A Vostro account is a bank account in Indian Rupees that an Indian bank holds for a foreign bank. It helps process international payments coming into India.

You don’t need to open or manage one yourself, but every time a client from abroad pays you, a Vostro account might be quietly working in the background. It affects how quickly you get paid, how much you lose in fees, and how easy it is to get compliance documents like FIRA or e-BRC.

In this blog, we’ll break it down simply, what a Vostro account is, how it works, and why it matters if you get paid from international clients.

“Vostro” is a Latin word, meaning “yours.”&nbsp;

In banking, a Vostro account is an account that a domestic bank in India maintains on behalf of a foreign bank, in Indian Rupees, to settle international payments. So it is essentially "your account" in "my bank". A Vostro account makes it possible for international clients to pay Indian freelancers, exporters, or businesses directly in INR.&nbsp;

Why Vostro Accounts Matter for Indian Exporters, Freelancers and MSMEs

Vostro accounts allow Indian banks to hold foreign payments on standby. Instead of going through multiple intermediate banks (which delays transfers), the funds move directly into your INR account, reducing settlement time and uncertainty.

Since Vostro transactions bypass some SWIFT intermediaries, there are fewer cuts taken out. That often means better effective exchange rates and lower fees compared to traditional SWIFT transfers.

Because the money arrives through official Vostro channels, your payment qualifies for RBI-compliant documents like FIRA and e-BRC, essential for taxes and export subsidy claims. No more manual follow-ups with the bank.

With Vostro infrastructure, you can get paid in foreign currencies like USD, GBP, EUR, even though you only hold an INR account in India. It’s the easiest way for Indian users to receive international payments.

How Does Skydo Leverage Vostro Accounts to Simplify International Payments?

You may not see it, but every time you get paid via Skydo, there’s a powerful Vostro-backed infrastructure working for you behind the scenes.

We’ve built our infrastructure on top of Vostro accounts held with globally trusted banks, like Barclays (UK/EU), Community Federal Savings Bank (US), and Digital Commerce Bank (Canada). These accounts let us receive international payments directly in local currencies and settle them to your Indian account seamlessly.

So, while most businesses and freelancers don’t ever see a Vostro account, at Skydo, it’s what keeps your payments fast, compliant, and frustration-free.

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Many apparel and textile exporters still lose profit margins due to embedded state and central taxes that aren't refunded through GST.&nbsp;

RoSCTL (Rebate of State and Central Taxes and Levies) replaced the earlier <a href="https://www.dgft.gov.in/CP/?opt=meis">MEIS scheme</a> for the textile sector, helping Indian exporters stay cost-competitive by refunding these hidden taxes.

The India scheme covers state and central levies not addressed under GST, providing relief that can be the difference between profit and loss for businesses with thin margins. While the application process requires proper documentation, the margin improvement makes it worthwhile.

This guide covers the RoSCTL scheme benefits, its eligibility, and how to claim it.

Who Is Eligible for the RoSCTL Scheme (2025 Guidelines)

Many apparel and textile exporters still lose out on margins due to embedded state and central taxes that aren't refunded through GST. RoSCTL replaced the earlier MEIS for the textile and garment sector, helping the Indian export sector stay cost-competitive in global markets.

The scheme is only available to exporters of Apparel (Chapter 61 &amp; 62 of <a href="https://www.dgft.gov.in/CP/?opt=itchs-import-export">ITC-HS codes</a>) and Made-ups (Chapter 63).&nbsp;

You're likely covered if you're exporting t-shirts, bed linen, scarves, or other fabric-based goods. The scheme refunds embedded indirect taxes like electricity duty, VAT on fuel, and central excise duty on raw materials that GST doesn't address.

RoSCTL provides duty credit scrips - digital certificates issued by DGFT website that function like tradeable vouchers for paying customs duties. These scripts can:

For many MSME exporters, these scrips can add up to 3 - 6% of the FOB value, significantly boosting net margins by refunding embedded state and central taxes.

The RoSCTL process is straightforward and entirely digital, flowing seamlessly from export declaration to credit availability. Understanding this workflow helps exporters maximise their benefits efficiently.

Here are the steps to successfully claim RoSCTL:&nbsp;

Step 1: Ensure IEC, GST, and ICEGATE registration. You need a valid IEC (Import Export Code) and GSTIN for GST compliance, and you must be registered on ICEGATE with at least one GSTIN attached to access export incentive schemes like RoSCTL.

Step 2: File export under chapters 61–63 with the correct RoSCTL declaration. Submit the shipping bill through ICEGATE, ensuring the HS codes (61, 62, 63) are correct. Declare RoSCTL in the shipping bill using specific scheme codes at the item level.

Step 3: Track RoSCTL scrip issuance in ICEGATE (under Rebate Mechanism). Once the EGM is filed and processed, a scroll with all individual Shipping Bills for the admissible amount will be generated and made available in your ICEGATE account under the E-Scrip Module.

Step 4: Download and use scrips via the customs portal or trade. The duty credit amount will be available within the ledger created for the IEC holder in their ICEGATE login to claim and convert into duty credit scrip, which can be used for paying Basic Customs Duty or transferred to other entities.

Step 5: Maintain a record for GST, refund, and income tax purposes. Exporters must maintain records of shipping bills and all export-related documents for three years from the date the scrip was issued for post-issue scrutiny and recovery purposes, and ensure proper GST compliance through GSTR-1 filing.

RoSCTL (an initiative by the government of India) rates are notified via <a href="https://www.dgft.gov.in/CP/">DGFT </a>and <a href="https://taxinformation.cbic.gov.in/view-pdf/1003137/ENG/Circulars">CBIC circulars</a>, varying by HS code and product. The Ministry of Textiles notifies rates under the scheme in four schedules. Schedules 1 and 2 specify the Central and State taxes and levies for apparel and made-ups, while Schedules 3 and 4 give the Central and State taxes applicable for apparel export products when fabric has been imported duty-free under the Special Advance Authorisation Scheme.

💡Pro tip: Match the HS code in your invoice and shipping bill exactly with the notified RoSCTL code for accurate credit calculation, as benefits are calculated based on declared export FOB value or up to 1.5 times the market price, whichever is less.

Understanding the differences between these export incentive schemes helps Indian textile exporters make the right choice and to achieve maximum benefits.

If you're exporting both garments and packaging (e.g., cotton bags), split your RoSCTL and RoDTEP claims accordingly, use RoSCTL for textile items under eligible chapters and RoDTEP for other products like packaging materials that fall outside the textile classification.

Even small errors can lead to significant delays or loss of benefits. Here are the most frequent mistakes exporters make when claiming RoSCTL:

Filing under wrong HS codes or chapters - Ensure your products are classified under the correct chapters 61, 62, or 63 of ITC-HS codes, as RoSCTL is only available for apparel and made-ups under these specific classifications. Hence, make sure to input accurate information&nbsp;

Forgetting to tick the RoSCTL declaration in shipping bills - You must make a specific declaration in the shipping bill using appropriate scheme codes at the item level, as the absence of proper scheme codes means the RoSCTL benefit would not be available

Not checking ICEGATE regularly for issued scrips - RoSCTL scrips are typically issued within 2-4 weeks after customs clearance, and you need to actively monitor your ICEGATE account under the E-Scrip Module to claim and convert credits into duty credit scrips

Assuming RoSCTL auto-applies, you must declare it during export filing. The scheme requires active declaration by the exporter in the shipping bill at the time of filing, as benefits are not automatically processed without proper claim submission and scheme code selection

💡Pro tip: Double-check your HS codes against the RoSCTL rate schedules before filing, and always verify that your RoSCTL declaration appears correctly in your shipping bill to avoid processing delays.

While RoSCTL helps reduce your export costs through tax rebates, managing international trade and payments efficiently is equally crucial for your export business success.

Skydo streamlines your export payment process with:

Why this matters for RoSCTL exporters: Since you need to maintain proper documentation of foreign exchange receipts for RoSCTL compliance, <a href="https://www.skydo.com/blog/automated-firc-simplifying-international-payments-compliance">Skydo's instant FIRA</a> and real-time tracking ensure you have all necessary records for scheme benefits and GST refunds.

Combine RoSCTL tax savings with Skydo's payment efficiency to maximise your export profitability. Through RoSCTL, you can save on embedded taxes while reducing FX costs and processing delays through smarter payment solutions.

<a href="https://www.skydo.com/">Explore Skydo!</a>

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Most Indian freelancers, exporters, and even startups have never heard of a Nostro account. Yet this behind-the-scenes banking mechanism quietly affects how fast you get paid from abroad, what fees get deducted, and how smooth your compliance documentation (like FIRA/eBRC) process is. 

In this article, we’ll break down in plain English what a Nostro account is, how it works, and why it matters when you’re receiving money from overseas.

What Is a Nostro Account? (Meaning in Banking)

A Nostro account is essentially a foreign currency bank account that one bank holds in another country’s bank. In other words, it’s “our account” held with your bank in your country’s currency.&nbsp;&nbsp;

For example, an Indian bank like HDFC might hold a USD account with Citibank in the U.S.; that USD account is HDFC’s Nostro account (from HDFC’s perspective). It allows HDFC to park and move funds in U.S. dollars abroad on behalf of its customers. From Citibank’s perspective, the same account is called a Vostro account (since it’s “your account” in their books)&nbsp;(We’ll focus on Nostro here; Vostro is basically the flip side, which we cover in another blog.)

In simple terms, a Nostro account lets banks handle foreign currency transactions without needing a physical presence in that foreign country. It’s how your Indian bank can send/receive dollars, euros, etc., even though you don’t hold those currencies yourself. The bank uses its Nostro accounts with correspondent banks abroad to do that.&nbsp;&nbsp;This is a common practice in international banking, forming the backbone of correspondent banking networks.

Only banks (and authorised financial institutions) can open Nostro accounts.&nbsp;Individuals or normal businesses cannot open one directly. In India, RBI-authorised banks (known as AD Category-I banks, e.g. SBI, HDFC, ICICI) maintain Nostro accounts in major foreign currencies to facilitate their customers’ international transactions. You, as a freelancer or company, do not need to open a Nostro account yourself; your bank handles that behind the scenes.

How Does a Nostro Account Work? (Step-by-Step Example)

Let’s illustrate how a Nostro account functions with a simple example:

Scenario: Ramesh is a freelance consultant in India, and his client John in the USA wants to pay him $1,000 for a project. Ramesh uses HDFC Bank in India to receive the payment.

Here’s what happens behind the scenes when John pays Ramesh $1,000:

Payment Initiation: John sends $1,000 from his U.S. bank (say, Citibank) to Ramesh’s account. This international payment (often via a SWIFT wire) is not sent directly to Ramesh’s INR account. Instead, it’s directed to HDFC Bank’s USD Nostro account in the USA (for example, HDFC’s Nostro with Citibank)

Funds Received in Nostro: The money lands in HDFC’s USD Nostro account at Citibank. Essentially, Citibank credits HDFC’s account on its books with $1,000 on behalf of Ramesh.&nbsp; HDFC now has an extra $1,000 in its U.S. account.

Confirmation &amp; Transfer to India: HDFC Bank gets confirmation of the credit in its Nostro account. It will then transfer the funds from the Nostro account to India (often through internal networks or the SWIFT system) to convert and credit Ramesh’s local account. (In practice, this may involve HDFC instructing Citibank to send the $1,000 to HDFC’s account in India or adjusting balances accordingly.)

Currency Conversion: Before crediting Ramesh, HDFC converts the USD 1,000 into Indian Rupees. They use the prevailing exchange rate on that day. For example, if the rate is ₹82 per USD, the $1,000 would convert to ₹82,000 (minus any applicable charges or FX margin the bank applies).

INR Credit to Ramesh: Finally, HDFC credits Ramesh’s local INR account with the converted amount (around ₹82,000 in this example). Ramesh sees the payment in rupees in his account statement. The original $1,000 never directly touched Ramesh’s hands – it was handled by HDFC’s Nostro account abroad and then exchanged to INR for him.

Throughout this process, Ramesh didn’t need to deal with foreign banks or hold a dollar account. HDFC’s Nostro account in the U.S. acted as the receiving bucket for the dollars and took care of conversion. This is how you receive foreign client payments seamlessly into your Indian bank account without any foreign currency account of your own.

Key points: The use of Nostro accounts means the payment often travels through the international banking network (e.g. via SWIFT) to the Indian bank’s correspondent account, then to your account. Every major Indian bank has such Nostro tie-ups to handle remittances from different countries/currencies.

Why Nostro Accounts Matter (Benefits for Freelancers, Exporters &amp; Businesses)

Even though you don’t manage the Nostro account yourself, it has important implications for your international payments. Here’s why Nostro accounts matter for anyone receiving money from abroad in India:

So, while you, as an exporter or freelancer, don’t manage Nostro accounts, knowing that your bank or payment platform uses reliable Nostro channels gives confidence. It means your money will likely arrive faster, with fewer deductions, and with proper RBI-compliant records – all without you having to do anything extra.

Skydo Tip: Get Paid Faster with Local Virtual Accounts (Nostro in the Background)

Modern fintech platforms are leveraging Nostro accounts to simplify international payments further. For instance, Skydo provides a solution where you get a local receiving account in your client’s country, but the heavy lifting is done via Skydo’s Nostro accounts. Let’s understand how this works with an example:

Example: Riya is a freelance designer in India. Her client, Matt, is in the US and owes her $1,000 for a project. Riya uses Skydo to receive the payment. Here’s what happens behind the scenes:

Skydo offers such virtual receiving accounts not just in USD but also in other major currencies like GBP, EUR, SGD, CAD, etc., backed by trusted global banking partners (e.g. Barclays in the UK/Europe, Digital Commerce Bank in Canada, DBS in Singapore, among others). This Nostro-backed system lets freelancers, SaaS businesses, and agencies get paid faster, avoid hidden forex markups, and stay fully compliant, without any back-and-forth with your bank for each payment.

Want to see how it works for you? You can create your free Skydo account in just 5 minutes and start receiving global payments with ease. 🚀

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Imagine you’re an international buyer,&nbsp; say, a U.S. company, and your Indian supplier has sent an invoice asking you to pay into a “Skydo Virtual Account” instead of a traditional Indian bank. It’s natural to wonder: Is this safe and legal? The short answer is yes. 

In fact, you’d be in good company: Amazon, Stanford University, Microsoft, and many others already use Skydo’s <a href="https://www.skydo.com/blog/virtual-account-numbers">virtual accounts</a> to pay their Indian vendors. Skydo’s virtual accounts are simply local bank accounts set up for each currency (USD, EUR, CAD, SGD, etc.) and are backed by real regulated banks. Paying into a Skydo account means you’re actually sending money to a major bank (in the U.S., Europe, Singapore, etc.), not into some anonymous wallet.

In practice, you wire dollars to a Community Federal Savings Bank (New York) account or send euros to a Barclays<a href="https://www.skydo.com/blog/iban-number-meaning-full-form">/IBAN account,</a> and Skydo’s system credits the Indian exporter and provides them with the required digital paperwork (<a href="https://www.skydo.com/blog/all-you-need-to-know-about-firc-a-complete-guide">the FIRA</a>) for RBI&nbsp; (India’s central bank, regulating the financial system) compliance. This process is faster, cheaper and more transparent than a traditional <a href="https://www.skydo.com/blog/swift-money-transfer-ultimate-guide">wire/swift transfer</a>,&nbsp; and it comes with industry-grade security.

How Virtual Accounts Work – Faster, Cheaper, Transparent

A “virtual account” in Skydo’s terms works like this: when your vendor signs up with Skydo, they instantly get bank accounts in 10+ countries (USD, EUR, CAD, GBP, AUD, SGD, etc.). From the payer’s perspective, you just wire money to a normal-looking bank account in your country or region.&nbsp;

Behind the scenes, Skydo’s platform collects that money, converts it at real-time mid-market rates with a minimal fee, and remits INR to the exporter’s Indian account. This avoids the usual multi-bank wire chain and opaque fees of traditional FX. For example, Skydo charges a flat USD $19 for payments up to $2,000, or $29 up to $10,000, with zero hidden markups.&nbsp; The exporter covers the fee, so you can pay the full invoice amount without worrying about extra charges or deductions.

Unlike international wire transfers to Indian bank accounts, payments to a Skydo virtual account are treated as local transfers. That means you skip SWIFT fees, avoid lengthy settlement timelines, and don’t have to deal with repeated follow-ups from your supplier. Funds typically clear within 24–48 hours.

One reviewer of Skydo noted that using it was “an amazing experience … completely hassle free” for international invoicing In short, paying to a Skydo virtual account means your money moves as if it were a local transfer (often clearing in 24 hours) while the exporter still gets the correct tax-compliant confirmation (FIRA) on their end.

Skydo runs on global financial rails, partnering with banks you already know and trust.

For example, <a href="https://www.bankingcircle.com/banking-circle-partners-with-skydo-to-accelerate-cross-border-collections-for-indian-businesses/">Banking Circle (a fully licensed next-generation bank with central bank access in Europe) has entered a strategic partnership with Skydo</a> to expand payment options for UK/EU and&nbsp; Australian clients.&nbsp;

In Asia, Skydo uses accounts at DBS Bank (Singapore). For USD payments, Skydo issues accounts via Community Federal Savings Bank (a New York bank). For Canada, it uses Digital Commerce Bank (a regulated Canadian bank), and for Europe/UK, it taps banks like Barclays and other IBAN providers.&nbsp;

In India, Skydo partners with HDFC Bank (one of India’s largest private banks) to reconcile the rupees on the exporter’s side. It even leverages Currencycloud (a Visa company) for multi-currency accounts.&nbsp; In short, every virtual account is held at a major bank – you’re not sending money into thin air, but into real bank rails.

“We’re constantly in search of global rails that make payments faster, cheaper and more compliant,” says Skydo’s CEO Srivatsan Sridhar, about their Banking Circle tie-up.&nbsp; By “rails”, he means real bank accounts and networks. Thanks to these partnerships, US and European buyers pay in dollars or euros as normal. Skydo’s system handles the rest, offering local payment details for multiple currencies in just a few minutes

Beyond the banks, Skydo invests heavily in security and compliance. The platform is ISO 27001 certified and AICPA SOC 2 compliant, meaning it meets top industry standards for data protection and system reliability. All payment data is encrypted in transit and at rest, with strict access controls. Skydo also requires two-factor authentication on logins and continuously monitors for any suspicious activity.

Skydo’s team (with AI-powered tools) actively flags anomalies in real time: every transaction is screened against AML/KYC rules, and any unusual pattern is immediately investigated. As Skydo notes, “if anything seems amiss, we immediately investigate to ensure your data’s integrity and our platform’s security” Put simply, paying via Skydo is as safe as any major bank transfer – probably safer, since their systems are built for secure global flows.

Skydo is also fully approved by regulators. It recently received in-principle authorisation from India’s Reserve Bank (RBI) to operate as a Payment Aggregator – Cross Border (PA-CB) entity. This is the same RBI framework that governs other licensed fintechs such as<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">Transferwise</a> etc. to process cross-border flows in India; it means Skydo must follow strict rules on transaction security, compliance and audit. In short, RBI has vetted Skydo’s model. By now, Skydo serves over 20,000 Indian exporters and processes hundreds of millions of dollars annually, so your payments become part of a well-established system, not a back-alley workaround.

Key reasons to trust Skydo’s virtual accounts:

In short, paying into a Skydo virtual account is simply a modern, regulated way to move money internationally. It offers the same level of security as wiring to a major global bank, while being far more convenient for both you and the exporter. By using trusted global banks and following global compliance, Skydo makes cross-border invoicing as seamless as domestic payments. The next time an Indian partner asks you to pay via Skydo’s virtual account, you can be confident it’s secure, compliant, and in fact better than the old wire-transfer route.

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SWIFT has been the foundation of global payments for decades, connecting banks across borders and powering trillions in international transactions.

For many Indian exporters, freelancers, and digital-first businesses, it remains the default route for receiving payments from overseas clients.<a href="https://www.pib.gov.in/PressReleaseIframePage.aspx?PRID=2098447#:~:text=Export%20Classification%20and%20Growth%20Trends,%2C%20financial%2C%20and%20business%20services."> However, as India’s cross-border activity expands, with service exports surpassing $340 billion</a>, the need for more agile, transparent, and cost-efficient alternatives is becoming increasingly clear.

While SWIFT is robust and trusted, it can involve intermediary fees, slower settlement times, and limited visibility, especially for smaller businesses looking to move fast.

In this blog, we’ll break down where SWIFT falls short and which modern alternative is helping Indian businesses receive international payments faster, cheaper, and with more control.

<a href="https://www.swift.com/homepage">SWIFT (Society for Worldwide Interbank Financial Telecommunication</a>) is the backbone of global payments. It connects over 11,000 banks in more than 200 countries and is known for its security and reliability.

But when it comes to everyday business needs in 2025, especially for Indian MSMEs and freelancers, SWIFT transfers come with a few practical challenges.

SWIFT transfers often involve more than one bank. This means you may face

In short, you might not always get the full amount you’re expecting, and the final landed value isn’t always predictable.

SWIFT payments can take 3–5 business days, sometimes longer, especially if multiple banks are involved. Delays can happen due to:

For businesses with frequent payments or tight cash cycles, this waiting period can slow things down.

If you receive international payments in India, you’ll need a <a href="https://www.skydo.com/blog/all-you-need-to-know-about-firc-a-complete-guide">Foreign Inward Remittance Advice (FIRA)</a>, a document that proves you received money from abroad. It’s required for:

The catch? Most banks don’t issue FIRAs automatically. You often have to raise a request, wait for days, and pay a fee every single time.

Virtual Accounts: A Simpler, Faster Alternative to SWIFT for Global Payments

As international business becomes more digital, virtual accounts are emerging as a smarter alternative to SWIFT, especially for Indian exporters, freelancers, and SaaS founders.

Think of a virtual account as your local bank account in a foreign country, without actually having to open one there. You get unique account details like your account number and region-specific details like a US ACH routing number or UK sort code that allow international clients to pay you like a local.

So instead of wiring money through the traditional SWIFT network (which can involve multiple banks, extra fees, and longer delays), your client can just use a simple domestic transfer method like ACH in the US or SEPA in Europe.

Today, several fintech platforms offer virtual accounts to Indian businesses, helping them receive USD, EUR, GBP, and other currencies without traditional friction. Skydo is one of them, designed specifically for Indian exporters and freelancers. Others include Wise, Infinity, Payoneer, and PingPong and others, each with different pricing models and features.

If you're looking for a faster, more affordable way to receive global payments, virtual accounts are worth a closer look.

Skydo: A Smarter Alternative to SWIFT for Indian Exporters

For Indian freelancers and businesses, dealing with international payments often means juggling delays, deductions, and paperwork. Skydo offers a cleaner, more transparent alternative to Swift to receive payments without the usual back and forth.

Local virtual accounts in major countries


With Skydo, you get local account details in places like the US, UK, Australia, and Singapore.
So if your client is in New York or London, they can just make a domestic transfer,&nbsp; no SWIFT, no middlemen, no confusion.

Superquick settlements, no guessing&nbsp;

Once the money hits your virtual account, it’s converted to INR at live exchange rates (no markup) and lands in your Indian bank account in about 1-2 business days.
The pricing? Simple and predictable:

Because there are no surprise deductions or forex games, you often end up saving a good chunk of money, sometimes over ₹10,000 on a $5,000 transfer compared to a typical SWIFT route.

Skydo also handles the compliance side. You get FIRA instantly after each payment. No chasing banks. No follow-ups. Just download and go.

Skydo makes cross-border payments faster, cheaper, and stress-free for Indian business owners. It combines ease of use with low costs and clarity, which makes it an ideal SWIFT payment alternative.

Get started with Skydo in just 5 minutes. <a href="https://www.skydo.com">Sign up now.</a>&nbsp;

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India’s export story is a headturner: <a href="https://www.pib.gov.in/PressReleasePage.aspx?PRID=2126119">US$824.9 billion in FY 2024–25</a>, a promising 6% growth over the previous year.&nbsp; So if you are a freelancer or a business owner, this is the right time to take advantage of the momentum and expand your business overseas.

But, behind this impressive headline, there is a costlier reality. Many small Indian business working with overseas clients are giving their profits to hidden international transaction charges.&nbsp;

In this blog post, we'll uncover these hidden charges and provide practical tips to help you keep more of what you earn from foreign currency transactions.

Common International Transaction and Payment Charges

What are the different types of foreign transaction fees? When are they applied? What is the total cost? We answer all of these questions in this part of the blog.

When a client sends you money via a <a href="https://www.skydo.com/blog/swift-money-transfer-ultimate-guide">SWIFT transfer</a>, their bank typically applies an outward SWIFT fee, usually ranging from $15 to $30 per transaction.

In many business cases, this fee is either deducted from the payment amount or passed on to the recipient. Additionally, the payment may pass through multiple intermediary banks, each potentially charging its own fee, making the total cost difficult to predict.

Once the payment reaches your Indian bank, some banks may also levy an inward SWIFT fee, further reducing the final amount credited to your account.

While SWIFT transfers are widely used and secure, it’s important to be aware of these layered charges, as they can impact the net amount you receive.

When you receive international payments, banks usually convert the foreign currency to INR using a rate that includes a <a href="https://www.skydo.com/blog/forex-markup-fee-explained">forex markup</a>, typically around 1% to 3.5% above the mid-market exchange rate (the actual rate you see on platforms like Google or XE).

This markup isn’t shown as a separate fee. Instead, it's baked into the exchange rate you're offered. For instance, if the mid-market rate is ₹83 = $1, your bank might convert it at ₹80.5, meaning you receive less per dollar.

Over larger transfers, this difference can add up. On a $10,000 payment, a 3% markup could result in nearly ₹25,000 less than what you'd get at the mid-market rate.

While this is standard practice across many banks and platforms, it's worth understanding how it affects your final payout, especially if you're receiving payments regularly.

As part of RBI compliance, anyone receiving international payments in India must obtain a <a href="https://www.skydo.com/blog/automated-firc-simplifying-international-payments-compliance">Foreign Inward Remittance Advice (FIRA)</a>, a document that confirms the inward remittance and serves as proof for audits, tax filings, or export benefits. This document is typically issued by the receiving bank in India, often for a fee. For example, HDFC Bank charges ₹200 + 18% GST per FIRA, while <a href="https://www.idbibank.in/pdf/IDBI-Trade-Current-Account.pdf">IDBI Bank</a> may charge up to ₹150 + GST per remittance.

While the fee might seem small, it can add up quickly for businesses or freelancers handling frequent international transactions, making it important to factor in when evaluating total payment costs.

Payment gateways like PayPal, Stripe make it easier for freelancers and businesses to receive payments from international clients. However, these platforms come with a mix of transaction and currency conversion fees that are important to understand.

For example, <a href="https://www.skydo.com/blog/paypal-transaction-fees-india">PayPal charges a 4.4% transaction fee </a>plus a fixed fee (typically $0.30 for USD). Additionally, a 4% currency conversion fee is applied on top of the prevailing exchange rate. This means the effective exchange rate you receive is usually lower than the market rate.

If a client sends $10,000, total deductions may be around $440.30, leaving you with $9,559.70. At an adjusted exchange rate of ₹81.6 per USD, the final amount in INR would be about ₹7,80,071. At the mid-market rate of ₹85/USD, the amount would have been ₹8,50,000, a difference of nearly ₹70,000.

While these platforms offer ease of use and global acceptance, it’s worth comparing fees and exchange rates, especially for larger payments or high volumes.

To understand the impact of these charges, let's see how much you would actually receive from a 10,000 US Dollars payment through different payment methods:

Bank (SWIFT Transfer) Fees: $30 SWIFT fee&nbsp; Forex Markup: ~2% Amount After Fees: $9,970&nbsp; Exchange Rate: ₹83.3 (mid-market ₹85 - 2%)&nbsp; Final Amount: ₹8,30,201

PayPal
 Fees: 4.4% ($440) + $0.30 fixed fee Forex Markup: ~4% Amount After Fees: $9,559.70 Exchange Rate: ₹81.6 (mid-market ₹85 - 4%) Final Amount: ₹7,80,071

Wise Fees: $162 (1.62% conversion fee) Forex Markup: None (mid-market rate used) Amount After Fees: $9,838&nbsp; Exchange Rate: ₹85&nbsp; Final Amount: ₹8,36,230

Skydo Fees: Flat $29 Forex Markup: None (mid-market rate used) Amount After Fees: $9,971&nbsp; Exchange Rate: ₹85 Final Amount: ₹8,47,535

🧾 Assumption: Mid-market USD/INR rate = ₹85

Note: A few additional charges might apply. Like banks and Wise, they charge a fee for issuing an FIRA. The amount differs from one bank to another, and for Wise, the per FIRA charge is $2.5.

Tips to Reduce International Transaction Charges

Now that you know where hidden fees come from, here are some actionable ways to keep more of what you earn:

1. Monitor the Mid-Market Exchange Rate

Always check the live USD/INR rate on Google or XE before confirming a payment. This gives you a reliable benchmark to compare against what your bank or payment platform offers, and helps you spot any built-in markup.

2. Review Your FIRA or Credit Advice

Your Foreign Inward Remittance Advice (FIRA) or bank statement shows the exact rate applied. Compare this with the mid-market rate from the payment date to calculate the forex markup, it's often more than you think.

3. Negotiate with Your Bank (If You're Using One)

If you receive international payments frequently, speak with your bank about lowering forex markups or waiving inward SWIFT fees. Banks may offer better terms to customers bringing consistent foreign inflows, but only if you ask.

4. Use Virtual Accounts to Avoid SWIFT Fees

Platforms like Skydo and Wise offer virtual USD, EUR, and GBP accounts. These accounts allow your clients to pay you using local payment methods (like ACH or SEPA), avoiding SWIFT altogether. The result:

5. Choose Transparent Platforms 
 Avoid platforms that show only the “final amount” without explaining how it was calculated. Services like Wise use the mid-market rate and clearly list fees upfront. Skydo offers flat pricing till USD 10,000 and zero forex markup, so there are no surprises when the funds arrive.

Skydo: Transparent, Seamless International Payments

For Indian freelancers and businesses working with international clients, Skydo offers a cost-effective alternative to traditional banks and payment gateways. With Skydo, you benefit from:

Skydo is a transparent and cost-effective partner for freelancers and business owners with international clients. <a href="https://www.skydo.com/">Sign up now</a> to give it a trial.

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International transaction charges

BACS full form is Bankers’ Automated Clearing System. It is a 54-year-old payment system that’s been the backbone of UK (United Kingdom) banking. Operated by <a href="http://pay.uk">Pay.UK</a>, which is the organization responsible for overseeing the UK’s major payment systems, BACS is trusted by nearly all major UK banks for moving money electronically.

In this blog, we will help you understand what BACS is, how it works, and how you, as an Indian freelancer or business owner, can use BACS to receive payments in India from your UK clients.

BACS, or Bankers' Automated Clearing System, is the electronic payment system that manages everyday money transfers across the UK. It's trusted by individuals and businesses alike to send and receive funds securely between UK bank accounts. To give you a sense of scale, BACS processed<a href="https://www.wearepay.uk/wp-content/uploads/2024/11/Quarterly-Statistical-Report-2024-Q3.pdf"> 1.7 billion payments</a> with a total value of £1,473 billion in only the third quarter of 2024.

How BACS Payments Work (Timing and Process)

BACS payments follow a simple but structured process, so you always know when to expect your money.

A typical BACS transfer takes three working days from start to finish. Here’s how it works:

So, if a BACS payment is made on Monday, it will be credited to a user's account by Wednesday.

According to this timeline, BACS operates only on UK banking days (Monday to Friday). Payments submitted near weekends or public holidays will take longer. The BACS payment system advises users to download the<a href="https://www.bacs.co.uk/media/hvjgrldj/bacs-processing-calendar_2025.pdf"> processing calendar</a> so that they can plan their payments accordingly.

To receive a BACS Direct Credit, a user will need:

No <a href="https://www.skydo.com/blog/iban-number-meaning-full-form">IBAN </a>or <a href="https://www.skydo.com/swift-code-finder">SWIFT code</a> is required for BACS transfers, just these basic UK bank details.

If a company is dealing with BACS Direct Debit payments or setting up payroll, they also need a BACS Service User Number (SUN). The SUN is a unique six-digit number assigned to an organization, allowing it to collect payments through direct debits. But as a freelancer or exporter, you’ll mostly be working with Direct Credits.

Wondering about the costs and limits when using BACS? Here are a few aspects about BACS that you will find interesting:

BACS transfers are one of the cheapest ways to move money in the UK. Sending a payment usually costs between 5p and 50p per transaction as bank charges, depending on your bank or payment provider. That’s cheaper than other systems like CHAPS payments, which mostly cost £20–£30 per transfer. And<a href="https://www.skydo.com/blog/swift-money-transfer-ultimate-guide"> SWIFT international transfers</a> that cost anywhere from £5 to £25. BACS is designed for everyday business payments, so you keep more of the sender's earnings.

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