Bengaluru-based fintech startup Skydo has secured in-principle approval from the International Financial Services Centres Authority (IFSCA) to operate as a Payment Service Provider (PSP) at GIFT City in Gujarat. This landmark approval makes Skydo one of the first cross-border payment specialists to establish a presence within India’s only International Financial Services Centre (IFSC). The move is expected to significantly lower transaction costs and improve efficiency for Indian MSMEs and freelancers engaged in global trade.
Expanding Cross-Border Payment Capabilities
The in-principle approval allows Skydo to build a comprehensive cross-border payments platform within the GIFT City ecosystem. Under the IFSCA (Payment Services) Regulations, 2024, a PSP license enables several critical financial services that were previously restricted for domestic fintech players. Skydo can now offer:
- Multi-currency collection accounts for Indian exporters, allowing them to receive payments in over 30 global currencies.
- E-money issuance, which allows businesses to hold and manage funds in digital wallets before converting them to local currency.
- Merchant acquisition services, facilitating smoother transactions between international buyers and Indian service providers.
This approval complements Skydo’s recent regulatory milestones with the Reserve Bank of India (RBI). Earlier in 2026, the company received final authorization as a Payment Aggregator-Cross Border (PA-CB) for inward remittances. More recently, it secured RBI approval for outward payment flows, positioning it as a full-stack player capable of handling both export earnings and international business payments.
Regulatory Framework: IFSCA and GIFT City
The International Financial Services Centres Authority (IFSCA) is the statutory unified regulator for all financial services within the IFSC. Established in April 2020 under the IFSCA Act, 2019, it is headquartered in Gandhinagar, Gujarat. The authority exercises the powers of domestic regulators such as the RBI, SEBI, IRDAI, and PFRDA within the jurisdictional limits of the IFSC.
GIFT City is India’s first operational smart city and houses the country’s only International Financial Services Centre. Under the Special Economic Zones (SEZ) Act, 2005, units within the IFSC are treated as non-residents or deemed foreign territories. This unique status allows them to operate in foreign currencies and benefit from a more flexible regulatory environment compared to the domestic market.
The IFSCA (Payment Services) Regulations, 2024, notified on January 29, 2024, provide the legal basis for the licensing of PSPs. These regulations aim to benchmark India’s offshore financial services against global hubs like Singapore and the United Kingdom. Entities seeking a PSP license must maintain a minimum net worth of USD 100,000 at commencement, which must increase to USD 200,000 within three years of operation.
Significance for Indian MSMEs and Freelancers
Traditionally, Indian MSMEs and freelancers have faced high costs when receiving international payments. Traditional banks and global payment platforms often charge hidden forex markups ranging from 2 percent to 5 percent, in addition to fixed transaction fees. Skydo aims to eliminate these opaque charges by offering mid-market exchange rates and transparent flat-fee pricing.
The presence of specialized PSPs in GIFT City allows for faster settlements and better compliance management. For instance, Skydo provides automated Foreign Inward Remittance Advice (FIRA), which is essential for Indian businesses to claim GST benefits and comply with RBI guidelines.
Authorized Payment Services in IFSC
The IFSCA Regulations, 2024 define five specific categories of payment services that authorized entities can provide from the IFSC.
| Service Category | Description |
|---|---|
| Account Issuance | Operating payment accounts such as digital wallets. |
| E-money Issuance | Issuing stored value for making payment transactions. |
| Escrow Services | Holding funds on behalf of parties in a transaction. |
| Cross-border Transfers | Facilitating the movement of funds across international borders. |
| Merchant Acquisition | Enabling businesses to accept payments from customers. |
By securing approval for these services, Skydo can now facilitate a more integrated payment journey. This is particularly relevant for the Gig Economy and the Digital Export sector, which have become major contributors to India’s foreign exchange earnings.
Key Takeaways
- Skydo has received in-principle approval from the IFSCA to operate as a Payment Service Provider (PSP) in GIFT City.
- The International Financial Services Centres Authority (IFSCA) was established in April 2020 under the IFSCA Act, 2019, and is based in Gandhinagar.
- GIFT City is India’s first International Financial Services Centre (IFSC) and is considered a deemed foreign territory for regulatory purposes.
- The IFSCA (Payment Services) Regulations, 2024 define five categories of authorized payment services, including e-money issuance and escrow services.
- Skydo is one of the first fintech firms to hold both GIFT City PSP approval and RBI PA-CB (Payment Aggregator-Cross Border) authorization.
- The minimum net worth required for a Regular PSP in the IFSC is USD 100,000 at the time of commencement.
