Inside This Article
Financial services are changing fast. Technology and innovation are helping people and businesses send money across countries quickly and easily. These are called Fintech Cross-Border Payments.
As this grows, companies must deal with many rules and challenges. These include government regulations, currency risks, and making sure systems are safe. For NBFCs (Non-Banking Financial Companies) and fintech startups, knowing these rules is very important.
In this blog, we explore:
- The main compliance challenges fintechs face in different countries
- Big operational risks like currency changes and online threats
- Smart ways to grow safely in a world with many rules
All these shape the world of cross-border fintech.
What Are Cross-Border Fintech Transactions?
These are money services done using tech in different countries. Examples:
- Sending money between people or businesses (international payments)
- Giving loans to people in other countries
- Using crypto or blockchain for remittances
- Mobile wallets and digital banks
📊 Fact: In 2022, global cross-border payments hit $156 trillion. Fintechs are now a big part of this.
Compliance Rules Fintechs Must Follow
Fintechs that work in more than one country must follow many rules. Here are the big ones:
1. Licensing and Approvals
Different countries need different licenses:
- EU: EMI license
- US: MSB license (plus state rules)
- India: Follow RBI Forex Compliance rules under FEMA
🔗 RBI FEMA Guidelines
2. KYC and AML
To stop fraud and money crime, fintechs must:
- Check who their customers are (KYC)
- Report anything suspicious (AML)
Examples:
- EU: 6th AML Directive
- US: FinCEN
🔗 FinCEN - India: PMLA Act
3. Data Privacy and Transfers
Some countries want customer data to stay local:
- EU: GDPR rules
🔗 GDPR - India: New Data Protection Act (2023)
🔗 PIB India - China: PIPL limits sending data abroad
🔗 PIPL
4. Tax Rules and Reporting
Fintechs must follow tax rules like:
- FATCA (US citizens)
🔗 IRS - CRS (global reporting)
🔗 OECD CRS - India: GST applies to digital services
🔗 CBIC India
5. Avoid Sanctions
Don’t send money to banned people or countries:
- US OFAC List
🔗 US Treasury
UN Sanctions
🔗 UN
Read More: Fintech Regulatory Compliance: 2025 Guide
Big Challenges for Cross-Border Fintechs
1. Different Rules in Each Country
Each country has its own laws. No one-size-fits-all. 🔗 MAS Singapore
2. Currency and Payment Delays
Money takes days to move across borders. Exchange rates can change suddenly. Some fintechs use blockchain to fix this. 🔗 BIS Report
3. Cyber Attacks and Fraud
Online attacks are rising. In 2022, fintech saw a 238% increase in cyber threats. 🔗 VMware Cyber Report
4. Cultural and Language Barriers
What works in one country may not work in another. Apps must adapt to local needs.
Tips for Fintechs Going Global
✅ Work With Local Experts
Know rules like RBI Forex Compliance before entering a new market.
✅ Use RegTech Tools
Automate KYC/AML with tools like Onfido, Trulioo.
✅ Partner With Local Firms
Partnering with NBFCs or banks saves time and cost.
✅ Test In Sandboxes
Use RBI, UK, or Singapore sandboxes to try out services.
🔗 RBI Sandbox
✅ Build Flexible Systems
Make tech that works with many laws and user needs.
Final Thoughts
Fintech Cross-Border Payments are the future. But fintechs must follow the rules to grow safely. From licenses to tax to cyber safety—everything matters.
At NBFC Advisory, we help fintechs and NBFCs grow globally. We guide you on RBI Forex Compliance, KYC, taxes, and more.
Our Article: How to Start a Fintech Company in India: A Step-by-Step Guide
👉 Connect with us today to streamline your cross-border fintech journey.
📞 Call NBFC Advisory: +91 93287 18979
🌐 Visit: nbfcadvisory.com
