How to Receive International Bank Transfers in India

Types of Bank Transfers

When it comes to receiving international payments in India, understanding the different types of bank transfers is essential. Each method has unique features, benefits, and ideal use cases. Here’s a breakdown of the most commonly used methods:

SWIFT Transfers

The SWIFT (Society for Worldwide Interbank Financial Telecommunication) network is the most widely used system for international bank transfers. It ensures secure and standardized communication between banks worldwide.

How it works:

• The sender’s bank uses your account details, including your SWIFT/BIC code, to initiate the transfer.
• The SWIFT network ensures the funds are securely transmitted to your account through intermediary banks.

SWIFT transfers are reliable and globally accepted, making them ideal for large transactions or payments from multiple international locations. However, they may involve processing fees and take upto 5 business days to complete.

ACH Transfers

Although primarily used in the U.S., ACH (Automated Clearing House) transfers can be utilized for specific cross-border payments involving India.

How it works:

• ACH payments are processed in batches through an electronic clearinghouse.
• Funds are directly deposited into your account without relying on physical documents.

ACH transfers are cost-effective, especially for recurring payments or smaller sums. However, they are slower than SWIFT or wire transfers and not universally supported for international payments to India.

Wire Transfers

Wire transfers are similar to SWIFT but are also commonly used for direct electronic bank-to-bank payments.

How it works:

• The sender provides your account details, and the transfer is processed electronically.
• Wire transfers may use networks like SWIFT or direct bank connections to complete the payment.

Wire transfers are faster than traditional methods like cheques and are excellent for significant transactions. While they are secure and efficient, they may come with additional fees depending on the intermediary banks involved.

Local Payment Systems (FPS, SEPA, etc.)

In regions like Europe and the UK, systems such as SEPA (Single Euro Payments Area) and FPS (Faster Payments Service) are used for faster and cost-effective local transfers. These systems reduce friction in payments but require intermediary services to connect with Indian banking systems.

How It Works:

• Payments are processed in local currencies within these systems, and funds are converted and transferred to Indian accounts via international remittance 

It is best suited for freelancers or small businesses working with clients in specific regions like Europe or the UK.

Challenges of Traditional Bank Transfers

While traditional bank transfers remain a widely trusted method for receiving international payments, they are not without their drawbacks. Businesses and freelancers in India often face several challenges that can hinder smooth cross-border transactions. Here are the key pain points:

High Transaction Fees

One of the biggest downsides of traditional bank transfers is the cost. Multiple intermediary banks are often involved in transferring funds from the sender’s account to the recipient’s account in India. Each of these intermediaries may charge their own fees, including currency conversion charges, making the total transaction cost significantly high.

For businesses dealing with frequent payments, these costs can add up quickly, eating into their profit margins. Moreover, additional hidden charges, such as processing or administrative fees, can further inflate the final cost.

Slow Settlement Times

Another significant issue is the delay in settlement times. Traditional bank transfers, especially those made through the SWIFT network, can take anywhere from 2 to 5 business days to complete. In cases where multiple intermediaries are involved, the time can extend even further.

For businesses requiring immediate cash flow or freelancers awaiting payments for urgent expenses, such delays can cause unnecessary stress and operational challenges. The lack of real-time tracking further compounds this problem, leaving recipients uncertain about the exact status of their payments.

Lack of Transparency

Traditional bank transfers often lack transparency. Between the sender and the recipient, several entities may handle the transaction, and each step involves deductions and processing time. This makes it difficult to predict the final amount that will be credited, especially when currency conversion is involved.

Limited Accessibility

Many traditional banking systems still rely on extensive paperwork and manual processes, making them less accessible for smaller businesses or individuals who may not have established banking relationships. This further complicates the process for freelancers or startups just starting to receive international payments.

How Razorpay is Changing the Game

Razorpay’s innovative MoneySaver Export Account is designed to address the common challenges associated with traditional bank transfers. Tailored specifically for Indian businesses receiving international payments, this solution provides a seamless, cost-effective, and transparent experience, helping businesses thrive in the global marketplace. Here’s how Razorpay simplifies bank transfers:

Lower Transaction Costs

Traditional international transfers often come with high fees. Razorpay reduces these costs significantly. By allowing businesses to accept payments in local currencies, Razorpay cuts out the need for intermediary banks and the fees that come with them. This helps businesses save on transaction costs, making international transactions more affordable.

Faster Settlements

With traditional bank transfers, waiting for payments to settle can be frustrating. Razorpay speeds up this process, ensuring businesses receive funds faster, improving cash flow and streamlining operations. This efficiency reduces delays and ensures businesses can access their earnings promptly.

Higher Success Rates

Card payments, especially international ones, often come with low success rates due to fraud checks and security measures. Razorpay’s MoneySaver Export Account has a higher success rate, helping businesses process more payments successfully and providing a smoother experience for customers.

Payments for Cardless Customers

Not every customer has access to a credit or debit card, especially in regions with lower card coverage. Razorpay’s MoneySaver Export Account offers a convenient alternative. This method allows customers to make payments directly from their bank accounts, expanding payment options and helping businesses reach a wider customer base globally.

No Need to Visit the Bank Branch

In the traditional process, customers often need to visit a bank branch to make an international transfer. This adds time and complexity to the transaction. Razorpay’s solution eliminates this by allowing payments to be made online via ACH transfers. This ease of access significantly improves the customer experience, making it faster and more convenient for everyone involved.

Simplified Foreign Account Opening

Opening a foreign bank account is typically a time-consuming and complicated process for Indian businesses. Razorpay makes this process simple by offering businesses the ability to open foreign currency accounts in multiple countries, all in real-time and without hassle. This feature streamlines international operations, saving businesses time and effort.

More Affordable International Transfers

Razorpay’s MoneySaver Export Account is a more cost-effective alternative to card payments or SWIFT transfers. The ACH transfer system used by Razorpay helps lower the overall cost of international transactions, making it a more affordable option for businesses.

Faster Payments without a Website or App

Razorpay allows businesses to accept payments quickly without needing a website or app. With tools like Payment Links and Payment Pages, businesses can generate secure links that customers can use to complete their transactions. This flexibility enhances the speed and ease of the payment process.

Currency Conversion Made Easy

Razorpay simplifies currency conversion. Customers can make payments in their own currency, while businesses receive payments in INR (Indian Rupees) into their local accounts. This reduces the hassle of handling multiple currencies and makes it easier for businesses to manage payments.

No Chargebacks

Chargebacks are a common issue with card payments, often causing inconvenience and disrupting business operations. Razorpay’s MoneySaver Export Account eliminates the risk of chargebacks, offering a more secure and reliable way to process payments.

Multi-Currency Settlement

Razorpay supports a wide variety of foreign currencies, including USD, GBP, CAD, and EUR. Businesses can accept payments in these currencies and settle them in INR, simplifying the management of international payments. 

Step-by-Step Guide to Start Receiving Payments with Razorpay

To start receiving international payments with Razorpay’s MoneySaver Export Account, follow these simple steps:

1. Log in to Razorpay Dashboard
   – Start by logging into your Razorpay Dashboard and navigating to the Account & Settings section.
2. Navigate to International Payments
   – Under the Payment methods section, select International Payments to access payment method options.
3. Request Activation
   – In the Local Currency Bank Transfer section, under the MoneySaver Export Account tab, you’ll find an option to Request activation for the account you wish to set up. Click on it to proceed.
4. Accept Terms & Conditions
   – You will need to agree to the terms and conditions to activate your local currency account. After reviewing, click Activate Now to confirm your request.
5. Start Receiving Payments
   – Once your request is processed, a local account in USD currency will be created, allowing you to start accepting payments in USD through local ACH bank transfer.
6. View Account Details
   – Click on the Account Details button to view and copy your account information. From there, you can create a Payment Link or a Payment Page and share them with your customers for fast and secure payments.

Prerequisites to Start Accepting International Payments

• You must have an active Razorpay account with completed KYC verification.
• Provide PAN details of your business during the onboarding process.
• Your business should be Indian and fall under the list of eligible transaction purpose codes (for exports).
• To receive payments in foreign currencies like USD, you need to have international payments via Payment Link enabled.

Simplifying Cross-Border Transactions 

While traditional international bank transfers offer security and reliability, they often come with high fees, slow processing times, and a lack of transparency, which can hinder businesses in India. Razorpay’s MoneySaver Export Account effectively addresses these challenges by providing a more affordable, faster, and transparent solution. With features like lower transaction costs, multi-currency settlements, and seamless payment tools, Razorpay empowers businesses to receive international payments effortlessly, ensuring smoother cross-border transactions and helping businesses grow globally with ease.