Best Ways to Receive International Payments in India – P2P, B2P, B2B

India has been receiving record remittances for a few years. As per figures from the World Bank, in 2022 India received USD 111 billion in remittances. This figure increased to USD 125 billion for the year 2023. 

What are the methods of receiving international payments in India?

There are various methods to accept international payments in India. There are different platforms to process the remittances. These are as follows: 

• P2P (Person to Person): Also known as Peer to Peer services, these are decentralised fintech platforms in the business of providing money transfer services where technology plays a major role in connecting the two parties to a transfer directly without the need for any third-party intermediaries. P2P services have attained immense popularity over the last decade as they are convenient to use and very fast. Money transfers using P2P services take a few seconds at most to execute. 

The following are the popular P2P money transfer services in India:

• Wise (formerly known as TransferWise): Wise is known for its competitive exchange rates and the low fees they charge for their services. Google has partnered with Wise to enable users of the Google Pay App in the US to send money to India. This is a platform perfect for smaller transactions. 

• Xoom: This platform is owned by PayPal. It is known for convenience and speed in the transfer of funds between two people. Xoom has integrated with NPIL’s / NPCI’s United Payments Interface (UPI) platforms and offers inter-bank transactions in India. This platform is good for people who send payments occasionally.

• PayPal: PayPal is one of the oldest and most reputed and popular platforms for P2P transfers. PayPal employs advanced-level encryption, authentication and fraud prevention measures in order to protect the financial information and the data on transactions taking place on its platform. PayPal however charges comparatively higher fees for transactions.

• B2B (Business to Business): Business to Business services refer to those which are used for settling payments between two firms as the consideration of a business transaction. B2B transactions are those which carry the highest value overall as they are consideration for trade transactions, be it for products or services. 

The following are the most popular B2B money transfer options in India:

• LeRemitt: It is an international trade platform specifically tailored for MSMEs in the country. The platform comprises a cross border payments platform – which enables exporters to remit money at zero forex margins and gives them access to virtual FCY accounts. The payments platform is available in USD and remittances can be done from 140+ countries. The second product is a trade finance solution, being offered to goods exporters helping them finance 80% of their invoice value upfront.
  
• Standard Wire Transfer Through Banks: Wire transfer payments between banks are the most popular method used in B2B payments. Here, the remitting business instructs its bankers (based overseas) to remit a certain amount of money in foreign currency, as per the agreements and invoices, to their Indian correspondent. The details of the bank account of the Indian correspondent, such as bank account number, bank name and SWIFT code of the bank, along with details of correspondent banks, if required, need to be submitted to the overseas bank. This is the traditional method of transferring money in B2B transfers. The funds are converted into INR and credited to the Indian trade partner’s account.  Wire transfers through banks, although safe and fool-proof, are slow, and the charges are high.

• Multi-Currency Accounts (MCAs): This is a B2B payment method similar to wire transfers through banks. The difference lies in the fact that the funds are retained as foreign currency in the Indian trade partner’s bank accounts for future use. This helps hedge against the volatility in the foreign exchange market. The time taken is the same, but the charges are slightly less as the conversion of the foreign currency does not take place.

• PayPal Business: PayPal does offer a facility for business users. However, the charges are quite high.
  

• B2P (Business to Person): Business to Person services are used by firms to transfer funds to individuals’ bank accounts. It may include bulk payments, which are often executed from the end of the firm using the software provided by banks or fintech companies. These platforms provide multiple payment options and are primarily used by businesses to receive payments from individuals seamlessly across borders. 

The following are the popular B2P money transfer services in India:

• Instamojo: Instamojo is a platform that offers several services, including seamless payment links and payment gateways. It is known for its speed of transactions, the data points collected and the various analytical services it offers at reasonable rates. This platform is ideal for online businesses as it offers payment gateways, payment links, smart links and embedded payment buttons.

• Stripe Atlas: Stripe is used by a large number of companies of all sizes to provide online payment solutions globally. It is used to accept, and more relevant to our discussion, to process online payments, both one-time as well as recurring. The platform may be used as a fully integrated and embedded API-only option, and also on the mobile phone platform. Stripe provides a reliable and speedy platform. It is ideal for start-ups and online businesses.

Factors to Consider While Choosing a Method to Receive International Payment

The method used to receive an international payment in India depends on several factors. Some such factors to consider are as follows:

• Transaction Volume: If the volume of your transaction is high, you need to consider a method which is cost-effective. You may benefit from reduced rates from banks and payment gateways. The rates to be charged for high-volume transactions are subject to negotiations.

• Transaction Size: Smaller transactions by amount may be more suited for P2P methods, which are faster and charge low fees.
  
• Currency Conversion: Every platform will have different markups for the conversion of foreign currency to INR. Certain platforms have separate charges for this. Consider both aspects when choosing the method to receive your international payment.

• Speed of Transfer: As you have read above, the speed of transfer differs for different types of platforms. Choose a platform where you are comfortable with the processing time.

• Ease of Use: Choose a platform that is easy and uncomplicated but, at the same time, does not compromise the safety of your data and provides you with the relevant details along with the fund transfer. It is extremely important to go for a secure and trusted as well as efficient platform.

Conclusion

There are various platforms and companies available to receive your international payments in India. Choose one as per your requirements. Also do keep in mind the tax implications of any international income you receive in India.