India-based cross-border payments company Xflow has secured $16.6 million in Series A funding to expand its payment infrastructure services for Indian exporters. The funding round, announced via LinkedIn on Tuesday, February 24, attracted notable investors including PayPal Ventures, Stripe, and General Catalyst. This latest investment milestone brings the company’s valuation to $85 million, according to Xflow Head of Operations Rahul Unnikrishnan.
The funding announcement coincided with another significant development for the company. Xflow received PA-CB authorization for exports and imports from the Reserve Bank of India, the country’s central bank and banking regulator. This regulatory approval strengthens the company’s position in facilitating cross-border transactions for Indian businesses.
Building Cross-Border Payment Infrastructure for Indian Exporters
Founded in 2021, Xflow has focused on addressing inefficiencies in India’s cross-border business-to-business payment systems. According to co-founder Anand Balaji in an interview with TechCrunch, cross-border B2B payments remained outdated compared to India’s Unified Payments Interface, the country’s popular instant payment system. The company has spent the past four years developing infrastructure to modernize these processes.
Unnikrishnan emphasized the company’s gradual approach in a LinkedIn post. He described the journey as steady, focused work involving building real cross-border infrastructure, earning customer trust, tightening compliance, and improving the product incrementally. The company’s mission centers on simplifying cross-border payments for Indian exporters through technological innovation.
How FinTechs Are Transforming Cross-Border Payments
FinTech companies have fundamentally reshaped cross-border payments by treating them as products rather than processes, according to PYMNTS reporting from February 17. These companies simplified onboarding procedures, clarified pricing structures, and reduced settlement times by eliminating correspondent banking complexity. Additionally, application programming interfaces allowed payments to be embedded into software platforms, enabling new use cases and lowering barriers for smaller companies.
However, cross-border payments remain a flashpoint for anti-money laundering regulations, PYMNTS reported on January 21. Each international transaction creates a chain of handoffs across banks, payment service providers, wallets, and local payment rails. These multiple touchpoints can introduce opacity, latency, and compliance risks that companies must carefully manage.
Navigating Regulatory Challenges in Cross-Border Payment Systems
The complexity of cross-border payments extends beyond technology to regulatory frameworks. According to Emanuela Saccarola, Citi’s head of cross-border payments services, in an interview with PYMNTS in November, the term “cross-border” signifies payments traversing different legal entities, jurisdictions, regulatory frameworks, and sanction regimes. In some cases, foreign exchange currency controls also apply.
These jurisdictional differences introduce multiple challenges for payment providers. Companies must navigate liquidity management, multiple time zones, varying cut-off times, and compliance with regulations that may not always align across borders. Successfully addressing these challenges requires sophisticated infrastructure and regulatory expertise.
The fresh capital will likely support Xflow’s expansion efforts and product development as the company works to capture a larger share of India’s export payment market. The company has not disclosed specific timelines for new product launches or geographic expansion plans following this funding round.