Tackling fake Aadhaar cards and cross border payments: Inside Cashfree’s next phase of growth

Bengaluru-based fintech giant Cashfree Payments is doubling down on AI-driven fraud prevention and cross-border solutions as part of its ambitious three-year plan to dominate India’s digital payments ecosystem.

At the heart of this strategy is artificial intelligence—both a tool and a challenge. When OpenAI released its latest image model, users flocked to “Ghiblify” themselves into whimsical, hand-drawn avatars. However others quickly discovered they could just as easily forge seemingly genuine Aadhaar cards for fictitious individuals.

Experts warn that as these AI models become more sophisticated, they may wreak havoc for customers and financial institutions alike. India is already grappling with a surge in digital‐financial fraud: in the first ten months of FY 2024-25, such scams totaled Rs 4,245 crore, a 67% increase over the Rs 2,537 crore recorded in 2022-23, according to the Reserve Bank of India.

Cashfree Co-founders Reeju Datta and Akash Sinha tell YourStory that their “moonshot” priorities include scaling Secure ID, a fraud-detection suite, and capturing cross-border payment flows—both seen as high-margin engines for the payments pioneer.

“There’s a growing wave of fraud across the financial ecosystem, and regulators are tightening their grip. At the same time, AI has reached a level of sophistication we've never seen before. These three forces—rising fraud, stricter oversight, and powerful AI—are now converging.” Datta says. 

Laying the groundwork

Cashfree says that since its inception a decade ago, it has differentiated itself from other companies with a full-stack platform, launching not just one, but four core products—collections, disbursals, auto-collect, and marketplace settlements—tailored to automation-heavy industries like gaming, hyperlocal delivery, and events. This API-first approach laid the groundwork for deeper integrations and set the tone for its current push into high-efficiency, tech-led services.

Secure ID, Cashfree’s identity verification and KYC product, already contributes 15% of revenue and is growing at over 100% YoY. The suite leverages AI for video KYC, face-matching, and “smart OCR” to detect fake or low-quality Aadhaar scans—common in India’s smaller towns.

Cashfree also embeds AI into its Risk Engine to detect new, subtle fraud vectors—everything from account-takeover (where behavioural biometrics spot an unusual login/device) to false-repayment patterns in NBFC flows.

False-repayment fraud generally refers to schemes in which a fraudster initiates or disputes a repayment/refund for a transaction that either never occurred or was legitimate—effectively tricking the merchant or lender into returning funds improperly.

“We’re optimising for scenarios where someone in a Tier III city might take a blurry photo of their Aadhaar card. Our AI still extracts data and flags fraud,” says Datta.

Last month alone, Secure ID saw a 70% month-on-month spike in metrics, driven by demand from lenders, gaming platforms, and quick-commerce firms verifying gig workers.

The product was born out of its experience navigating regulatory audits during a temporary year long embargo when the RBI in December 2022, barred Cashfree (alongside peers like Razorpay and Stripe) from onboarding new merchants until it completed mandated audits and compliance checks.

“It’s sort of our AWS moment,” said Datta. “It came from a phase where we were under an embargo and spent over a year just reading regulatory guidelines, reworking onboarding and compliance. What emerged was a product that allows marketplaces, lenders, and fintechs to onboard customers smoothly while protecting against rising fraud.”

The product also helps introduce businesses to Cashfree’s main payment services. For example, many companies first discover Cashfree through a simple tool on their website that verifies bank accounts. This page shows up easily on Google, so businesses often find it when searching for a solution. One major quick-delivery company started with this tool—and later began using Cashfree’s full payment system. “Half of Secure ID users eventually migrate to our full platform. It’s a wedge to upsell,” Datta explains.

Cross-border is another strategic bet. Armed with a Payment Aggregator–Cross Border license, Cashfree is looking to help both Indian exporters and international sellers tap the India market.

“We're building infrastructure that allows, say, a SaaS company in the US to collect payments from India and settle locally,” said Sinha. “Conversely, we’re helping Indian SMEs sell to global markets, which was hard earlier due to lack of robust cross-border rails. Once that infrastructure is in place, usage scales.”

The journey

Cashfree’s journey began in 2015 when Datta and Sinha, then in their late 20s, set out to digitise India’s cash-on-delivery economy. “Back then, 70% of e-commerce payments were COD. We wanted to make those digital,” recalls Datta. The duo bootstrapped with Rs 2 lakh each, coding in Bangalore apartments and testing prototypes by manually convincing restaurants to accept payments via Cashfree links.

The startup bootstrapped for nearly two years, living on personal savings and lean budgets. “We were frugal—20,000 a month, mostly rent and food,” said Datta. “When we started paying salaries, it was from our own pocket.”

Their break came in 2017 with acceptance into Y Combinator. “YC taught us to set aggressive goals—like doubling metrics every two weeks,” says Sinha. 

Despite growing competition, Cashfree remains focused. “The internet economy in India is far from saturated,” says Sinha. “We're not here to take a slice of the existing pie—we want to grow the pie itself.” Today it competes with more than two dozen licensed payment aggregators including some heavy weights like Razorpay and PayU.

Cashfree is also planning for an IPO but doesn’t have any fixed timeline. “It depends on market readiness and how close we are to our product goals,” Sinha said. “Right now, it’s about building deeper moats.”

As Datta puts it: “In payments, you either evolve with the market or become irrelevant. We’re building for the next billion transactions.”

A few of Cashfree’s earliest clients were Dream11, Games24x7, and MPL—companies that needed fast, reliable ways to both collect entry fees from players and disburse winnings instantly. Cashfree’s ability to automate this flow—via its payouts and collections APIs—gave these platforms a crucial edge in customer experience.

These early synergies eventually caught the eye of KRAFTON, the South Korean maker of Battlegrounds Mobile India (BGMI), as per an earlier interview with the Korean gaming giant. In February 2025, KRAFTON made its first fintech investment in India, leading a $53 million funding round in Cashfree Payments. Existing investor Apis Growth Fund II also participated.

Although Cashfree Payments has not yet disclosed its financials for FY25, the company’s revenue from operations rose by 4.7% in FY24, reaching Rs 642.7 crore—up from Rs 613.8 crore in FY23, as per its annual filings. Meanwhile, its net loss saw a slight uptick, increasing to Rs 135 crore in FY24 from Rs 133 crore the previous year.

Today Cashfree processes $80 billion in annual payments for over 800,000 businesses.