Skydo: Simplifying Cross-Border Payments for Indian MSMEs
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Skydo, a payment platform founded by Srivatsan Sridhar and Movin Jain, is rapidly growing by offering a streamlined solution for Indian exporters to receive international payments. The platform distinguishes itself through flat-fee pricing, zero foreign exchange (forex) markups, and rapid 24-hour settlement – features designed to alleviate common pain points for Micro, Small & Medium Enterprises (MSMEs) engaged in global trade. As of late 2023/early 2024, Skydo is experiencing notable growth and aims to process $5 billion in annualised transaction volume within the next two years.
Addressing the Challenges of International Payments
Traditionally,receiving payments from overseas has been a complex and costly process for Indian businesses. Exporters often face high bank charges, unfavorable exchange rates, and lengthy settlement times. These hurdles can significantly impact cash flow and competitiveness. Skydo directly addresses these issues by:
* Local Collection Accounts: Enabling exporters to receive payments in their local currency across multiple countries. This reduces friction for buyers and minimizes currency conversion costs.
* Obvious Pricing: Offering a flat fee structure, eliminating hidden charges and providing predictable costs.
* Zero Forex Markup: Passing on wholesale exchange rates to customers, maximizing the value of their earnings.
* Fast Settlement: Ensuring funds are available within 24 hours, improving cash flow management.
Automation and Compliance
beyond payment processing, Skydo automates crucial compliance tasks, a significant benefit for exporters navigating complex regulations. The platform currently automates the creation of Foreign Inward Remittance Advice (FIRA) documentation, a key requirement for reporting international receipts to the Reserve Bank of India (RBI).It also provides tools for:
* Invoicing: Creating and sending professional invoices.
* Payment Reminders: Automating follow-ups for outstanding payments.
* Accounting Integration: Seamlessly connecting with popular accounting software to streamline financial management.
Growth and Regulatory Approval
Skydo has quickly gained traction within the Indian MSME landscape, currently serving over 30,000 businesses, freelancers, and startups across more than 50 cities. The platform supports transactions in over 32 currencies.
A key milestone for Skydo was being among the first companies to receive in-principle approval from the Reserve Bank of India (RBI) under the Payment Aggregator – Cross Border (PA-CB) framework. https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=20891 This approval signifies the RBI’s confidence in Skydo’s compliance and security measures, and positions the company for continued expansion in the cross-border payments space. The PA-CB framework aims to regulate and facilitate cross-border payments, ensuring a secure and transparent habitat for businesses.
Recent Performance and Future Outlook
skydo reports a fourfold increase in payment volume over the past year, demonstrating strong market demand for its services. the company’s aspiring target of $5 billion in annualised transaction volume within two years reflects its confidence in continued growth and its commitment to supporting Indian exporters. This growth is fueled by the increasing adoption of digital payment solutions and the government’s push to promote exports.
Key Takeaways:
* Skydo simplifies cross-border payments for Indian MSMEs with flat fees, zero forex markup, and 24-hour settlement.
* The platform automates compliance documentation like FIRA, reducing administrative burdens.
* Skydo’s RBI PA-CB approval validates its security and compliance standards.
* The company is experiencing rapid growth and aims for $5 billion in annual transaction volume within two years.
FAQ
Q: What is the PA-CB framework?
A: The Payment aggregator – Cross Border (PA-CB) framework is a regulatory framework established by the Reserve Bank of India (RBI) to govern the operations of payment aggregators facilitating cross-border payments. It aims to enhance openness, security, and customer protection in the cross-border payments ecosystem.
Q: what types of businesses can benefit from Skydo?
A: Skydo is designed for a wide range of businesses involved in international trade, including MSMEs, freelancers, and startups. Any business receiving payments from customers outside of India can potentially benefit from the platform’s features.
Q: How does Skydo ensure the security of transactions?
A: Skydo employs robust security measures, including encryption, fraud detection systems, and compliance with RBI regulations, to protect user data and ensure the security of transactions. The PA-CB approval further validates these security protocols.