, although onboarding, integration speed, pricing and technology features vary between banks. Some bank-led solutions may also offer fewer merchant-facing analytics and payment-management features than dedicated fintech platforms.

<a></a>2. Third-Party Payment Aggregators

Third-party PAs are non-bank companies that require RBI authorisation to provide payment aggregation services. They typically give merchants one integration for several payment methods and may offer features such as faster onboarding, transaction dashboards, reconciliation, sub-merchant management, payouts and risk controls.

Examples of non-bank payment aggregators operating in India include Razorpay, Cashfree Payments, PayU, One97 Communications (Paytm), PhonePe, BillDesk, Infibeam Avenues (CCAvenue), Pine Labs, Google Pay India and Amazon Pay India, subject to their respective RBI authorisations and approved activities. RBI's authorised-entity list should be checked for the latest status because an entity's authorisation and permitted activities can change.

<a></a>3. Payment Aggregator-Cross Border (PA-CB)

PA-CB is a separate RBI category for entities facilitating eligible online <a href="https://www.skydo.com/blog/top-5-cross-border-payment-companies-in-india">cross-border payments</a> relating to the import and export of goods and services. The framework was introduced on October 31, 2023 and has three sub-categories:

PA-CBs must comply with applicable FEMA requirements, as well as RBI rules covering KYC, reporting, transaction monitoring and reconciliation of cross-border payment flows. The current RBI framework is set out in the RBI (Regulation of Payment Aggregators) Directions, 2025.

What Are the Key Benefits of a Payment Aggregator?

The key benefits of a payment aggregator include quicker setup, access to multiple payment methods through one integration, built-in payment security, centralised settlement management, and infrastructure that can scale with transaction volumes.

<a></a>Key Benefits of a Payment Aggregator

<a></a>What Are the Drawbacks of a Payment Aggregator?

Note: A payment aggregator is different from a<a href="https://www.skydo.com/blog/payment-gateway-for-international-payments-india"> payment gateway</a>.

What Businesses Need to Use a Payment Aggregator?

Startups, SMEs, e-commerce stores, subscription businesses, marketplaces, service providers, nonprofits, and mobile app businesses can use payment aggregators to accept multiple digital payment methods through a single integration without setting up separate payment arrangements with different banks.

Related Read:<a href="https://www.skydo.com/blog/freelance-payment-methods-india"> Freelance payment methods in India</a>.

Payment Aggregator vs Payment Gateway: What Is the Difference?

The key difference between a payment aggregator and a payment gateway is that a payment aggregator facilitates payment collection and merchant settlement, while a payment gateway primarily provides the technology for securely transmitting payment information and transaction responses without handling the underlying funds.

Payment gateways and aggregators differ by:

Also Read:<a href="https://www.skydo.com/blog/2d-vs-3d-payment-gateway"> 2D vs 3D payment gateways</a>

Payment Aggregator vs Payment Processor: Key Differences

The key difference is that a payment aggregator simplifies payment acceptance by onboarding multiple businesses under an aggregated account structure, while a payment processor provides the infrastructure that authorises, routes and processes transactions between the parties involved.

The differences become clearer when you compare how each model handles setup, risk, pricing and settlement.

How To Choose the Right Payment Aggregator for Your Business?

Choosing the right payment aggregator depends on seven factors, i.e., payment methods, pricing, integration, settlement speed, security, reporting and customer support.

Skydo as a Cross-Border Payment Aggregator (PA-CB) for Indian Exporters

Skydo is an RBI-authorised Payment Aggregator-Cross Border (PA-CB) built for Indian businesses and freelancers receiving payments from overseas clients. Unlike domestic payment aggregators that focus on INR collections, PA-CBs are specifically regulated to facilitate eligible cross-border payment transactions. <a href="https://www.skydo.com/">Skydo</a> received its full PA-CB authorisation in January 2026. It comes with:

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The Cash Reserve Ratio (CRR) is the percentage of a commercial bank's Net Demand and Time Liabilities (NDTL) that it must maintain as cash reserves with the Reserve Bank of India (RBI). Banks cannot use the CRR portion of their funds for lending or investment, which ensures that they maintain a minimum level of liquidity.

The RBI sets and revises the CRR based on prevailing economic and liquidity conditions. NDTL broadly includes a bank's demand and time liabilities, such as balances in savings accounts, current accounts, and fixed deposits.

CRR is one of several monetary policy tools available to the RBI. Others include the repo rate, Standing Deposit Facility, Statutory Liquidity Ratio (SLR), and open market operations. Banks do not earn interest on the cash balances maintained with the RBI as CRR. This makes CRR a cost for banks because the reserved funds cannot be deployed for lending or other income-generating activities.

<a></a>What Is the Current Cash Reserve Ratio in India (2026)?

The current Cash Reserve Ratio (CRR) in India is 3.00% of a bank's Net Demand and Time Liabilities (NDTL). The RBI reduced the CRR from 4.00% to 3.00% in 2025, with the final 3.00% rate taking effect from the reporting fortnight beginning November 29, 2025. The rate remains at 3.00% in 2026.

The RBI announced the 1 percentage-point reduction in June 2025 to ease liquidity conditions in the banking system. Instead of cutting the CRR from 4.00% to 3.00% at once, the RBI implemented the reduction in four equal 25-basis-point steps:

<a></a>How Is Cash Reserve Ratio Calculated?

The Cash Reserve Ratio (CRR) is calculated by applying the CRR percentage set by the Reserve Bank of India (RBI) to a bank's Net Demand and Time Liabilities (NDTL). NDTL is the money a bank owes to its customers through deposits and certain other liabilities. The formula is:

CRR amount = NDTL × CRR rate ÷ 100

Suppose a commercial bank has ₹500 crore in NDTL. This represents the bank's applicable demand and time liabilities, including amounts it owes to customers through deposits. With the RBI's current CRR at 3%, the bank must keep 3% of that ₹500 crore as cash with the RBI.

Step 1: Identify the amount subject to CRR NDTL = ₹500 crore This is the amount on which the CRR percentage is applied.

Step 2: Identify the CRR rate CRR = 3% This means the bank must maintain ₹3 as CRR for every ₹100 of applicable NDTL.

Step 3: Apply the formula ₹500 crore × 3 ÷ 100 = ₹15 crore

Step 4: Determine the CRR requirement The bank must therefore maintain ₹15 crore with the RBI as its CRR.

Step 5: See what remains ₹500 crore − ₹15 crore = ₹485 crore

So, in this simplified example, ₹15 crore must be maintained as CRR, while ₹485 crore remains available for the bank to deploy through lending or investment, subject to other regulatory requirements.

An Even Simpler Example If a bank has ₹1,00,000 in NDTL and the CRR is 3%, the same calculation becomes easier to see:

NDTL: ₹1,00,000 CRR: 3% CRR amount: ₹1,00,000 × 3 ÷ 100 = ₹3,000 Amount remaining: ₹1,00,000 − ₹3,000 = ₹97,000

In other words, at a 3% CRR, the bank must maintain ₹3,000 with the RBI for every ₹1,00,000 of NDTL.

Why Does a Cash Reserve Ratio (CRR) Matter?

The Cash Reserve Ratio (CRR) matters because it helps the RBI manage liquidity in the banking system while ensuring banks maintain a reserve to meet withdrawal demands. By affecting how much money banks can lend, CRR can influence credit availability, borrowing conditions, inflation, and economic activity. Besides, it helps in:

What Does it Mean For Indian Businesses if the CRR Changes?

When the Reserve Bank of India (RBI) changes the Cash Reserve Ratio (CRR), it changes how much money banks have available to lend. This can affect the cost and availability of credit for Indian businesses, particularly those that rely on bank loans for working capital or expansion.

<a></a>Example 1: Indian IT/Software Services Exporter to the US

An Indian IT company serving US clients may use a working capital or business loan to hire engineers, expand its delivery team, or upgrade its technology infrastructure.

<a></a>Example 2: Indian Textile Manufacturer Exporting to the US

A textile exporter may depend on short-term working capital loans to purchase cotton, pay factory workers, maintain production, and fulfil large orders from US buyers.

Note: The actual effect of a CRR change on loan rates depends on other factors too, including banks' funding costs, credit demand, RBI policy rates, and the borrower's credit profile.

What Are the Penalties If Banks Don't Maintain CRR?

If a bank fails to maintain the required Cash Reserve Ratio (CRR), the Reserve Bank of India (RBI) can charge penal interest on the shortfall under the RBI Act, 1934. The penalty depends on how long the shortfall continues and is calculated with reference to the RBI's Bank Rate.

The Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) are both reserve requirements set by the Reserve Bank of India (RBI), but they differ in what banks must hold, where those reserves are maintained, and how the funds can be used.

The biggest difference between CRR and SLR is what the bank holds and where it holds it.

With CRR, the bank must maintain the required cash balance with the RBI. The bank cannot use this cash for lending or investment, and it does not earn interest on the CRR balance.

With SLR, the bank maintains the required assets on its own balance sheet. These can include cash, gold, and eligible government securities. Government securities held for SLR can earn interest, so the assets are not simply idle funds.

Both CRR and SLR requirements are set by the RBI under the applicable banking regulations. They are not set by the Monetary Policy Committee (MPC), which is responsible for deciding the RBI's policy repo rate and other matters assigned to it under India's monetary policy framework.

<a></a>Which Banks Must Maintain CRR and SLR?

The applicable CRR and SLR requirements cover commercial banks operating in India, including public sector banks, private sector banks, foreign banks, and regional rural banks, subject to the specific provisions and exemptions applicable to each category.

In simple terms, CRR puts cash with the RBI, while SLR requires banks to keep eligible liquid assets themselves. Both limit how much of their funds banks can freely deploy, but they do so in different ways.

How Long Does an International Wire Transfer Take?

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What Is an Authorized Dealer (AD) Bank in Export?

An Authorized Dealer (AD) Category I bank is a bank licensed by the Reserve Bank of India (RBI) under FEMA to deal in foreign exchange. Every inward remittance from an international client must be received and processed through one.

For an Indian exporter, whether a goods exporter, a software agency, or a freelancer, the AD bank is the mandatory gateway. All foreign payments are credited, converted to INR, and reported to RBI through it.

Say a Pune-based IT services firm invoices a UK client £5,000. That payment cannot simply arrive in any bank account. It must flow into an account held at an RBI-authorized AD Category I bank, which then processes the conversion and files the required regulatory reports on the firm's behalf.

Why Does Your AD Bank Choice Matter More Than You Think?

Your AD bank choice matters more than most exporters realize because it directly controls three things that affect your bottom line every time a payment arrives: how much of the payment you actually receive, how quickly it settles, and whether your compliance documents are ready on time.

A salary account comes down to the interest rate. An AD bank is a recurring operational decision: every single export payment runs through it, so any inefficiency compounds over time.

What Are the Biggest Mistakes When Choosing an AD Bank?

The biggest mistakes when choosing an AD bank are defaulting to the bank where your salary or business account already sits, ignoring FIRC turnaround time, overlooking the conversion spread versus flat-fee difference, not checking whether the bank supports service exporters specifically, ignoring digital tracking capabilities, skipping a support quality check, and not asking about purpose code flexibility.

Mistake 1: Defaulting to Your Existing Bank Without Checking Export Suitability

Many exporters open their export current account at whichever bank they already use for daily operations. They never verify whether that branch or bank actively handles inward remittances and export documentation.

A bank well suited to a goods exporter, with LC handling, ECGC integration, and shipping bill linkage, may be poorly configured for a service exporter. A service exporter needs purpose code flexibility and fast FIRC issuance instead.

If you're an IT firm, agency, or freelancer, ask: "Do you support purpose code PP0014 (software services) and can I choose the correct code at the time of remittance receipt?" If the RM cannot answer this, that is a signal.

Mistake 2: Not Asking About FIRC Issuance Time

FIRC issuance timelines vary significantly across banks. Some issue within 1–2 working days, others take 1–2 weeks, and some require you to follow up manually every time.

A delayed FIRC directly delays GST refund claims. Exporters on LUT need FIRC to complete their refund documentation, and the refund cycle cannot close without it.

Before finalizing an AD bank, ask explicitly: "How many working days after the payment credits to my account will I receive the FIRC?" Get this in writing if possible.

Mistake 3: Treating Conversion Spread as a Fixed Cost

Most exporters compare banks on <a href="https://www.skydo.com/blog/international-bank-transfer-fees-freelancers-india">processing fees</a> but ignore the conversion spread. That spread is the gap between the mid-market rate and the rate the bank actually credits to your account.

At a 2% spread on a $5,000 receipt, you lose approximately ₹8,000–₹9,000 per transaction purely on conversion, with nothing shown as a fee on the statement.

With a spread, the cost is built into the rate and <a href="https://www.skydo.com/blog/intermediary-bank-meaning-and-hidden-fees">nothing appears as a fee</a> on the statement. Some modern payment platforms, like Skydo, use a flat fee model in place of a spread. With a flat fee, the cost is predictable, and it's typically lower for mid-to-large ticket payments.

Mistake 4: Ignoring Digital Tracking Capabilities

Banks that rely on RM calls and SWIFT copy submission for status updates create manual bottlenecks. Without calling someone, you cannot tell when a payment has arrived, is held up in compliance checks, or has been returned. That delays rectification when something goes wrong.

Mistake 5: Not Checking Support Responsiveness

Export payments can get stuck at any point: AML checks, purpose code mismatch, FEMA documentation queries. If your bank's forex support is routed through a national helpline or has a 48-hour response SLA, a stuck payment can cost you days of settlement delay. Ask specifically about the forex/trade finance support contact and turnaround before signing up.

Mistake 6: Not Asking About Purpose Code Flexibility

Purpose codes are RBI-defined codes that categorize what kind of export payment is being received (goods vs. services, and sub-types within each). If your AD bank auto-assigns purpose codes or does not let you choose at remittance stage, a wrong code can trigger EDPMS mismatches and compliance notices.

What Should You Check Before Finalising an AD Bank?

Before finalizing an AD bank, check six things: FIRC issuance time, digital payment tracking, conversion spread disclosure, purpose code support, minimum balance and fee structure, and support responsiveness for forex queries.

Use this checklist as a quick reference during bank evaluation meetings. It is a set of questions to ask and not a ranking of specific banks.

Weigh the criteria against your own transaction profile, because the priorities differ:

What Happens If You Need to Switch Your AD Bank?

Switching your AD bank is operationally costly and time-consuming, and it takes more than closing an account. The AD Code registered at customs and with DGFT is tied to your current bank, and changing it triggers a multi-step update process that can temporarily stall incoming payments.

An exporter who picks the wrong AD bank initially and decides to switch six months in may face 4–8 weeks of disruption to their payment receipt cycle. That makes the time you spend evaluating banks up front worth it.

How Does Skydo Work Alongside Your AD Bank?

Choosing the right AD bank still leaves the problems that come with every payment: FIRC that can take days or weeks, conversion spreads of 0.5%–3% with no upfront disclosure, status checks that mean chasing RMs and SWIFT copies, and compliance paperwork to close out afterward.

<a href="https://www.skydo.com/">Skydo</a> works alongside your existing AD bank and does not replace it. Skydo is a cross-border payment aggregator that handles the payment receipt layer, giving Indian exporters the speed, transparency, and documentation that AD banks typically lack.

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Which Banks Offer the Best EEFC Account in India?

SBI, HDFC Bank, ICICI Bank, Axis Bank and Kotak Mahindra are the banks compared in this article for an <a href="https://www.skydo.com/blog/eefc_account_overview_full_form_meaning_eligibility_benefits">Exchange Earners' Foreign Currency (EEFC) account</a>. An EEFC account is a current account held in foreign currency, opened with an authorized dealer in India, that lets exporters and foreign-exchange earners retain a portion of their inward remittances in the original currency instead of converting immediately to INR.

Indian freelancers and service exporters mainly use it to park foreign currency received from overseas clients temporarily and avoid an immediate forced conversion. They can then use those funds later to pay foreign invoices or import-related expenses.

Say a Bengaluru-based UX designer receives $3,000 from a US client. Instead of the bank converting it to INR the same day, the EEFC account holds it in USD for up to 180 days, giving the designer flexibility on when to convert.

What Should You Look for When Choosing the Best Bank for an EEFC Account?

The best bank for an EEFC account in India depends on five practical criteria: the currencies it supports, its conversion charges, whether it issues a Foreign Inward Remittance Certificate (FIRC) or Foreign Inward Remittance Advice (FIRA), how much you depend on a relationship manager (RM), and setup time.

Here is how the five banks compare on currencies supported, setup process, FIRC availability and RM dependency.

What Are the Key Rules and RBI Compliance Requirements for EEFC Accounts?

The key RBI rules for EEFC accounts are a 100% foreign exchange credit cap on eligible inflows, a mandatory conversion requirement within 180 days, a prohibition on interest earnings, and restrictions on permissible uses of the balance.

What Are the Real Benefits and Hidden Limitations of an EEFC Account?

The real benefits of an EEFC account are timing flexibility on currency conversion, reduced immediate conversion losses when rates are unfavorable, and the ability to use foreign currency balances to pay overseas vendors directly. The hidden limitations are zero interest, the bank's conversion spread at exit, RM-dependent operations, a hard 180-day deadline, and poor fit for freelancers who convert everything to INR right away.

How Does Skydo Help Freelancers Skip the EEFC Account Overhead?

An <a href="https://www.skydo.com/blog/eefc-account-vs-payment-platforms">EEFC account</a> puts a 180-day conversion deadline on your balance, applies a bank spread that is rarely disclosed upfront, and at many banks involves RM calls and manual paperwork.

<a href="https://www.skydo.com/">Skydo</a> helps freelancers skip that overhead by giving them free <a href="https://www.skydo.com/blog/virtual-accounts-vs-local-banks">virtual foreign-currency accounts</a> in USD, EUR, GBP, SGD, AUD, and CAD. You pay a fee per transaction, FIRA certificates are issued automatically, and there is zero RM dependency. Setup takes 10 to 15 minutes.

FIRA, the equivalent of FIRC, is issued automatically for every transaction on Skydo at no extra cost. If you need it for GST compliance and export documentation, it removes a common friction point.

Skydo is designed for Indian exporters (goods and services), freelancers with proper documentation, and Amazon sellers receiving payments from international clients.