Why is US-based payments giant Stripe going invite-only in India?

California-based payments giant Stripe has announced that it will temporarily switch to an invite-only system for new account sign-ups in India. 

The decision comes in response to the evolving regulatory landscape in the country, which has made it challenging for Stripe to offer quick launches and easy onboarding for new users.

The new regulatory requirements include stringent Know Your Customer (KYC) norms for domestic payment aggregator firms, effective from tomorrow. These norms require payment aggregator firms to overhaul their existing KYC practices.

"The regulatory landscape in India continues to evolve, and our goal is to offer the same experience in India that we aspire to offer to all our users worldwide. For example, enabling all new users to launch quickly with easy onboarding is a fundamental Stripe feature that we cannot promise in India today," the company said.

How will this affect new businesses in India?

Effective immediately, new businesses in India will no longer be able to sign up for a Stripe account through the company's website. Instead, they must request an invitation from Stripe’s India team and wait for approval.

The move indicates that Stripe is reducing its payment aggregator business to focus on larger customers with long-standing relationships, ensuring compliance with the Reserve Bank of India's (RBI) norms.

In a blog post, Stripe stated, "We’ve made the tough decision to temporarily offer our services by invite only in India...We will only be able to support a select number of businesses, with a focus on international expansion, for the time being."

When will Stripe reopen services to a broader audience?

Stripe plans to re-open its services to a broader audience by the second half of 2025, after completing necessary infrastructure upgrades.

"We remain strongly committed to India, and are working to build out the infrastructure to be able to support more users by the second half of 2025," Stripe mentioned on its website.

What about current Stripe users in India?

Current Stripe users in India will continue to have their active accounts supported. However, for new Stripe India accounts, an invitation will be required. For platforms using Stripe in India, new connected accounts will also be supported by invite only. 

In an email dated April 18, Stripe informed users that it is making changes to its onboarding process to comply with RBI’s guidelines. The company has mandated the verification of payout bank accounts used for settlement purposes along with proof of business for sole proprietorship firms not registered. Additional KYC details like permanent account number (PAN), emails, and business titles of the account openers, and URLs containing terms and conditions of the service provided were also made compulsory.

Stripe, which has been present in India since 2016, received the final nod from RBI to operate as a payment aggregator in January. Despite its limited scale in India, the company remains the world’s most-valued startup at $65 billion.