How Indian Freelancers Can Accept International Payments Easily

If you’re a freelancer working with international clients, you’ve probably faced this scenario, your payment is “sent,” but it takes days to arrive, might come with unexplained deductions, or simply get stuck because of bank formalities. 

For many Indian freelancers, global payments are laced with high fees, hidden FX markups, delayed transfers, and confusing compliance rules. One late SWIFT transfer or an unexpected deduction can easily eat into your hard-earned income. 

In this article, we’ll look at how you can accept international payments without losing time or money.

International payments are also called cross-border payments. In this setting, the payer and the payee are both located in different parts of the world. So essentially, international payments for freelancers are remittances that are made by clients outside India. These payments are in currencies like USD or EUR for your freelance services. 

There are multiple ways to receive international payments in India. Freelancers receive these payments via:

• SWIFT transfers
• Virtual accounts
• Bank transfers
• Cross-border payment platforms like Xflow

Freelancers face multiple challenges with global payments, most of which are related to high transaction fees, hidden charges, delayed transfers and complex regulatory and tax compliance. 

High transaction fees and hidden rates

Hidden rates like intermediary bank charges, high transaction rates and withdrawal fees can take away a large portion of your earnings, especially on the smaller invoices. Some platforms have unclear pricing, making it hard to predict the final amount you would receive. 

Delays in payment

If your client used traditional wire transfers, it can take up to several days or even weeks to settle the payment. This lack of predictable cash flow can make it difficult for you to manage finances for your business. 

Lack of transparency and tracking

Without the right tool, it can be difficult for you to track the status of an international payment. This can lead to uncertainty about when your funds will arrive, and you might have to get a manual follow-up with the bank or your clients.

Payment failures 

A simple typo in your bank account number or a SWIFT code can lead to a payment failure, or the funds can be sent to the wrong recipient.

Indian freelancers rely on platforms like Xflow, SWIFT, PayPal, Wise, and Payoneer to accept international payments securely. Each payment method offers unique features, and you need to compare factors like fees, speed, and compliance to pick the best payment gateway for your needs.

1. Xflow

Xflow offers multi-currency accounts, and all transactions are backed by one of the world’s largest banks - JPMorgan Chase. It also offers transparent pricing with zero FX markup and AI-powered FX management.

Pros:

• 24-hour settlements.
• Automated eFIRA for every transfer.
• Zero FX markup.

2. SWIFT

With SWIFT, your clients can wire money directly from their bank to yours using standard international codes. Banks handle it reliably for any amount, but you might expect some wait time and higher fees.

Pros:

• Direct transfer to your bank account.
• Highly secure for large amounts of global payments.

Cons:

• Payments can take up to 5 business days.
• Involves high transaction fees by banks, intermediary charges and currency conversion rates.

3. PayPal

PayPal supports seamless integration with freelancing marketplaces like Upwork and Fiverr. It also accepts card payments and transfers from over 200 countries. 

Pros:

• Global recognition.
• Provides buyer seller protection.
• Downloadable FIRA for your services from the dashboard.

Cons:

• High transaction fees.
• Many features of PayPal are not available for Indian freelancers.

4. Wise

Wise offers local virtual accounts with mid-market exchange rates and converts funds to INR without any hidden fees, making it perfect for your regular gigs.

Pros:

• Offers strong security features like multi-factor authentication.
• Transparent pricing.
• Markup-free currency conversions.

Cons:

• Limited payout methods.
• Customer service can be slow.

5. Payoneer

Payoneer works differently from the rest of the payment methods. It gives you a USD account linked to platforms like Fiverr and lets you withdraw via ATM or bank.

Pros:

• Payoneer to Payoneer account transaction incurs no charges.
• Offers security measures like two-step verification and firewalls.

Cons:

• Lacks payment gateway or POS system.

A Foreign Exchange (FX) markup is the hidden fees that banks and platforms add to the mid-market exchange rates you see online. When you receive foreign currency like USD in your account, multiple platforms may add a small percentage, around 0.5 to 3%, to cover costs and profit margin to the mid-market rate.

Banks generally embed it without listing it as a separate charge, but if you look closely at your bank account statement, you can spot the FX fees. 

For example, 

If you are receiving 10,000 USD from a client from abroad, the fees will be:

• Mid-market rate: 1 USD = 90.37 INR.
• Bank rate with 2% FX markup: 1 USD = 88.56 INR.

So your expected INR at the mid-market rate is : 9,03,700 INR. But you receive: 8,85,600 INR.

You can avoid FX markup by using no-markup payment platforms like Xflow. 

You can compare payment speeds across top methods to find the fastest option to receive your earnings. Xflow and Wise provide the 24 to 48-hour settlements that overcome the payment delays we see in SWIFT transfers.

International invoices for freelancers are simple if you follow a clear checklist. These basics keep you compliant and make it easy for clients to pay you on time. Here are some things to keep in mind when designing an invoice:

• You need to add your full legal name, business name (if any), address, email, and GSTIN (if you have one).

• Proceed with adding the client’s legal name, company name, billing address, and contact email.

• Use a unique invoice number and clearly mention the invoice date and due date.

• Clearly mention the currency of your earnings (USD, EUR, GBP, etc.) and your payment method (Xflow, Wise, SWIFT, PayPal, Payoneer).

• Describe your service, for example, UI/UX design for a website, along with quantity, rate, and total amount.

• Add “Export of Services - Name of the place of supply outside India” on the invoice if the client is outside India.

• Mention the correct tax treatment: If you have LUT, write “Supply under LUT – zero-rated export, IGST not charged”. And if you don’t have LUT but charge IGST, show the same separately.

• Include your bank details or collection account details: account name, account number/IBAN, bank name, SWIFT/BIC, and IFSC for INR credit.

• Add terms for late fee, revision terms, or milestone details and include your PAN on the invoice for tax records.

• Make sure to store the invoice in PDF format for more than 6 years for compliance needs and CA documentation. 

• You can also use invoicing tools to automate the process on platforms like Xflow and PayPal.

As an Indian freelancer, you must follow RBI and FEMA rules for international payments to avoid any fines or delays. The RBI looks at your freelance work as an export of services and accordingly sets certain legal requirements to meet compliance. 

One of the key steps towards achieving compliance is using correct RBI purpose codes like P0802 for software or P0807 for consulting on invoices and bank forms. And for no IGST charges on your foreign income, that is to treat your services as zero-rated exports, you need to file LUT on the GST portal annually. 

You need to maintain credible tax proofs like eFIRA from your payments platform or FIRC from your bank within 30 days of the transfer. Make sure you are using only current accounts for receiving international payments for freelancers and report your income in the ITR.

Xflow makes use of virtual multi-currency accounts to help you earn in a variety of currencies (like USD or EUR) across more than 140 countries. This platform charges minimal fees, speeds up cash flow, and uses automation to meet compliance.

• Multi-currency accounts: This feature offers you unique US/EU bank details for clients to pay directly without any SWIFT hassles or possibilities for rejection.

• Low transaction fees: Minimal fees with zero FX markup allow you to keep more of your earnings compared to PayPal’s 4.4% transaction fees with an additional fixed fee.

• Settlement in 24 hours: Xflow understands that faster settlements are an asset to your freelancing experience, so it guarantees settlements within 24 hours and is backed by one of the biggest banks in the world, JPMorgan Chase, to secure your transactions.

• Automated eFIRA: For every transfer you receive, eFIRA is generated automatically for RBI compliance and GST proofs.

• Simplified invoicing: Xflow allows you to create an invoice on the platform with a pay button, or you can even upload your preexisting invoice to the dashboard.

The right international payment gateway for your freelance needs is evaluated on factors like your specific needs in terms of volume, speed, and fees. You should focus on low FX markup and RBI compliance for maximum earnings as an Indian freelancer.

• Check for high or hidden fees first. If you have platforms that charge you a minimal transaction fee with transparent pricing, avoid opting for payment gateways like PayPal that can take over much of your earned profits.

• Prioritize speed. You can choose Xflow or Wise, which provide comparatively faster settlements than SWIFT transfers, which can take around 5 days on average.

• Look for features that ease compliance. Go for platforms that automate compliance documents like eFIRA for all transactions on Xflow.

• Consider your client’s convenience. Pick client-friendly payment options that save them the hassle of transferring your earnings and avoid delays in payment release. 

• Test with a transfer. You can do this exercise to compare the real rates and analyse support before you move on to large invoices.

By implementing certain tips for your workflow to receive international payments for freelancers, you can easily cut costs and speed up your payments. Here are some of these smart choices you can make to save thousands yearly on transaction fees and avoid delays.

• Go for minimum FX markup platforms: Avoid banks that quietly charge 2-3% in foreign exchange fees, and use platforms with transparent, upfront pricing. 

• Batch your invoices: Combine small payments into one monthly bill to slash per-transaction fees.

• Quote in client currency: Charge in your client’s currency, for example, USD or EUR and also add a 1 to 2% buffer for the FX conversions.

• File LUT early: Zero GST on exports guarantees full refunds on ITR when you’re earning below the threshold limit. So file yearly on the GST portal for compliance needs.

• Track live rates: Check the mid-market rates before invoicing and reject bad deals from high-markup providers.

Here are some pitfalls you can avoid to not lose your money or time on your international payments for freelancers and stay RBI compliant:

• Wrong purpose codes: Using incorrect RBI codes like P0001 instead of P0802 delays bank credits by weeks, so be cognizant and always match your service type correctly.

• Using a personal account: Banks flag and freeze savings accounts for business inflows, so you need to open a current account first.

• Ignoring FX makeup: When you are accepting bank rates without checking the FX markup, you might lose 2% to 3% per payment to the hidden charges.

• Skipping LUT filing: This means you have to pay 18% IGST on exports that eat your profits. Ensure that you file LUT on the GST portal annually.

• No FIRA documents for your transfers: Missing eFIRA, your proof of foreign payment, can block your ITR filing and GST refunds, so ensure you choose platforms that can automate this compliance need.

Indian freelancers can unlock global earnings by picking smart international payment methods like Xflow, which cuts fees and speeds up settlements. Remember to file LUT annually, use the right purpose codes, and avoid markup traps to meet your compliance needs and keep your profits high. 

For easy international payments for freelancers, visit Xflow’s site today!