What Are the Settlement Timelines for Cross-Border Payment Aggregators Under RBI Rules?
- Author:
- Manoj Sharma
- Verified by:
- Editorial team
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Short answer
The PA-CB settlement timeline is not a fixed number of days under current RBI rules. RBI's 2025 Master Direction on Payment Aggregators leaves the credit to the merchant's account to the agreement between the aggregator and the merchant. That agreement must be fair and equitable. It must also state the settlement timelines transparently.
| Applies to | Governed by | Deadline | Penalty | Last verified |
|---|---|---|---|---|
| Payment aggregators that handle inward cross-border payments (PA-CB), the AD Category-I banks that hold their Inward Collection Accounts, and Indian exporters onboarded as merchants | Master Direction on Regulation of Payment Aggregator (PA), RBI/DPSS/2025-26/141 dated 15 September 2025 (Table 1 and paragraphs 11, 13, 16 and 18), read with the FEMA (Export and Import of Goods and Services) Regulations, 2026 for the exporter's own deadlines | No fixed number of days for PA-CB settlement to the merchant; the agreement sets it. The exporter must still realise services exports within nine months of the invoice date, or twelve months if invoiced or settled in rupees, unless the AD bank extends it | The Master Direction sets no penalty or compensation for exporters tied to settlement speed. If export proceeds stay unrealised for over one year past the due or extended date, further exports need full advance or an irrevocable letter of credit | 8 Oct 2026 |
What do RBI rules require on settlement timelines for cross-border payment aggregators?
RBI rules require a cross-border payment aggregator to settle funds to the merchant within the timeline written in its agreement with that merchant. The current Master Direction does not fix a T+1 or seven-day limit for PA-CBs. It sets conditions on how the money is held before settlement and where it can be paid.
- Agreement: Credit to the merchant's account is "as per the agreement between the PA and the merchant", and the agreement should be fair, equitable and must transparently mention the settlement timelines (Table 1, Timelines, Master Direction on Payment Aggregators).
- Day-end balance: The day-end balance in the escrow account cannot be less than the amount realised towards funds payable to merchants but not yet settled to them (Table 1). Unsettled merchant money must stay in the account.
- Own account: The aggregator must have validation mechanisms so that funds due to a merchant are credited only to the merchant's bank account (paragraph 13(g)).
- Merchant list: The aggregator gives the escrow bank a list of onboarded merchants and updates it before initiating settlement. The bank must ensure payments go only to eligible merchants (paragraph 18(a)).
- Currency: Settlement in currencies other than rupees is allowed only for Indian exporters directly onboarded by the PA-CB facilitating inward transactions (paragraph 11(i)).
- No interest: No interest is payable on balances in an Inward Collection Account (Table 1, Interest-bearing), so funds waiting for settlement earn nothing for the exporter.
- Bank change: If an aggregator moves its escrow account to another bank, the move must be time-bound and must not affect the payment cycle to merchants (paragraph 18(f)).
The PA-CB rules govern the provider and its bank. The exporter's own deadlines come from the FEMA export regulations, and the realisation period for services counts from the invoice date, so the settlement date does not reset that period.
Who do the PA-CB settlement timeline rules apply to?
The PA-CB settlement timeline rules apply to the aggregator that collects the payment and to the AD Category-I bank that holds its collection account. Exporters are bound by the agreement they sign with the aggregator, and the route by which they were onboarded decides whether they can be settled in foreign currency.
| Entity type | Applicable | Why | Best for |
|---|---|---|---|
| Non-bank PA-CB handling inward payments | Yes | Must keep collected funds in an Inward Collection Account (InCA) with an AD Category-I scheduled commercial bank and settle as per the merchant agreement (paragraph 16(a) and Table 1) | Exporters reading a provider's settlement terms |
| Bank acting as a payment aggregator | Yes, without separate authorisation | A bank does not require authorisation to carry out PA business (paragraph 5(a)); the settlement terms still come from its merchant agreement | Exporters using their own bank's online collection |
| AD Category-I bank holding the InCA | Yes | Must ensure FEMA requirements are met and pay only eligible merchants for permitted debits (paragraphs 11(e) and 18(a)) | Understanding who checks a payout before it reaches you |
| Exporter onboarded directly by the PA-CB | Yes, through the agreement | Settlement timeline is set in its agreement; may be settled in a foreign currency (paragraph 11(i)) | Freelancers who want foreign currency credited |
| Exporter onboarded through a marketplace or another aggregator | Yes, through the onboarding entity | The aggregator that onboards the merchant does its due diligence (paragraph 13(d)); non-rupee settlement is limited to directly onboarded exporters (paragraph 11(i)) | Sellers paid by an online marketplace |
| Card payment where the card network handles the foreign exchange settlement and the aggregator receives rupees | No | Not part of PA-CB activity (Note 2 to paragraph 4(i)(ii)) | Merchants taking foreign cards through a domestic acquirer |
| Existing PA-CB that applied by 30 April 2024 with a decision pending | Old OPGSP circulars not repealed for it | The repeal of the OPGSP circulars does not apply to such an entity until RBI decides (paragraph 19) | Exporters whose provider is listed as an existing PA-CB on RBI's application status page |
How does settlement of an export payment through a PA-CB work, step by step?
Settlement of an export payment through a PA-CB runs from the buyer's payment to the aggregator's Inward Collection Account, then to the exporter's own bank account on the agreed timeline. The exporter's AD bank then closes the export entry in EDPMS using information the aggregator provides.
- At onboarding, the exporter signs an agreement that must state the settlement timeline (Table 1) and cover refunds, failed transactions, reconciliation and grievance redressal (paragraph 8(b)).
- The overseas buyer pays through the aggregator, and the payment is to be identified as a cross-border transaction from timelines RBI specifies (paragraph 11(g)).
- The proceeds are credited to the aggregator's Inward Collection Account, kept separately for rupees and for each foreign currency (Table 1). Inward and outward funds are never mixed or netted (paragraph 11(a)).
- Any currency conversion is done only with an Authorised Dealer (paragraph 11(d)).
- On the agreed date, the aggregator pays the exporter from the InCA, which is a permitted debit, into the exporter's own bank account (Table 1 and paragraph 13(g)).
- The aggregator provides the documents or information the exporter's AD bank needs to close the EDPMS entry (paragraph 11(h)).
- The AD bank credits the exporter after satisfying itself that the transaction is genuine and simultaneously closes or updates the EDPMS entry (FEMA Regulation 4(2)).
Does T+1 settlement still apply to cross-border payment aggregators?
T+1 settlement no longer applies as an RBI rule for PA-CBs. The 2020 payment aggregator guidelines set T+1 style limits and also governed the domestic leg of import and export payments (paragraphs 2.2 and 8.4). The 2023 PA-CB circular applied other PA instructions to PA-CBs (paragraph 8.3). Both circulars were repealed by the 2025 Master Direction (Annexure 3).
- Tp: date of charge or debit to the customer's account; funds to reach escrow on Tp+0 or Tp+1 basis.
- Ts: date the merchant tells the aggregator about shipment; Ts+1 applied where the aggregator delivered.
- Td: date the merchant confirms delivery; Td+1 applied where the merchant delivered.
- Tr: date the merchant's refund period expires; Tr+1 applied where the agreement let the aggregator hold funds until then.
What was the seven-day rule for OPGSP export settlement?
The seven-day rule required balances in the OPGSP NOSTRO collection account to be credited to the exporter's account in India immediately on the importer's confirmation, and never later than seven days from credit to that account (2010 circular, paragraph 2(vi)). The 2015 circular kept seven days for exports (paragraph 4(iii)). These circulars were repealed in 2025, except for saved entities (paragraph 19).
How do refunds and chargebacks affect PA-CB settlement?
Refunds and chargebacks can reduce or reverse what is settled to the exporter. Refunds initiated by merchants for failed, disputed, returned or cancelled transactions are permitted credits to the collection account, and refunds to payers are permitted debits (Table 1). Reversed and refund transactions are routed back through the escrow account unless the merchant manages the refund directly, and customers' chargeback rights remain unaffected (paragraph 18(h)).
- Refunds go to the original method of payment unless the payer asks for another mode belonging to the payer (paragraph 10(f)).
- The aggregator's dispute mechanism must include timelines for processing refunds and follow RBI's TAT instructions for failed transactions (paragraph 8(a)).
Can a PA-CB hold export proceeds until a refund period ends?
The current Master Direction has no separate rule on holding funds until a refund period ends, so any holding period depends on the merchant agreement and its stated settlement timeline (Table 1). The repealed 2020 guidelines had allowed this where the agreement provided for it, with payment no later than Tr+1 (paragraph 8.4.3).
What are the key dates and deadlines around a PA-CB export settlement?
The key dates around a PA-CB export settlement are the agreed settlement date, the EDF deadline for services, the EDPMS closure at the time of credit and the nine-month realisation period. Only the first comes from the payment aggregator rules; the rest come from the FEMA export regulations in force from 1 October 2026.
| Trigger event | Timeline | Rule | Best for |
|---|---|---|---|
| Funds collected in the InCA | Credited to the merchant as per the PA and merchant agreement | Table 1, Master Direction | Any exporter paid through a PA-CB |
| Services invoice raised | EDF within 30 days from the end of the invoice month; services other than software may file on or before the date of receipt of payment; AD bank may extend | FEMA Regulation 3(2) | Freelancers and service exporters |
| EDF received by the AD bank | AD bank enters service EDF details in EDPMS within five working days | FEMA Regulation 18(1)(b) | Tracking whether your EDF is on record |
| Proceeds credited by the AD bank | EDPMS entry closed or updated at the same time; invoices up to Rs 10 lakh can be closed on the exporter's declaration, including quarterly bulk declarations | FEMA Regulation 4(2) | Small exporters with many invoices |
| Services invoice date | Full value realised within nine months, or twelve months if invoiced or settled in rupees; AD bank may extend | FEMA Regulation 5(1) | Exporters whose provider settles slowly |
| One year past the due or extended date | Further exports only against full advance or an irrevocable letter of credit | FEMA Regulation 13 | Exporters with long-pending receipts |
| Escrow account rules for PAs | Table 1 requirements to be met by 31 December 2025 | Paragraph 16(a) | Background on when the current account rules took hold |
| Quarter end for the PA-CB | Bankers' certificate on InCA and OCA debits and credits by the 15th of the following month | Annexure 2 | Understanding the provider's reporting to RBI |
What happens if a PA-CB settles export proceeds later than the agreed timeline?
If a PA-CB settles later than the agreed timeline, the Master Direction itself names no compensation payable to the exporter for that delay. The remedy lies in the agreement and the aggregator's grievance process. Meanwhile the exporter's FEMA realisation period keeps running from the invoice date.
- Realisation clock: Services exports must be realised within nine months of the invoice date, or twelve months if invoiced or settled in rupees (FEMA Regulation 5(1)). A delayed payout does not pause this period.
- Open EDPMS: The AD bank marks off the EDPMS entry only after ensuring that the export value has been realised (FEMA Regulation 18(1)(g)), so the entry stays open until the credit arrives. See EDPMS closure.
- Grievance route: Every aggregator must appoint an officer for merchant issues and display that officer's details and an escalation matrix on its website (paragraph 8(d)).
- Policy disclosure: The aggregator must publish its merchant policies and other terms on its website or app (paragraph 8(c)), which is where the settlement terms should be visible.
- Failed payments: RBI's TAT framework sets outer limits for resolving failed transactions, but it covers only domestic transactions where both originator and beneficiary are in India (TAT circular, paragraph 4 and Annex note 7). For a delayed cross-border payout, rely on the agreement.
- Long overdue: If proceeds remain unrealised for over one year after the due or extended date, further exports need full advance or an irrevocable letter of credit (FEMA Regulation 13). See export proceeds not realised.
Ask the aggregator in writing for the settlement timeline in your agreement and the status of the delayed payout, then use its escalation matrix. If the realisation deadline is close, ask your AD bank for an extension under FEMA Regulation 5 before it passes. See extension of the export realisation period.
Which RBI rule sets the settlement timeline for cross-border payment aggregators?
The RBI rule that sets the settlement timeline for cross-border payment aggregators is Table 1 of the Master Direction on Regulation of Payment Aggregator dated 15 September 2025. It leaves the timeline to the merchant agreement. The older T+1 and seven-day limits sat in circulars that the Master Direction repealed.
| Circular or regulation | Clause | Date | Plain meaning | Best for |
|---|---|---|---|---|
| Master Direction on Regulation of Payment Aggregator (PA) | Table 1, Timelines; paragraph 16(a) | 15 September 2025 | Credit to the merchant as per a fair, transparent agreement; InCA held with an AD Category-I bank | Reading your settlement terms |
| Master Direction on Regulation of Payment Aggregator (PA) | Paragraphs 11(h), 11(i), 13(g), 18(a), 18(f), 18(h) | 15 September 2025 | EDPMS support, foreign currency settlement for direct merchants, own-account payout, merchant list, bank moves, refunds | Exporters checking how payouts are controlled |
| Master Direction on Regulation of Payment Aggregator (PA) | Paragraphs 19 and 21, Annexure 3 | 15 September 2025 | Repeals the OPGSP circulars (with a saving for pending PA-CB applicants), the 2020 and 2021 PA guidelines and the 2023 PA-CB circular | Knowing which older timelines are gone |
| Guidelines on Regulation of Payment Aggregators and Payment Gateways | Paragraphs 1.2, 2.2, 8.3 and 8.4 | 17 March 2020 | Tp, Ts, Td and Tr based T+1 limits, including for the domestic leg of import and export payments; now repealed | Understanding older T+1 references |
| Regulation of Payment Aggregator - Cross Border | Paragraphs 5.4, 8.3 and 8.4 | 31 October 2023 | ECA proceeds settled only to the merchant; other PA instructions applied to PA-CBs; now repealed | Background on the first PA-CB rules |
| A.P. (DIR Series) Circular No. 17 | Paragraph 2(vi) | 16 November 2010 | OPGSP export proceeds to reach the exporter within seven days of credit to the NOSTRO collection account | History of the seven-day rule |
| A.P. (DIR Series) Circular No. 16 | Paragraphs 3(ii) and 4(iii) | 24 September 2015 | Seven days for export proceeds; two days for import payments to overseas sellers | History of OPGSP settlement limits |
| FEMA (Export and Import of Goods and Services) Regulations, 2026 | Regulations 3(2), 4(2), 5, 13 and 18(1) | In force 1 October 2026 | Exporter's EDF, EDPMS closure, realisation period and consequences of non-realisation | Exporters paid through any route |
| A.P. (DIR Series) Circular No. 20 | Paragraphs 4 and 7 | 16 January 2026 | Supersedes the Master Direction on Export of Goods and Services from 1 October 2026 | Knowing which export rules are current |
What mistakes do exporters make about PA-CB settlement timelines?
- Assuming T+1: Quoting T+1 as an RBI guarantee. The T+1 rules sat in the 2020 guidelines, repealed by the 2025 Master Direction (Annexure 3).
- Seven-day rule: Relying on the OPGSP seven-day limit. Those circulars are repealed except for saved entities with pending PA-CB applications (paragraph 19). See PA-CB vs OPGSP.
- Unread terms: Not reading the settlement clause before onboarding. The agreement is where the timeline is fixed (Table 1).
- Wrong clock: Treating the payout date as the start of the realisation period. For services it runs from the invoice date (FEMA Regulation 5(1)). See export realisation period.
- Third-party payout: Asking for proceeds to go to a relative's or partner's account. Funds due to a merchant go only to the merchant's bank account (paragraph 13(g)), and third-party payouts are not a permitted InCA debit (Table 1).
- Currency expectation: Expecting foreign currency credit when onboarded through a marketplace. Non-rupee settlement is only for directly onboarded exporters (paragraph 11(i)).
- Skipping EDF: Waiting for the payout before filing the EDF for software exports. The EDF is due within 30 days from the end of the invoice month (FEMA Regulation 3(2)). See EDF form.
How did we verify this?
Every rule, deadline and form on this page is linked to its official source, checked on the dates below.
- Master Direction on Regulation of Payment Aggregator (PA), RBI/DPSS/2025-26/141, Paragraphs 4(i)(ii) Note 2, 5(a), 8, 10(f), 11, 13(d), 13(g), 16(a), 18, 19, 21, Table 1, Annexures 2 and 3 (checked 8 Oct 2026)
- Regulation of Payment Aggregator - Cross Border (PA - Cross Border), RBI/2023-24/80, Paragraphs 5.4, 8.3 and 8.4 (checked 8 Oct 2026)
- Guidelines on Regulation of Payment Aggregators and Payment Gateways, RBI/DPSS/2019-20/174 (updated 17 November 2020), Paragraphs 1.2, 2.2, 8.3 and 8.4 (checked 8 Oct 2026)
- A.P. (DIR Series) Circular No. 17: Processing and Settlement of Export related receipts facilitated by Online Payment Gateways, Paragraph 2(vi) (checked 8 Oct 2026)
- A.P. (DIR Series) Circular No. 16: Processing and settlement of import and export related payments facilitated by OPGSPs, Paragraphs 3(ii) and 4(iii) (checked 8 Oct 2026)
- Harmonisation of Turn Around Time (TAT) and customer compensation for failed transactions using authorised Payment Systems, RBI/2019-20/67, Paragraphs 4 to 6 and Annex general instruction 7 (domestic transactions only) (checked 8 Oct 2026)
- Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026 (amended up to 22 September 2026), Regulations 3(2), 4(2), 5(1), 13 and 18(1) (checked 8 Oct 2026)
- A.P. (DIR Series) Circular No. 20: Export and Import of Goods and Services, RBI/2025-26/194, Paragraphs 4 and 7 (checked 8 Oct 2026)
- RBI: Status of applications received from Payment Aggregators (as on 01.10.2026), Table D and PA-CB entries (checked 8 Oct 2026)
Frequently asked questions
Is the PA-CB settlement timeline the same as the FEMA export realisation period?
The PA-CB settlement timeline is not the same as the FEMA export realisation period. The settlement timeline is set in your agreement with the aggregator. The realisation period is nine months from the invoice date for services, or twelve months if invoiced or settled in rupees, and your AD bank can extend it.
Does a PA-CB pay interest on export proceeds held in the Inward Collection Account?
A PA-CB does not pay interest on export proceeds held in the Inward Collection Account. Table 1 of RBI's Master Direction says no interest shall be payable on InCA balances. The interest exception for the core portion applies only to the domestic escrow account, so money waiting for settlement earns nothing for the exporter.
Can a PA-CB settle export proceeds to a family member's bank account?
A PA-CB cannot settle export proceeds to a family member's bank account on your instruction. Paragraph 13(g) of the Master Direction requires funds due to a merchant to reach the merchant's own bank account. Table 1 also excludes third-party payouts from permitted InCA debits. Separate FEMA rules govern third-party receipts through AD banks.
When does the AD bank close the EDPMS entry for a PA-CB receipt?
The AD bank closes or updates the EDPMS entry for a PA-CB receipt at the same time it credits your account, under FEMA Regulation 4(2). The aggregator must supply the documents or information the bank needs. For invoices up to Rs 10 lakh, the bank can close the entry based on your declaration of realisation.
Can a PA-CB pause settlement while moving its InCA to another bank?
A PA-CB moving its InCA or other escrow account to another bank must do it in a time-bound manner without affecting the payment cycle to merchants, under advice to RBI. This is paragraph 18(f) of the Master Direction. A bank change is therefore not a permitted reason to stop settling merchants on the agreed timeline.
Who settles an exporter onboarded through a marketplace under the PA-CB rules?
An exporter onboarded through a marketplace or another aggregator is paid through that onboarding entity. The InCA can pay another PA as part of the transaction flow for ultimate settlement to the merchant. Settlement in a foreign currency is allowed only for exporters directly onboarded by the PA-CB, so such exporters are settled in rupees.
Where can an exporter check whether a PA-CB is authorised or still awaiting a decision?
An exporter can check a PA-CB on RBI's page listing the status of applications from payment aggregators under the Payment and Settlement Systems Act, 2007. It shows existing and new PA-CBs in separate tables. The status matters because the old OPGSP circulars still apply to existing applicants with pending decisions.