Reserve Bank of India has published draft regulatory guidelines for payment aggregators¹ which requires payment aggregators to perform physical KYC on small & medium sized merchants, verify their bank accounts among other regulations.

Stripe, sighting the aforementioned regulations has made its onboarding invite only² in India, which means only large companies and those with connections can do business with them.

This is particularly devastating to solopreneurs and small businesses from India which aim to build global SaaS products where Stripe is the defacto standard for collecting payments, especially when Stripe is buying out smaller competitors³ which could have served as an alternative.

There are India based payment aggregators like Razorpay with International payments support⁴, but they require significant domestic transactions to get it enabled; which is not an option for those building global-first micro-SaaS products.

In-fact in all my previous SaaS side-projects, majority of my customers were from outside India. Side projects for which I used Stripe to collect my payments. That account was closed by Stripe without prior notification when I went 6 months without any transactions through it as I was overhauling my projects and in the midst of other personal commitments.

I had no charge-backs or any other disputes raised in that Stripe account. Stripe's customer service personnel said they don't see an option to re-enable my account which is usually available for other countries and asked me to start a new account, which is now impossible.

Having to register as a sole-proprietor, fulfilling the tax compliances⁵ was is by itself a huge burden for a solopreneur from India trying to make a living legally by building something which people would pay $5/month for.

Now, finding a payment gateway which will support global payments for individuals and small businesses from India is going to be a uphill task due to these regulations.

Meanwhile, scammers from India under the cover of large businesses are happily using Stripe to rob hard-earned money from elderly people living in western countries.

Sources

1: Regulation of Payment Aggregators (PAs) - DRAFT.

2: Moving to Invite Only In India.

3: Stripe acquires Lemon Squeezy.

4: Razorpay - International Payments.

5: Software Sales Tax in India.

Discussion

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