GBP Payment Guide: Best Ways to Accept GBP in India

Indian exporters receiving British Pounds often lose 4-6% of their invoice value through hidden bank charges and unfavorable exchange rates. The UK remains India’s sixth-largest trading partner, with bilateral trade worth £36 billion annually, yet many businesses still rely on expensive SWIFT transfers. Modern payment solutions now offer local UK account numbers, enabling Indian businesses to accept GBP payments like a local company.

Traditional wire transfers eat into profit margins through multiple deductions. A £10,000 invoice can lose £600 or more between SWIFT fees, intermediary charges, and poor exchange rates. This guide compares the most effective methods for accepting GBP payment in India while retaining maximum value.

What Are GBP Payments?

GBP payments refer to transactions received by Indian businesses in Great Britain Pound Sterling for the export of goods, services, or software. The currency code GBP represents one of the world’s major trading currencies and is widely used in India–UK commercial dealings.

It is important to distinguish between local UK payments and international transfers. Local payments use UK sort codes and account numbers and are processed through domestic systems such as Faster Payments. In contrast, cross-border transfers rely on SWIFT networks, involving multiple banks and higher fees. Understanding this distinction allows exporters to select more cost-effective methods for receiving payments.

Why Traditional GBP Transfers Are Costly for Indian Businesses

When receiving payments from the UK, conventional SWIFT transfers can significantly reduce the net amount credited to your account. Many exporters underestimate the multiple cost layers embedded in traditional banking infrastructure, which collectively erode your receipts.

Typical costs include:

• SWIFT fees: The sender’s bank usually charges £20–40 for international wire transfers.
• Intermediary bank charges: Correspondent banks deduct £15–30 as the funds pass through the network.
• Exchange rate markup: Banks often apply a margin of 1.0–3.5% below the mid-market rate.
• AD bank charges: Indian banks levy ₹200–1,000 for inward remittance processing and FIRC issuance.
• Settlement delays: Traditional transfers take 2–5 business days, exposing you to potential currency fluctuations.

Top Ways to Accept GBP Payments in India

Understanding the hidden costs reveals why exploring alternatives matters. Indian exporters now have multiple channels for receiving British Pounds, each with distinct advantages and limitations.

1. Traditional SWIFT Wire Transfers

UK clients send funds through their bank using your Indian bank’s SWIFT code and account details. This universally accepted method requires no special setup for senders.

Pros:

• Supported by virtually all banks globally
• Secure and fully traceable
• Direct credit to your current account

Cons:

• High transaction fees (£20–40 per transfer)
• Exchange rates often include hidden markups
• No real-time tracking of funds
• FIRC requests are manual and can take weeks

Explore Razorpay’s Global Payment Solutions

2. International Payment Gateways

Freelancers often embed payment gateways in invoices to make payments easier for clients. These platforms automatically handle currency conversion and regulatory compliance.

Pros:

• Highly convenient for small transactions
• Instant payment notifications
• Smooth experience for clients

Cons:

• High per-transaction fees (4–6%)
• Unfavourable withdrawal rates when transferring to Indian banks
• Limited support for FIRCs, affecting tax documentation

3. Razorpay MoneySaver Export Account (Recommended)

Virtual accounts provide Indian businesses with UK sort codes and account numbers, allowing clients to pay through UK domestic networks rather than international SWIFT.

Key Benefits:

• Save up to 50% on foreign exchange charges compared with traditional banks
• Automated FIRC generation for every transaction
• Funds received via Faster Payments or BACS
• Real-time settlement tracking

Best For: B2B exporters, software agencies, and high-volume freelancers requiring proper compliance documentation.

4. Freelance Marketplaces (Upwork, Fiverr)

Payments are received directly into marketplace wallets, which include integrated escrow protection for security.

Pros:

• Built-in dispute resolution
• Seamless for platform-based work
• No setup required

Cons:

• Platform fees of 10–20%
• Additional withdrawal charges
• Exchange rate markups during conversion

Understanding UK Payment Rails: FPS, BACS, and CHAPS

Indian exporters with virtual UK accounts can access these local rails, significantly reducing costs.

Virtual account solutions enable Indian businesses to receive payments via UK domestic networks rather than expensive international wire transfers. This approach bypasses SWIFT entirely.

Faster Payments Service (FPS)

FPS operates 24/7 for real-time transfers up to £1 million. Near-instant settlement makes it ideal for urgent payments or time-sensitive invoices. Indian exporters should request FPS transfers from UK clients whenever possible.

BACS (Bankers’ Automated Clearing Services)

BACS processes payments in 3-day cycles, commonly used for payroll and recurring transfers. While slower than FPS, BACS transfers are typically free for UK senders. This suits retainer agreements and monthly service contracts.

CHAPS (Clearing House Automated Payment System)

CHAPS provides same-day settlement for high-value transfers, but costs senders £20-35. Reserve this option for large, time-critical transactions exceeding FPS limits.

Key Compliance Requirements for Receiving GBP in India

Local payment rails offer cost advantages, but all foreign receipts are regulated by the Reserve Bank of India under FEMA guidelines. Using personal savings accounts for business receipts violates RBI rules; only current or designated export accounts should receive foreign remittances.

FIRC (Foreign Inward Remittance Certificate)

A FIRC acts as mandatory proof that funds have originated from abroad. This document is essential for claiming GST refunds on zero-rated exports and meeting income tax requirements. Traditional banks may take two to four weeks to issue a FIRC upon request.

Without a FIRC, exporters cannot claim GST refunds or demonstrate legitimate foreign income. Modern payment solutions now generate digital FIRCs automatically, removing the need for in-person bank visits and speeding up compliance.

Purpose Codes

Every incoming foreign transaction must be classified under an accurate purpose code. For instance, software exports generally use P0802, while consultancy services may fall under P0801. Incorrect codes can trigger regulatory scrutiny, delays, or even temporary freezing of funds.

Banks review purpose codes during settlement, and any mismatch with the actual service can create compliance issues requiring detailed clarifications.

How to Choose the Right GBP Payment Method

Choosing the right GBP payment method is not only about minimising costs; compliance, documentation, and cash-flow efficiency are equally important. Your ideal option depends on business size, payment frequency, transaction value, and the level of regulatory support you need.

Decision Framework

Scenario A: Occasional freelance projects (below ₹1 lakh per month)

• Payment gateways offer convenience and quick onboarding
• Higher fees may be acceptable for ease of use
• FIRC may not be essential in all cases

Scenario B: Regular B2B invoicing (above ₹5 lakhs per month)

• Virtual UK accounts help retain more value by reducing fees
• Automated FIRC generation simplifies compliance
• Lower ongoing costs justify the initial setup effort

Scenario C: High-value exports (above ₹10 lakhs per transaction)

• Direct wire transfers may be necessary if clients insist
• Negotiating preferential bank rates can reduce costs at scale
• Strong documentation processes are critical for audits and tax filings

Selection Checklist

• Compare total landed costs, including hidden and intermediary fees
• Confirm FIRC availability to meet tax and regulatory requirements
• Evaluate settlement speed based on cash-flow needs
• Consider your clients’ preferred payment methods

How Razorpay MoneySaver Simplifies GBP Collections

Traditional methods involve several friction points that modern solutions now address more effectively. The Razorpay MoneySaver Export Account provides Indian businesses with local UK account details, allowing them to receive payments through domestic UK payment networks.

This setup completely bypasses SWIFT intermediaries. UK clients make payments to your virtual account using standard local transfers. At the same time, funds are settled directly into your Indian bank account at transparent foreign exchange rates and with minimal fees.

Additionally, digital FIRC generation is fully automated, removing the need for manual bank follow-ups. Each transaction includes compliant documentation for GST refunds and tax filings, and purpose codes are automatically applied based on your business profile.

Conclusion

Maximising revenue from UK clients depends on choosing a payment infrastructure that protects the full value of your invoice. Traditional SWIFT transfers can erode 4–6% through layered charges, whereas modern virtual account solutions typically reduce total costs to under 2%.

Prioritise methods offering transparent pricing, automated FIRC generation, and quick settlement times. Review your current setup against the best ways to accept GBP payments in India outlined above. Switch providers if hidden fees exceed 3% of transaction values.

FAQs

Q1. Is a FIRC mandatory for receiving GBP payments in India?

Yes, a Foreign Inward Remittance Certificate is mandatory as legal proof of foreign-source funds. It is required for GST refund claims on zero-rated exports and ensures RBI compliance. Banks must issue FIRCs for all inward remittances.

Q2. What is the correct Purpose Code for freelance work?

You must select a purpose code that matches your specific service to avoid regulatory issues. P0802 applies to software consultancy, while P0103 covers writing and journalism. Incorrect codes can cause payment delays or tax scrutiny.

Q3. How long does a GBP transfer take to reach an Indian bank account?

Traditional SWIFT transfers usually take 2–5 business days due to intermediary banks. UK local rails such as Faster Payments via virtual accounts enable same-day or near-instant settlement, improving cash flow.

Q4. Can business payments be received in a personal savings account?

While small amounts may go through, using a personal savings account for business payments violates RBI guidelines. Banks often flag such transactions. A current or export account ensures compliance and easier reconciliation.

Q5. Why are traditional bank transfers from the UK expensive?

Banks charge multiple fees, including upfront transfer charges (£20–40), intermediary bank deductions, and forex markups of 1–3.5%. These costs significantly reduce the rupee amount credited against the original GBP invoice.

Q6. Is there a limit on receiving GBP via Faster Payments?

The UK Faster Payments Service supports transfers up to £1 million, though individual banks may impose lower limits. This is sufficient for most freelancers and SMEs. Higher amounts typically require CHAPS transfers, which are costlier.