India’s Cashfree Payments Introduces Lending Solution to Help Financial Services Firms

Cashfree Payments, India’s payments and API banking solutions company, has rolled out their Disbursement and Collections solution for Lending, “to enable NBFCs and their partner LSPs to comply with the new Digital Lending guidelines.”

Cashfree Payments will “facilitate both digital lending and co-lending use cases through their solution.”

The RBI has “prescribed that all fund-flows relating to loan disbursement and repayment must be directly between the bank account of the lender and borrower, without any pass-through or pool account of any third party.”

However, there are limited carve-outs “to this general rule for: (i) co-lending transactions entered into by banks and NBFCs in accordance with the existing regulatory instructions issued by the RBI; (ii) disbursements covered exclusively under the statutory or regulatory mandate of the RBI or any other regulator; and (iii) disbursements to third parties pursuant to specific end-uses of the loans.”

Cashfree Payments’ solution will “facilitate creation of lender escrows, seamless loan disbursements direct to borrowers, managing multiple LSP partnerships, efficient reconciliation, borrower identity & bank account verification.”

Cashfree Payments also “enables repayments through e-NACH, UPI AutoPay in compliance with the guidelines.”

Akash Sinha, Co-founder and CEO of Cashfree Payments said:

“The digital lending and co-lending segments in India have grown very rapidly driven by the high fintech adoption in the country. With the exponential growth, there is a strong need to enable compliant and scalable solutions for loan disbursals, loan repayment, KYC verification among other things. We are delighted to announce that we are now offering our disbursal and repayment solutions, compliant to the new Digital Lending Guidelines. As a front-runner in the API Banking & Payments space, we have strived to provide this solution at a critical juncture to ensure continuity and growth for our merchants while keeping compliance at center stage.’

With over 50% market share among payment processors, Cashfree Payments today claims that it “leads the way in bulk disbursals in India with its product Payouts.”

Recently, India’s largest lender, SBI “invested in Cashfree Payments underscoring the company’s role in building a robust payments ecosystem.”

Cashfree Payments claims it works closely “with all leading banks to build the core payments and banking infrastructure that powers the company’s products and is also integrated with major platforms such as Shopify, Wix, Paypal, Amazon Pay, Paytm and Google Pay.”

Apart from India, Cashfree Payments products are “used in eight other countries including the USA, Canada and UAE.”

As noted in the update, Cashfree Payments is a payment and API banking solutions company.

It provides full-stack payments solutions “enabling businesses in India to collect payments and make payouts via all available methods with simple integration.”

Cashfree Payments’ offerings “include an advanced and easy way to integrate payment gateways, a split payment solution for marketplaces, bank account verification API, and Auto Collect — a virtual account solution to match inbound payments to customers.”

Founded by IIIT Hyderabad alumnus Akash Sinha and IIT Kharagpur graduate Reeju Datta, Cashfree claims it is “among the leading payment service providers in India processing transactions worth USD 40 Billion annually.”

It has “leveraged technology to lead payment disbursals in India with more than 50% market share among payment processors.”

Cashfree Payments “enables more than 1,50,000 businesses with payment collections, vendor payouts, wage payouts, bulk refunds, expense reimbursements, loyalty and rewards.”

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