Updated: 14th November 2025 Foreign Inward Remittance Certificate (FIRC) is a key term for anyone in India receiving payments from abroad,&nbsp; be it exporters shipping goods overseas or freelancers offering services to international clients.

Are you dealing with international payments and confused by terms like FIRC? If you’ve ever received money from abroad for your business or freelance work, you might have been told to get a FIRC. Don’t worry – you’re not alone in finding this acronym puzzling. In this conversational guide, we’ll demystify Foreign Inward Remittance Certificates (FIRC) – explaining what they are (including the full form and meaning), why they’re important, who needs them, and how to obtain one. By the end, you’ll know exactly why FIRC matters for Indian exporters, freelancers, small businesses, and even accountants handling cross-border transactions. Plus, we’ll share tips on making the whole process much easier (hint: there are modern solutions that do the heavy lifting for you). Let’s dive in!

Let’s start with the basics: FIRC stands for Foreign Inward Remittance Certificate. It’s essentially an official document from an Indian bank that confirms you’ve received a payment from abroad. Think of it as a receipt or proof of an inward remittance (foreign money transfer) into your Indian bank account.

In practical terms, a FIRC contains details of the foreign payment you received – such as the amount in foreign currency and INR, who sent the money (the sender’s name and country), who received it (your name/business name), the date, and the purpose of the payment. It’s issued by your bank (specifically, banks authorized to deal in foreign exchange, known as AD Category I banks) whenever you receive money from overseas.

In simpler words: if a client overseas wires you funds for an export or a freelance project, the FIRC is the document from your bank saying “Yes, we’ve got the money from abroad, and here are the details.” It’s an official proof that foreign funds landed in India into your account.

Quick note: Sometimes people use “FIRC” loosely to also refer to similar documents like a foreign inward remittance advice (FIRA).&nbsp; Essentially, all these serve the same purpose – proving that an international payment was received. We’ll explain the differences in a bit, but generally if someone asks for a FIRC, they mean the proof of a foreign payment credit.

Whether you are an Indian exporter, a freelancer providing services globally, or a small business owner, obtaining a FIRC (or its equivalent advice) for your foreign earnings is very important. Here are the key reasons why a FIRC matters so much:

In summary, a FIRC is more than just a piece of paper. It’s crucial for compliance, unlocking financial benefits, and keeping clean records of your foreign income. In India’s regulated foreign exchange environment, this certificate (or its digital equivalent) becomes a cornerstone for anyone transacting internationally.

Now that we know why it’s important, you might wonder: “Do I actually need a FIRC?” If you fall into any of the following categories, the answer is likely yes:

In a nutshell, any Indian individual or business receiving money from outside India should obtain a FIRC for each such inward payment. This spans everyone from large export firms to freelance graphic designers paid via PayPal. It’s a best practice even if not mandatory in every case, because it’s your safety net and proof if questions arise later.

FIRC in India: RBI Guidelines and the Switch to FIRA

It’s important to understand how FIRCs are handled in India today, because there have been regulatory changes in the past decade. Historically, banks issued a physical FIRC on security paper for every foreign inward remittance received against exports. However, since 2016, the RBI changed the process for most cases. Let’s break down what that means:

You might also have seen the term e-FIRC. This is a bit tricky because e-FIRC isn’t a separate document you receive in hand – it’s more of a concept/number in the background banking systems.

For most small businesses or freelancers who use a single bank (or a single platform) to both receive funds and handle paperwork, you may not need to worry much about the term “e-FIRC” – your bank’s advice and the automated systems take care of it. Just know that it refers to the electronic trail of your remittance in RBI’s systems.

Two acronyms that often come up together in export finance are FIRC and BRC. They are related but serve different purposes, and it’s important not to confuse them:

In simpler terms, think of it as a two-step chain: First, you get the FIRC/FIRA when money comes in. Then, that leads to a BRC which connects the money to a specific export transaction.

For example, suppose you shipped 100 units of a product on a certain date (your shipping bill records this) and later you got USD 1,000 for that shipment. When the $1,000 arrives, your bank gives you a FIRA confirming receipt. You then inform the bank (or it knows via systems) that this $1,000 corresponds to that shipping bill. The bank updates the records and an e-BRC is generated which you can download from the DGFT portal as proof that the export transaction is closed with payment received. Why is BRC needed? Because to claim many export incentives or to fulfill export obligations, you have to show BRCs to the government – it proves you not only exported but also got paid for it.

Bottom line: FIRC (or FIRA) confirms money received; BRC confirms that money was tied to an export. Both are important for exporters of goods (first you get FIRC, then BRC to claim benefits). Freelancers and pure service exporters mostly just handle FIRCs unless they are in scenarios that require reporting exports formally.

&nbsp;You can use this decision tree to decide which one do you need.&nbsp;

FIRC Certificate Format:&nbsp; What Information Does it Include?

This is a sample FIRC document. All crucial remittance details have been masked for security purposes. Now let’s break the content of a FIRC down: 

If you’ve never seen a FIRC or FIRA document, you might wonder what it looks like and what details it carries. While formats can vary slightly from bank to bank, a typical FIRC/FIRA document (usually a PDF or letter these days) will include the following key information:

A modern FIRA might not have the word “Certificate” on it, but it contains the same info as the old FIRC. Some banks still title it “Certificate of Foreign Inward Remittance” even if it’s a PDF. In any case, all the above details are what make it valuable – ensure everything matches your expectations when you receive one (more on that in a moment).

How to Obtain a FIRC (Procedure to Get the Certificate)

Obtaining a FIRC or FIRA for a foreign payment is not always automatic – often, you’ll need to request it from your bank. The process can vary slightly by bank, but here’s a general step-by-step guide for Indian businesses or freelancers:

1. Receive the Foreign Payment: This might sound obvious, but you can only get a FIRC after the money from abroad has credited to your bank account in India. So, first step – make sure the funds have arrived. Note down the transaction details like the date of credit, the amount in foreign currency and INR, and any reference number (UTR) if available. This info will be needed for the request.

2. Contact Your Bank to Request the FIRC/FIRA: Reach out to your bank’s branch or your relationship manager and let them know you need a FIRC (Foreign Inward Remittance Certificate) or advice for a particular transaction. Many banks have a specific form or format for this request. Depending on the bank, you might do one of the following:

In your request, you’ll generally need to provide:

Tip: If your bank has a mobile app or online banking, search for terms like “FIRC request” or “Remittance Certificate” – some banks have digitized this. Otherwise, a quick email to your branch manager with the details might do the trick.

3. Provide Supporting Documents (if required): Banks might ask for some documents to ensure the request is legit and to attach as proof of the transaction’s purpose. Common ones include:

Not every bank will ask for all of these – often if the transaction was straightforward and coded correctly, a FIRC request might go through with just the form. But don’t be surprised if they ask for an invoice copy or such, especially for higher amounts or the first time you’re requesting.

4. Pay the Bank’s Fee (if any): Here’s the part not everyone realizes: many banks charge a small processing fee for issuing a FIRC/FIRA. The fee varies by bank but is typically in the range of ₹200 to ₹500 per certificate, plus GST. For example, one bank might charge ₹300 + taxes for each FIRC. Some banks waive it for premium account holders or in special cases, but generally expect a fee. Usually, the bank will deduct this fee from your account or ask you to pay it upfront. When you fill the request form, it might mention the fee or your branch will inform you. (As a rough timeline, after you request, it often takes around 1–2 weeks for the bank to issue the FIRC. Some get it done in just a few days, but don’t bank on it – pun intended!)

Good News: If this process sounds a bit old-fashioned, you’re right – it can be tedious. But lately, some fintech platforms and modern banking services offer FIRA certificates for free and instantly as a perk. (We’ll talk more about that in a moment when discussing easier ways.)

5. Wait for the Certificate to be Issued: Once you’ve submitted the request (and any docs and fees), the bank’s forex operations team will verify the details. They’ll match the info you gave with the actual inward remittance record. If everything checks out, they will generate the FIRC (or FIRA). Nowadays, this is usually a PDF document on the bank’s letterhead with a digital signature, which they might email to you or make available for download (some still might print it for collection at the branch if you specifically need a hard copy). The time frame can vary:

Keep an eye on the email you provided (and check the spam folder just in case, since it’s often an automated email with a PDF attachment).

6. Verify the Details on the FIRC: When you finally receive the certificate/advice, do not skip this step! Carefully check all the details:

If you spot any error (typos in your name, wrong amount, incorrect purpose code, etc.), contact the bank immediately to correct it. It’s important the FIRC reflects the truth of the transaction. Banks can issue an amended FIRC if needed, but you may have to give proof of the correct info (for instance, if your name was spelled wrong, you might send a copy of your PAN or passport; if the amount in INR is off, maybe a statement copy). It’s best to catch errors early and have them fixed, so you don’t run into problems later when using the FIRC for official purposes.

7. Use the FIRC for Your Needs: Once you have the FIRC/FIRA in hand (or in email):

In short, use the FIRC anywhere you need to prove “I got paid from abroad for X purpose.” It’s your golden ticket for compliance and benefits.

8. Remember: One FIRC = One Transaction: If you receive multiple foreign payments, you will generally need to request separate FIRCs for each. Say you’re a freelancer who got five different payments from five clients – you’d have five FIRC documents (and possibly five fees…). Some payment aggregators or services might give a consolidated statement for multiple small payments, but banks usually treat each inward remittance as a separate record and issue individual certificates.

Getting FIRC the Easy Way (Automatic FIRC with Modern Platforms)

At this point, you might be thinking, “Wow, that’s a lot of steps and wait time just to get a certificate!” 🤯 Indeed, dealing directly with banks for FIRCs can be slow and involve charges. Here’s where fintech solutions come to the rescue.

Platforms like Skydo offer a much smoother experience for handling foreign payments. For instance, when you receive an export payment through Skydo, the FIRC (or FIRA) is generated for you automatically – and at no extra cost. It’s basically built into the process. You don’t have to file separate requests or wait weeks. As soon as the payment is received and processed, you can log into your Skydo dashboard and download the remittance advice instantly. All the details (amount, purpose, etc.) are neatly recorded, compliant with RBI rules, without you lifting a finger to request it.

This kind of solution is a game-changer for freelancers and small businesses: you get paid faster (since such platforms often streamline the transfer) and you get the FIRC document instantly for each transaction. No bank queues, no follow-ups, no fees per certificate. If you’re frequently dealing with international clients, using a modern global payments platform can save you a lot of headaches when it comes to compliance paperwork like FIRCs.

Is FIRC Mandatory for GST Refunds and Other Purposes?

One common question that arises is whether having a FIRC is mandatory for certain claims, especially the GST refunds on exports. The short answer: Yes, if you’re claiming a refund or benefit on the basis of an export, you’ll need proof of foreign inward remittance – usually in the form of FIRC/FIRA.

When you export goods or services from India, those exports are considered “zero-rated” for GST, meaning you don’t have to pay GST on the sale. However, you might have paid GST on inputs (input tax credit) and you’d want to get that refunded since your output was zero-rated. To process this refund, the tax authorities require evidence that you indeed received payment in convertible foreign exchange for that zero-rated supply. FIRC is that evidence. It authenticates that the money entered India’s banking system against your export.

Here’s how it typically works for a GST refund on exports:

If you don’t have a FIRC to show and try to claim a GST refund, the claim likely won’t be accepted because you haven’t furnished proof of realization of export proceeds. It’s a critical document for this purpose.

Similarly, for other schemes like certain subsidies or duty credits for exporters, the requirement is often to show the BRC or FIRC to prove that the export was completed monetarily.

For freelancers or service exporters who may not deal with GST refunds (if, say, you’re below GST threshold or exports of services under LUT), it might not feel “mandatory” day-to-day. But consider that under income tax or any scrutiny, you’d still want that FIRC as proof of earnings. Also, tomorrow if you do register for GST and want to claim something, having FIRCs from the past means you’re prepared.

In summary: For compliance and benefits, having FIRCs is effectively mandatory. It’s part of the paperwork you should maintain if you earn in foreign currency. And specifically for claiming GST refunds on exports, a FIRC is usually non-negotiable.

Conclusion:&nbsp; Making FIRC Hassle-Free

Dealing with cross-border payments can seem daunting at first – there’s compliance to consider and extra paperwork like FIRCs to manage. But understanding the ins and outs of FIRC means you’re now equipped to ensure every dollar, euro, or pound you earn overseas is properly documented without stress.

The good news is that you don’t have to wrestle with these processes alone. As the world of international business is evolving, so are the tools to manage it. Your focus should be on growing your business or honing your craft – not on chasing bank certificates. That’s exactly why platforms like Skydo exist: to simplify global payments and the red tape that comes with them.

With Skydo, for example, you can enjoy seamless international payments with no hidden fees, and every time you receive a cross-border payment, an auto-generated FIRC (remittance advice) is instantly available for you. No special requests, no fees per certificate, no delays – it’s just there, ready to download when you need it. This means you remain fully compliant with RBI rules effortlessly, and you can devote your energy to what truly matters: delivering great products or services and scaling your venture.

In conclusion, a Foreign Inward Remittance Certificate is a vital piece in the jigsaw puzzle of doing business globally from India. It ensures your hard-earned foreign revenues are officially recognized and securely in your pocket (or rather, your bank account). By staying informed and leveraging modern solutions, you can turn what used to be a cumbersome process into a minor footnote in your workflow. Happy exporting (or freelancing), and may all your international payments come with an easy FIRC! 🚀

What is FIRC? Learn the full form, meaning, and how Indian exporters & freelancers can get FIRC or FIRA to claim tax benefits and stay RBI-compliant.

FIRC Full Form, Meaning & Guide for Exporters

Dive into the world of FIRC. Explore the full form, importance, and process of obtaining FIRC for your international transactions

Foreign Inward Remittance Certificate (FIRC): Full form, meaning and RBI guidelines

Prashanth

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Prashanth Kumar

If you run an export business, a freelance practice, or an agency in India, you already know the real problem isn’t getting paid—it’s getting paid without losing time, margin, or compliance sanity.

So if you’re searching for a “Skydo alternative”, you’re usually asking one of these questions:

This guide compares 5 common alternatives in a clear, non-salesy way—so you can choose what fits your payment pattern, buyer preference, and documentation needs.

Pricing, limits, and policies can change. Wherever possible, I’ve used official product pages and help docs.

Quick TL;DR (choose based on your situation)

We’ll compare options on the parts that usually matter most to Indian exporters/freelancers:

Skydo is positioned for India-based B2B collections, especially for freelancers, agencies, exporters, and <a href="https://www.skydo.com/blog/how-to-receive-payments-from-amazon-global-selling-in-india">Amazon Global Sellers,</a> where the goal is to reduce <a href="https://www.skydo.com/blog/forex-markup-fee-explained">hidden FX loss</a>, avoid slow SWIFT chains, and keep documentation clean and audit-friendly.

In plain terms, Skydo is typically chosen when you want:

Now, here’s when looking beyond Skydo is genuinely reasonable.

When a Skydo alternative might make sense

Some finance/procurement teams have PayPal embedded into approvals. When the deal is new, reducing buyer friction can matter more than optimizing fees.

2) You want P2P + cards + spending in one ecosystem

If you want one app that blends personal wallet behavior, cards, and business collections, you may prefer a different stack (Skydo is more “collections + compliance” oriented than “wallet + spending”).

3) You handle high-volume, low-ticket payments

Flat-fee models often shine at higher ticket sizes; if you’re doing 50–80 payments/month in the $30–$200 range, percentage pricing can sometimes align better (depending on the provider).

4) You’re receiving personal remittances, not export income

Family support, one-off transfers, travel-related incoming money = different compliance expectations. Consumer remittance products are designed for that flow. <a href="https://www.westernunion.com/in/en/receive-money.html?utm_source=chatgpt.com" target="_blank">Western Union Money Transfer</a>

What it is: A globally recognised checkout + invoicing platform that many international clients already trust.

Use PayPal instead of Skydo when: client acceptance &gt; cost optimization, and you’re fine with PayPal’s fee/Fx structure.

What it is: A global payments platform that lets Indian businesses share receiving account details (USD/EUR/GBP, etc.) and then converts + pays out to INR. It is known for offering midmarket exchange rates without any markup

Use Wise instead of Skydo when: your invoices fall within Wise’s receiving limits, and you’re comfortable with the payout + eFIRC workflow.

What it is: A platform popular with marketplace sellers and freelancers, offering receiving accounts and multiple ways to get paid (including card/ACH via “Request a Payment”).

<a href="https://www.skydo.com/blog/payoneer-payment-gateway-features-fees">Payoneer’s</a> pricing page lists:

Use Payoneer instead of Skydo when you’re deeply tied to marketplaces or need Payoneer’s network/payment-request flexibility more than a purpose-built exporter collection flow.

Skydo alternative #4: Infinity (and similar “low-ticket” specialists)

What it is: An India-focused cross-border payments product often positioned for smaller, frequent payments.

Infinity advertises a 0.5% transaction fee (GST inclusive).&nbsp;

Percentage fees scale with invoice size. A flat-fee model can become cheaper when ticket sizes grow—so this depends on your monthly mix.

Use Infinity-style options instead of Skydo when: your average invoice size is small and frequency is high, and you’re less focused on advanced exporter workflows like eBRC.

Skydo alternative #5: Revolut / Western Union / Xoom etc. (personal remittances)

What they are: Consumer-first products built for P2P transfers, travel money, family support, or cash pickup.

These tools generally aren’t designed around exporter compliance workflows (invoicing + purpose codes + export docs), and you usually don’t choose them for regular B2B export receipts.

Use these instead of Skydo when the transfer is personal, not business income.

Skydo tends to be the best fit when you want:

If you’re an Amazon Global Seller, the “documentation question” becomes even more important because:

Here's a quick comparison table to show how Skydo compares to other alternatives

So, when is Skydo still your best option?

Skydo is usually the best fit when you’re receiving B2B export payments into India and you want three things: lower total cost on meaningful invoice sizes, faster settlement, and zero chasing for compliance docs.

Choose Skydo if most of this describes you:

If your reality is: “I’m exporting services/goods, I invoice overseas clients every month, and I want money + documents to land cleanly without manual chasing,” Skydo is built specifically for that.

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Skydo alternatives

Freelance payment isn’t “pick PayPal vs bank transfer.” It’s a system: pricing + contract terms + invoice structure + payment rail + documentation. If one part is weak, you lose money or lose time (or both).

This guide helps Indian freelancers choose the best payment method for freelancers based on the only metric that matters:

How much lands in your account after fees + FX + paperwork effort.

Pricing: quote so you don’t lose money later

1) Set your floor rate (the “can’t-go-below” number)

Invoice in USD/EUR/GBP and protect margin with a visible buffer line item or slightly higher quote.

4) Put fees in writing (this avoids the “why is it short-paid?” mess)

The OUR/SHA/BEN setting is literally what decides who eats SWIFT charges. <a href="https://help.flywire.com/hc/en-us/articles/360019759293-What-do-OUR-DEBT-BEN-CRED-and-SHA-SHAR-mean-in-the-fees-section" target="_blank"></a>

Best payment method for freelancers (by scenario)

What does an “international wire transfer fee” really look like?

An international wire often has three separate cuts:

Even for banks, outgoing wires can range widely (roughly $5–$75), and intermediary fees are common. &nbsp;Also, the “short payment” problem often happens because the fee type is set to SHA or BEN.

PayPal international transfer fee (what’s actually charged)

For India accounts receiving international commercial payments, PayPal lists:

PayPal is usually the easiest “yes” for clients, but the total cost can be meaningfully higher once you include transaction fees and currency conversion spread.&nbsp;

Payoneer alternatives for freelancers (and when Payoneer still makes sense)

Payoneer is strong when your income is marketplace-led, and the integration reduces ops.

Wise (as a PayPal alternative): clear pricing, but account for eFIRC

Wise Business explicitly positions receiving fees as:

What to look for in PayPal alternatives for freelancers (decision checklist)

This lets you choose based on workflow, not brand.

How to stop bleeding money (practical fixes)

“Client bears all transfer fees (OUR). Any short payment will be recovered.”&nbsp;

Instead of 5×$200, invoice $1,000 once (less fixed-fee drag).

US: ACH, EU: SEPA, UK: FPS — often faster + cheaper than SWIFT.

Effective rate = INR received ÷ USD invoiced. Compare to mid-market to spot hidden FX loss.

Compliance &amp; documentation (don’t use sketchy hacks)

If you’re receiving export income, your paper trail matters. Keep:

Using “friends &amp; family” style workarounds may save fees short-term, but it can create documentation gaps when your CA asks for proof of foreign remittance.

Where Skydo fits (and why it’s built for this exact problem)

Once you’re doing repeat B2B international invoices, the goal is simple: reduce fee leakage without breaking compliance.

A clean “stack” that most freelancers end up with

If you’re doing international freelancing seriously, the “best” payment method isn’t the most popular one—it’s the one that gives you (1) predictable fees, (2) real exchange rates, and (3) clean documentation every single time. That’s exactly the gap Skydo is built to fill for Indian freelancers who invoice overseas clients regularly: local-rail collections instead of SWIFT chaos, live FX instead of hidden spreads, and instant FIRA instead of chasing paperwork.

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Freelance payment method

You landed a client in the US. Another one in the UK. Your invoices are in dollars, your payments come through PayPal or Wise, and for the first time, you're earning in foreign currency.

Then tax season arrives, and you're stuck with questions:
Do you need to report this income? How do you file a tax return with foreign income? What about money sitting in Payoneer, does that count?

If you're an Indian freelancer earning from international clients, this gets confusing fast. Here’s what you actually need to know about tax on foreign income, without the jargon or panic.

Tax on foreign income (for freelancers) — the one core rule

Here’s what matters: if you’re a Resident and Ordinarily Resident (ROR) in India, your global income is taxable in India. That includes payments from foreign clients and international platforms.&nbsp;

The payment route doesn’t change this. Whether money lands in <a href="https://www.skydo.com/blog/paypal-in-india-charges-review-alternatives">PayPal</a>, <a href="https://www.skydo.com/blog/transferwise-india-features-benefits-pros-cons">Wise</a>, <a href="https://www.skydo.com/blog/payoneer-fees-india-guide">Payoneer</a>, Skydo, a USD/EUR account abroad, or directly into your Indian bank account — for most ROR freelancers working from India, this is still tax on foreign income in India.

For the rest of this guide, we’re focusing on ROR freelancers (which covers most people freelancing from India).

What counts as “foreign earned income” for freelancers?

Foreign-earned income isn’t a special category on your tax return. It’s simply the income you earned from clients or platforms outside India.

For tax purposes, this usually falls under Profits and Gains of Business or Profession (PGBP) since freelancing is treated as your business.

One crucial detail: your tax is calculated in INR, not dollars or euros. Income in foreign currency is converted using the prescribed exchange-rate rule (commonly referenced as Rule 115 / SBI TT buying rate approach).

How to file taxes on foreign income (ITR) — step-by-step

Many freelancers use presumptive taxation under Section 44ADA because it simplifies reporting.

If you don’t use presumptive taxation (or you’re above the eligible threshold), you typically file a form like ITR-3 and report actual profit after expenses.

A clean tax return with foreign income declared correctly is non-negotiable.

Already taxed abroad? DTAA + Foreign Tax Credit (FTC)

Sometimes foreign clients/platforms withhold tax.

W-8BEN (common US client/platform scenario)

If you work with US platforms/clients, <a href="https://www.skydo.com/blog/filing-w-8ben-and-w-8ben-e-a-guide-for-indian-freelancers-and-businesses">Form W-8BEN</a> is commonly used to establish foreign status and claim treaty benefit eligibility; if you don’t provide it when requested, withholding can apply at a 30% foreign-person withholding rate.&nbsp;

If tax was paid/withheld abroad and a DTAA applies, you can usually claim <a href="https://www.skydo.com/blog/how-to-claim-foreign-tax-credit-with-form-67">Foreign Tax Credit (FTC) </a>in India (subject to rules and documentation).

<a href="https://www.skydo.com/blog/how-to-claim-foreign-tax-credit-with-form-67">Form 67</a> is the key compliance step for FTC. The Income Tax Department’s guidance generally links FTC to filing Form 67 within the specified timeline (commonly described as on or before the end of the assessment year).

Documents freelancers must keep (this actually matters)

When you file taxes on foreign income, documentation is what protects you.

Common mistakes (that cause real problems)

How Skydo helps with tax compliance (without “avoiding tax”)

Skydo isn’t about avoiding taxes. It’s about having clean numbers and clean proof.

Result: you pay the correct tax with less confusion and less paperwork panic.

Tax on Foreign Income: What Indian Freelancers Need to Know (2025)

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In 2025, enterprise finance teams are waking up to a simple fact: the old ways won’t suffice anymore. Checks are fading fast, but digital rails haven’t fully taken over. The latest AFP Digital Payments Survey shows that only 26% of B2B disbursements are still made by check – a sharp drop from 33% just three years ago. In other words, checks now make up roughly one-quarter of B2B spend, down 7 points since 2022. Meanwhile, a full <a href="https://www.financialprofessionals.org/training-resources/resources/survey-research-economic-data/Details/digitalpayments#:~:text=%2A%20Looking%20ahead%2C%2076,in%202022">76% of organisations</a> report they will “update their payments strategy” within the next three years.&nbsp; Finance leaders increasingly recognise that a modern enterprise payment strategy must evolve beyond legacy systems and manual processes.

However, a deeper look at the data reveals a disconnect.  Only about 22% of companies say “most of their eligible B2B payments are digital” – roughly the same share as in 2019.  In short, even as check usage retreats, the pace of overall digital adoption has flat-lined.  This gap suggests that many firms still rely on checks or paper-based methods for a large slice of transactions, even as they plan to overhaul their payments programs.  Finance teams need to ask: What’s holding us back, and how can we reset our core payments approach?

Over the last two decades, checks have gone from dominant to minority status. The <a href="https://www.jpmorgan.com/content/dam/jpmorgan/images/payments/afp-digital-payments-survey-2025/2025-afp-digital-payments-survey-report-ada.pdf?">AFP survey </a>charts show that in 2004, over 80% of B2B payments were by check – today it’s only 26%. For corporate collections (incoming payments), the trend is similar: just 25% of customers now pay by check, down from 30% in 2022.

Source: <a href="https://www.jpmorgan.com/content/dam/jpmorgan/images/payments/afp-digital-payments-survey-2025/2025-afp-digital-payments-survey-report-ada.pdf">2025 AFP Digital Payments Survey Report, Underwritten by JP Morgan</a>

 This shift reflects growing trust in digital payments – faster networks, ERP systems, and bank integrations – but also the aftermath of external pressure.  For example, a 2025 U.S. Executive Order mandates that federal disbursements go fully electronic by Sept. 2025, sending a strong signal.

Despite the clear downward trend, the real surprise is how slow the flip has been. The survey notes that “the trend toward moving all eligible payments to digital methods has shown only modest growth”. In 2022, 24% of U.S. firms said most of their supplier payments were already digital; by 2025, that number fell to 22%. In other words, the share of companies fully embracing digital B2B payments hasn’t budged. That plateau suggests many organizations have digitized the easy part of their payments, but the last miles (smaller payees, legacy flows, edge cases) still run on paper.

The stubborn reliance on checks (and similar manual methods) isn’t due to ignorance – it’s a mix of practical barriers. <a href="https://www.nacha.org/news/over-21-years-massive-drop-b2b-check-payments-study-finds#:~:text=What%E2%80%99s%20holding%20back%20the%20stragglers%3F,accepting%20new%20processes%20and%20technologies">Survey respondents </a>highlight that vendors and customers often resist change. Many small suppliers “do not have the overhead to process several forms of electronic payment,” and may lack the necessary infrastructure or simply prefer the familiarity of checks. In fact, industry analysts note that common hurdles include the high cost of replacing old technology, the difficulty of onboarding small trading partners, and the straightforward comfort of familiar check workflows.

Other roadblocks stem from corporate IT.  Legacy accounting and ERP systems can be expensive to retool, making even migrating payment file formats (e.g. updating batch files to ISO-standard XML) a major project.  Many firms still lack real-time payment confirmation tools, so they stick with what they know.  A finance director quoted in the AFP survey put it bluntly: “We recognise the long-term benefits of digital payments – cost savings, speed and transparency – but the short-term disruption and upfront cost create a barrier to rapid adoption.”

In short, the barriers to going digital are often cultural and technical: smaller suppliers reluctant to change, entrenched legacy systems, and established check-based approval workflows.  These factors keep many organisations from fully committing to accounts payable automation and straight-through processing.  Until these obstacles are addressed, the bulk of B2B payments will not move online.

Rethinking Your Enterprise Payment Strategy

The good news is that nearly three-quarters of companies realize they need a new playbook.  According to the AFP, 76% of enterprises plan to refresh their payments strategy within three years.  That’s a mandate to action.  Finance and treasury leaders are now defining a baseline: what mix of payment rails do we use today, and what do we need tomorrow?  They’re also exploring new payment rails and channels – everything from real-time payments and RTP® networks to blockchain pilots and expanded global wires – to find faster, more secure alternatives.

Key strategic steps emerge from the survey insights.  Companies are focusing on:

These priorities are not pie-in-the-sky – they reflect practical projects Treasury and AP teams can do.  For example, defining baseline rail usage might start as a simple internal audit of AP/AR flows.  Expanding file formats could mean working with your bank or TMS to accept ISO files.  Each step lays the groundwork for broader change.

One concrete tactic many organisations are pursuing is check-to-ACH conversion.  Replacing outgoing checks with ACH transfers is low-hanging fruit: it cuts fraud risk, automates reconciliation, and is supported by virtually all suppliers.  Some companies even set policies like “max 10% of AP volume by check” to force migration.  Accounts payable teams can accelerate this by offering incentives (like earlier payment terms) for ACH invoices, or by implementing vendor portals that make ACH enrollment easy.

At the same time, accounts payable automation is becoming central to the strategy reset.  AP automation tools (often cloud-based) let firms route invoices, approvals and payments electronically, without rekeying.  In practice, this means invoices hit an AP portal or workflow instead of an inbox.  Once digital, payments can be routed via the best rail automatically (for example, client bills go via ACH, vendor refunds via RTP®).  This reduces human touch points and makes it easier to enforce payment policy changes.

Naturally, any major AP overhaul requires change management, but many recent surveys find that the ROI on AP automation is persuasive.  Fewer checks means fewer manual sign-offs, less postage, and lower error rates.  And with audit trails and reporting built in, controllers get visibility they never had with paper.  As one finance executive put it, the real gain isn’t just cost savings – it’s freeing up team bandwidth for strategic tasks.

The Digital Plateau: Addressing the Flatline

Despite these efforts, the AFP data remind us that digital adoption has stalled at around 20–25%.  Why?  Even companies on board with the vision often find only incremental progress.  For instance, the survey notes that the proportion of firms expecting to “convert all eligible payments to digital” over the next three years is still only about 72% – hardly higher than 2022.  Many organisations have already digitalised their large payments (high-volume, repeat suppliers) but struggle with the tail of low-volume vendors.

To break through the plateau, some treasurers are taking bold steps.  They negotiate with their 80/20 of suppliers, or invest in onboarding services for small businesses (outsourced banking portals, OCR for checks, even digital wallets).  Others implement flexible rails for small vendors – for example, sending B2B payment links or using virtual cards with dynamic limits.  Essentially, the goal is to make it as easy as possible for any payee to accept non-check funds.

Conclusion: Modernizing Without the IT Headache

Reimagining enterprise payments doesn’t always require a ground-up system rewrite.  Many firms are proving that incremental, focused changes to the core can pay off immediately.  For example, a mid-market company might start by automating vendor enrollment onto ACH, updating its ERP to support ISO files, and retraining AP staff on new policies.  Over time, those steps accumulate into a real transformation.