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

Selecting the correct purpose code for international transactions is vital for complying with Reserve Bank of India (RBI) and FEMA (Foreign Exchange Management Act) regulations. The P1006 purpose code is specifically used for businesses that offer business consultancy, management consultancy, or public relations services to foreign clients. This code ensures proper classification of inward remittances, aiding compliance with regulatory guidelines and smooth flow of foreign funds into India.

The P1006 purpose code is used for transactions related to the provision of business services, including management consultancy and public relations. This code is used when an Indian company or individual receives payments from foreign clients for offering professional services, such as business strategy consultation, management advice, or PR services. Properly classifying the inward remittance with the P1006 code ensures that the transaction is recorded correctly and reported to the RBI.

When foreign exchange inflows are categorised under this purpose code, they comply with both <a href="https://www.rbi.org.in/commonman/English/Scripts/Notification.aspx?Id=1410?no_follow=true">RBI guidelines</a> and <a href="https://enforcementdirectorate.gov.in/fema?no_follow=true">FEMA regulations</a>, ensuring legal and regulatory clarity for businesses.

Importance of P1006 Purpose Code in Inward Remittance

The P1006 purpose code plays a crucial role for businesses involved in consultancy and PR services. By assigning the correct purpose code, such as P1006, you ensure that the payments received from foreign clients are classified appropriately under RBI guidelines. This classification is critical for inward remittances related to business services, preventing any legal complications.

Whether you’re a management consultant, a business strategist, or a public relations professional offering services to international clients, choosing the P1006 purpose code is essential for processing the payments efficiently. By doing so, you can avoid delays in foreign exchange transactions and ensure that all inward remittances are routed and recorded accurately.

Understanding Purpose Codes: Beyond P1006

<a href="https://www.skydo.com/blog/what-is-purpose-code-and-why-is-it-required#process-of-selecting-the-right-purpose-code">Purpose codes</a>, such as P1006, are part of a broader system that helps categorise all kinds of cross-border transactions. These codes are designed to provide clarity on the nature of international payments, helping the RBI monitor and regulate the inflow of foreign exchange into India. By assigning the right code, businesses and individuals ensure that their transactions are reported correctly, allowing smooth foreign currency movements under FEMA regulations.

While the P1006 code applies specifically to consultancy and PR services, other purpose codes apply to different types of transactions, such as exports of goods, software services, or investments. Selecting the correct code prevents misreporting and ensures that the transaction complies with Indian regulatory frameworks.

How Do You Choose the Right Purpose Code for Your Transaction?

Choosing the appropriate purpose code is essential for ensuring that your inward remittance complies with RBI guidelines. For businesses providing consultancy or PR services, the P1006 purpose code should be used when receiving payments from foreign clients for services rendered.&nbsp;

Before you finalise your remittance, confirm the nature of the transaction and ensure that the purpose code matches the services provided. Incorrect purpose code selection can lead to delays, misreporting, or even regulatory penalties. If you’re uncertain about which code applies to your transaction, consult your bank or a financial advisor to confirm the correct code. You can also check out our <a href="https://www.skydo.com/blog/rbi_purpose_code_for_inward_remittance">guide</a> on selecting the right purpose code for your business.&nbsp;

By ensuring the proper documentation—such as contracts or invoices for services rendered—is provided, you can facilitate a smooth remittance process.

Conclusion: Ensuring Compliance with the P1006 Purpose Code

The P1006 purpose code is essential for businesses offering consultancy, management, or PR services to international clients. By choosing the right code, you ensure that your transaction complies with RBI and FEMA regulations, and that the inward remittance is routed correctly. Always confirm that the transaction details and purpose code align with the services provided, ensuring a smooth and compliant transfer of foreign exchange into India.

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When processing international transactions, especially those related to exports, selecting the correct purpose code is crucial for ensuring compliance with the Reserve Bank of India (RBI) and FEMA (Foreign Exchange Management Act) guidelines. The P0102 purpose code is specifically designated for the realisation of export bills related to goods exported and paid for in full. Understanding when and how to use this code is essential for smooth foreign exchange inflows and legal compliance.

The P0102 purpose code is used when Indian companies export goods and receive payments in full against the export invoice. This code specifically applies when the foreign client has received the shipment, and the exporter is realising the bill amount. It categorises the inward remittance as an export payment, ensuring that the transaction is correctly recorded and reported to the RBI. Properly classifying this remittance using the right purpose code ensures compliance with both FEMA and <a href="https://www.rbi.org.in/commonman/English/Scripts/Notification.aspx?Id=1410?no_follow=true">RBI guidelines</a>, streamlining the flow of foreign exchange into India.

Importance of P0102 Purpose Code in Inward Remittance

While the P0102 purpose code is specifically for export payments, purpose codes are a broader system designed to categorise various types of international transactions. Each code corresponds to a specific type of transaction, helping the RBI track and monitor the inflow and outflow of foreign exchange in compliance with <a href="https://enforcementdirectorate.gov.in/fema?no_follow=true">FEMA regulations</a>.

For instance, while P0102 applies to exports of goods, there are <a href="https://www.skydo.com/blog/rbi_purpose_code_for_inward_remittance">other codes</a> designated for transactions related to services, personal remittances, or foreign direct investments. Selecting the appropriate code ensures that the remittance is routed correctly and avoids delays or complications in the transfer process.

Choosing the wrong code can lead to misreporting, which may result in regulatory scrutiny or even fines. Hence, it is important for businesses to be aware of the different purpose codes and their correct applications.

How to Select the Right Purpose Code for Your Transaction

To ensure your inward remittance is compliant with RBI guidelines, it's essential to choose the correct <a href="https://www.skydo.com/blog/what-is-purpose-code-and-why-is-it-required">purpose code</a> for your transaction. In the case of exports of goods, the P0102 purpose code should be selected only when the payment represents the full invoice value for goods that have been shipped and received by the foreign client. Before initiating the transaction, verify the status of the shipment and ensure that the payment is for the total invoice value as per the export agreement.

If you're unsure about which code to select, consult with your bank or financial advisor. The proper documentation, such as the export invoice and bill of lading, should accompany the remittance process, ensuring transparency and smooth processing. Using the correct purpose code helps avoid regulatory issues and ensures the timely completion of international transactions.

Conclusion: Ensuring Compliance with the P0102 Purpose Code

The P0102 purpose code is essential for Indian exporters who receive full payments for goods sent to foreign buyers. By selecting the correct code, you ensure that your transaction complies with RBI guidelines and supports the smooth flow of foreign exchange into India. Always verify the shipment and payment details before finalising your remittance to avoid any penalties or delays. Selecting the right purpose code simplifies the inward remittance process and guarantees compliance with both FEMA and RBI regulations.

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Accurately classifying international transactions is crucial for exporters to comply with RBI and FEMA regulations. The P0103 purpose code is used when businesses receive advance payments for goods that will be shipped later. This guide will walk you through the role of the P0103 code, its importance in inward remittance, and how it supports compliance with RBI guidelines.

The P0103 purpose code applies when Indian businesses receive advance payments from foreign clients against export contracts. This means the exporter receives the funds before the goods are shipped. The foreign exchange inflow is categorised under this code to ensure that the remittance is properly reported to the RBI as an advance against goods exports.

Using the right purpose code, such as P0103, helps businesses comply with Indian regulations and avoid issues during the remittance process. If you’re new to how these codes work, you can explore <a href="https://www.skydo.com/blog/what-is-purpose-code-and-why-is-it-required">what purpose codes</a> are to get a deeper understanding of their significance.

&nbsp;Importance of P0103 Purpose Code in Inward Remittance

The P0103 purpose code ensures that advance payments for exports are reported correctly under RBI guidelines. This code is essential for businesses that need to receive funds upfront to finance production or shipping. Proper classification helps avoid delays in the remittance process and ensures compliance with FEMA regulations.

Using the P0103 code ensures that the payment is recognized as an advance for future export, enabling businesses to access their funds efficiently. Whether it’s for procuring raw materials or manufacturing, having the funds before shipment ensures smooth operations and better financial planning.

Understanding Purpose Codes: Beyond P0103

Purpose codes like P0103 are essential for tracking cross-border transactions. They help the RBI monitor foreign exchange inflows and ensure compliance with regulations. While P0103 is used for advance receipts against export contracts, other codes apply to various types of transactions, such as exports of services, personal remittances, or consultancy services.

If you need to explore other relevant codes for your transactions, check out this <a href="https://www.skydo.com/blog/rbi_purpose_code_for_inward_remittance">list of purpose codes and guide on finding your purpose code</a> to identify the correct one. Choosing the wrong code could lead to misreporting, resulting in penalties or delays. Therefore, understanding the system of purpose codes is vital for seamless cross-border financial operations.

Selecting the appropriate purpose code ensures that your inward remittance aligns with RBI and FEMA guidelines. If you’re receiving advance payments from a foreign client for goods that will be exported later, the P0103 purpose code must be used.

Before finalising your transaction, confirm the type of remittance and ensure it matches the purpose code. If the advance payment relates to a service or partial shipment, a different code might be applicable. Proper documentation, such as the export contract, should accompany the payment to avoid discrepancies or delays.

If you’re unsure which purpose code to use, consult with your bank or a financial expert to avoid errors. Misusing codes can cause processing delays or trigger regulatory scrutiny.

Conclusion: Ensuring Compliance with the P0103 Purpose Code

The P0103 purpose code is critical for businesses that receive advance payments for goods exports. By using this code, exporters ensure that their transactions comply with RBI and FEMA regulations. Always confirm that the transaction aligns with the P0103 code and maintain proper documentation to avoid delays or penalties. Selecting the right purpose code ensures smooth financial operations and transparent foreign exchange inflows.

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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.

In fact, platform solutions are emerging to help organisations “operationalise” modern B2B payments without a massive IT lift.  These cloud-based hubs connect ERPs, banks and suppliers to multiple rails and currencies.  For instance, platforms like Skydo now offer virtual global accounts, automated invoicing, and multi-rail payment routing.  A finance team in India can use such a platform to receive international payments, international invoices (achieving “check to ACH” or cross-border transfers) while automatically generating compliance docs – without rebuilding their back-end.  The key is that these tools plug into existing workflows, gradually phasing out paper checks.

In 2025, the message is clear: finance teams must modernise their core or risk falling behind.  The declining check usage proves the demand is there, and three-quarters of firms are already resetting their strategy to meet it.  By recognising the human and technical barriers (vendor habits, legacy systems) and taking strategic steps (baseline analytics, file conversion, new rails), companies can unlock digital growth.  And with smart platforms (like Skydo) aiding the journey, even large enterprises can migrate tens of millions in B2B flows without a total IT overhaul.

Every CFO and treasurer today should be asking: How many more payments can we digitise?  Because the future of finance is digital, and&nbsp;the time to modernise is now.

Modernize the Core: Your B2B Payments Strategy Reset

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If you invoice a foreign client for $1,000, you expect to lose “maybe 1–3%” to fees.
In reality, international payments don’t lose money in one place—they lose money in layers.

A bank fee here. A correspondent fee there. A weak exchange rate in the middle. And by the time the INR hits your account, your payout can be materially lower than your invoice, without a clean breakdown explaining why.

Primary keywords covered: International Bank Transfer Fees, money transfer rates, PayPal international transfer fee, international wire transfer fee.

International Bank Transfer Fees — simple meaning

International bank transfer fees are the total deductions and exchange-rate loss that happen when your client pays you from abroad—whether via SWIFT wire, PayPal, Wise, or a payment platform.

1) International wire transfer fee (client’s bank)

This is what your client’s bank charges to send an international wire transfer (often via <a href="https://www.skydo.com/blog/swift-money-transfer-ultimate-guide">SWIFT</a>). It can be flat, variable, and sometimes deducted from the sent amount depending on the fee setting.

2) Intermediary / correspondent (lifting) bank fees on the SWIFT route

Your payment can pass through one or more correspondent banks before it reaches India. Each <a href="https://www.skydo.com/blog/intermediary-bank-meaning-and-hidden-fees">intermediary</a> may deduct a fee—often without a visible breakdown on your side.

Some Indian banks charge to process inward remittances. This can be a flat fee (common), and it may be deducted before you see the final credit.&nbsp;

4) Platform fees (PayPal, Wise, Payoneer, etc.)

If your client pays through a platform instead of a direct bank transfer, the platform charges a transaction fee (often a percentage).

PayPal international transfer fee (India — receiving)

PayPal’s India business fee page lists 4.40% + a fixed fee for commercial transactions (fixed fee depends on currency; for USD, it’s typically $0.30). <a href="https://www.skydo.com/blog/paypal-in-india-charges-review-alternatives">PayPal</a>
This is why PayPal is convenient, but can become expensive for frequent or larger invoices.

5) FX markup (hidden in the exchange rate)

Banks and several platforms don’t convert at the “<a href="https://www.skydo.com/blog/forex-markup-fee-explained">Google rate” (mid-market</a>). They quote their own rate, which effectively includes an FX spread/markup. Many providers describe this as a fee on top of a base rate.

PayPal itself explains that its currency conversion rate includes a “currency conversion fee” added to the exchange rate you see. PayPal
In practice, markups can commonly land in the 1%–4% range depending on provider, corridor and customer segment.

Where your money actually disappears (realistic ranges)

Exact numbers vary by bank, corridor, and how the transfer is sent (OUR/SHA/BEN). But these ballparks help you estimate your real cost.

Sending bank / international wire transfer fee (client-side)

A realistic worked example (so you can sanity-check your payout)

Let’s say you invoice a client $1,000 and they pay via a traditional international wire/SWIFT route.

Assumptions (illustrative, but realistic):

Step 1: fees reduce the USD value before conversion

$1,000
– $30 (sending fee)
– $15 (intermediary fee)
– ~$3 (receiving-side processing equivalent)
= ~$952 left to convert

Step 2: FX markup reduces the INR you receive

If mid-market is ₹83.85/USD, a 2.5% worse rate is ~₹81.75/USD.

If you expected $1,000 × ₹83.85 = ₹83,850, the gap is ~₹6,000+—roughly 7% of your invoice in this scenario.

Important: sometimes the deduction pattern differs (fees taken separately vs from principal), and some payments go through multiple intermediaries. That’s why two freelancers can invoice the same amount and still receive meaningfully different INR.

Small and mid-ticket payments ($100–$1,000)

Fixed costs (like a $25–$40 wire fee) hurt more as a percentage of your invoice. A $30 fee on $300 is brutal; on $10,000, it’s background noise.

Even if a cheaper method exists, the client might default to what’s approved internally: SWIFT, PayPal, or a preferred PSP.

Fee responsibility isn’t always defined

If your invoice/contract doesn’t clarify who pays charges, you can end up absorbing deductions you didn’t plan for.

Most freelancers only see the final INR credit—no clean breakdown across wire fees, intermediary fees, and the exact exchange rate logic.

How to reduce international bank transfer fees (practical playbook)

1) Choose the right rail for your invoice size

A simple framework that works well in practice:

Under $500 (high friction, low ticket):

$500–$2,000 (core freelance range):

2) Invoice smart so deductions don’t surprise you

Add one of these lines to your invoice/contract:

Also list your preferred payment methods clearly:

Turn five $200 payments into one $1,000 milestone.
Fewer transfers = fewer fixed fees.

4) Track money transfer rates, not just fees

5) Don’t use P2P or “gift” routes for work income

They can look cheaper, but create messy accounting later:

Documentation: keep it clean (and save yourself during tax/audits)

What it is: <a href="https://www.skydo.com/blog/what-is-export-invoice">your invoice </a>is your bill with service details, amount, currency, and terms.
Why save it: establishes gross income and anchors your reconciliation.

Platform/PSP statements (PayPal, Wise, Payoneer, etc.)

What it is: transaction receipt/statement showing fees and client payment details.
Why save it: supports fee deductions as legitimate business expenses.

Bank credit entries (inward remittance credit)