Stripe becomes invite-only in India amid regulatory changes

Fintech

• ByStartup History | June 1, 2024

Californian payments giant Stripe has announced a significant change to its India operations, temporarily switching to an invite-only model. This decision is attributed to the changing regulatory landscape in the country, which poses challenges for Stripe in ensuring quick launches and seamless onboarding processes for new users.

In a statement regarding the move, Stripe emphasized the dynamic nature of the Indian regulatory environment and its commitment to providing a consistent user experience globally. However, current regulatory restrictions prevent Stripe from providing quick and easy onboarding to new users in India.

Effective immediately, new businesses in India looking to join the Stripe platform will no longer be able to register directly through the company’s website. Instead, they must request an invitation to access Stripe services.

This change underscores Stripe’s focus on serving larger customers with established relationships, aligning its operations with the stringent Know Your Customer (KYC) norms imposed on domestic payment aggregator companies by the Reserve Bank of India (RBI).

Nitesh Singhal, founder of financial technology consulting firm Aryaa Advisors, commented on Stripe’s strategic move, highlighting the challenges that KYC requirements pose in the country’s payments landscape. Singhal emphasized the attractiveness of cross-border payments to Stripe, noting their potential for higher margins compared to domestic transactions.

Singhal further noted that Stripe is positioning itself as a significant player in cross-border payments aggregation, especially after new regulations governing cross-border commerce come into force.

Stripe plans to reopen its services to a wider audience in India by the second half of 2025, following necessary infrastructure upgrades to bring them in line with regulatory requirements.

In a blog post about the changes, Stripe confirmed the temporary nature of the move to an invite-only model in India. The company emphasized its commitment to supporting a select number of businesses, with a particular focus on facilitating international expansion.

When it comes to the verification process, Stripe has put in place stringent measures to ensure compliance with RBI guidelines. These include verification of payout bank accounts used for settlement purposes and additional KYC details for unregistered sole proprietorships.

The announcement comes after Stripe began slowing its onboarding process for new users in India from December 1 last year, along with a thorough review of existing accounts.

Stripe’s Indian branch, operating since 2016, received final approval from the RBI in January to act as a payments aggregator. Stripe India accounts allow users to accept international payments in over 135 foreign currencies.

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