Cross-border payments · business to business
Money crosses the border. Paperwork travels with it.
A business payment abroad is two journeys at once: the money moving through banks and currencies, and the documents that explain it to both countries. This guide follows both, for paying suppliers abroad and for getting paid by clients overseas.
Outward
Paying abroad
Imported goods and services, software subscriptions, fees to overseas partners, payments to group companies.
Inward
Getting paid from abroad
Export of goods and services, fees from overseas clients, funds from group companies.
Two journeys, side by side
Following one outward payment: what happens to the money, and what happens on paper at each step.
Paying a supplier in the US from India
IllustrativeMoney
- Your account in IndiaDebited in rupees₹8,40,000
- Your bankConverts at its quoted rate→ USD 10,000
- Correspondent bankCarries it abroadcharges may apply
- Supplier's bankCredits the supplierUSD, less any charges
Documents
- InvoiceWhat you're paying forINV-US-5531
- Purpose of paymentThe reason, as a purpose codereported by your bank
- Your bank's formsApplication and declarationsas your bank requires
- ConfirmationPayment message and adviceyour record of payment
Why the money takes a route
Your bank and your supplier's bank usually don't hold accounts with each other. The payment travels through correspondent banks that do: banks holding accounts in the currency being sent, which pass the money along and send a payment message with it.
Every extra bank on the route can add time and a charge, and every one of them screens the payment. That's why the same amount to the same country can arrive faster, or in full, through one route than another, and why complete, consistent details matter more here than in domestic payments.
| Party | Does |
|---|---|
| You | Instruct the payment, provide documents |
| Your bank | Checks documents, converts currency, sends the payment message |
| Correspondent bank(s) | Carry the payment in the foreign currency |
| Beneficiary's bank | Credits the beneficiary |
| Beneficiary | Receives the funds, possibly less charges |
Purpose codes and documents
Every foreign exchange payment in or out of India needs a stated purpose. RBI publishes purpose codes that banks use to report foreign exchange transactions, with one list for receipts and one for payments, so the code for being paid for exported services is different from the code for paying for imported ones.
Your bank will also ask for documents that support the purpose: an invoice, a contract, and for outward payments, its own application form and declarations. Which documents are needed depends on the kind of payment and on your bank's requirements.
Paying abroad (outward)
- Invoice or contract from the beneficiary
- The purpose, so the bank can report the right payment code
- Your bank's application form and declarations
- Complete beneficiary details, matching the invoice
Getting paid from abroad (inward)
- Your invoice to the overseas client
- The purpose, so the bank can report the right receipt code
- Your account details, exactly as your bank specifies for foreign currency
- The bank's advice or certificate for the remittance, kept on file
What your business must provide, report and keep is set by India's foreign exchange rules and your bank; confirm with your bank and adviser.
Exchange rates and charges
The rate you get is the bank's or provider's quoted rate, not the rate in the news. The difference, the spread, is part of the cost of the payment even though it never appears as a fee. Compare quotes on the amount the beneficiary will receive, not on the headline fee.
Charges are shared in one of three ways, chosen when the payment is sent. Get it wrong and your supplier receives less than the invoice and asks you for the difference.
| Option | Sender pays | Beneficiary receives |
|---|---|---|
| All charges on the sender | Their bank's and, usually, the other banks' charges | The full amount, in most cases |
| Shared | Their own bank's charges | The amount less the other banks' charges |
| All charges on the beneficiary | Nothing extra | The amount less all charges |
Commonly used options; names and availability differ by bank.
A worked example
Invoice for USD 10,000
Illustrative- Quoted rate
- ₹84.00 per USD (made up)
- You're debited
- ₹8,40,000 plus your bank's charges
- Charge option
- Shared
- Other banks' charges
- Deducted on the way, amount set by those banks
- Supplier receives
- USD 10,000 less those charges
Beneficiary details that prevent returns
Most returned international payments trace back to the beneficiary details: a name that doesn't match the account, a missing bank code, an account number in the wrong format for that country. Each bank on the route checks the details against its own rules, and any of them can send the payment back.
Take the details from the supplier's invoice or a signed letter, not from an email, and check them against what the country's banks expect. A bank-detail change for an overseas supplier deserves the same call-back check as a domestic one, and more, because recovering money sent abroad is harder.
- Beneficiary name
- Exactly as the account is held
- Account number
- In the format that country uses
- Bank identifier
- The bank's international identifier code, and a local code where the country uses one
- Bank name and address
- As the bank gives it
- Intermediary bank
- Only if the beneficiary's bank asks for one
- Payment reference
- Your invoice number, so they can apply the payment
For exporters: setting up to be paid
Getting paid from abroad starts with the details you send your client. Give them your bank's instructions for receiving foreign currency exactly as the bank provides them, and ask them to quote your invoice number in the payment. A payment that arrives with a clear reference is recorded against the right invoice and purpose without a follow-up call.
Agree the charge option in your contract. If you invoice USD 10,000 and the payment arrives short because the client chose to pass on charges, the difference is a negotiation you'd rather have had before the work. And keep the bank's advice or certificate for every remittance with the invoice it paid; it's the record your accountant and any export benefit will depend on.
Currency moves while you wait
Between signing a contract and settling the invoice, the exchange rate moves. For an importer paying in dollars, a weaker rupee makes the same invoice more expensive; for an exporter, it makes the same receipt worth more. Neither is under your control, but how exposed you are is.
Common ways businesses manage it are simple: invoicing in rupees where the other side accepts it, agreeing payment dates so exposure is short, and asking your bank about the tools it offers for fixing a rate in advance. Which of these suits you is a finance decision, and this page doesn't advise on it.
| Invoice currency | Importer in India | Exporter in India |
|---|---|---|
| Rupees | No currency risk | No currency risk; the overseas buyer carries it |
| Foreign currency | Carries the risk until payment | Carries the risk until receipt and conversion |
What decides how long it takes
Unlike domestic rails, there's no single clock for a cross-border payment. Time is added at each step, and most delays come from the paperwork rather than the money.
Documents. Missing or inconsistent documents stop a payment at your bank before it leaves.
Cut-offs and time zones. Banks in different countries process on different days and hours.
The route. Each correspondent bank on the way takes its own time.
Screening. Any bank can hold a payment to check it; complete details make this rarer and shorter.
When a payment doesn't arrive
| What happened | Usually | Do |
|---|---|---|
| Held at your bank | Documents missing or don't match the payment | Provide what the bank asks for; the payment continues |
| Held on the route | A screening question from an intermediary bank | Answer through your bank with the documents |
| Returned | Wrong or incomplete beneficiary details | Correct the details; the returned amount may be less after charges and conversion |
| Arrived short | Charges deducted on the way | Check the charge option; agree who pays for the difference |
| Arrived, supplier can't see it | Credited but not yet applied, or sent to another account | Share the payment message reference for them to trace |
Money that comes back may be converted to rupees at a different rate from the one it was sent at, and charges may have been taken on the way.
Reconciling cross-border payments
Three numbers rarely match exactly: the invoice in foreign currency, the rupees that left or arrived, and the amount after charges. Reconcile each payment against all three, and record the rate used and the charges, so exchange differences can be accounted for properly.
Keep the bank's advice or certificate with each payment; it's the record that the payment was made or received for the stated purpose.
- Invoice
- USD 10,000
- Rate applied
- As quoted on the day
- Rupees debited
- ₹8,40,000 + charges
- Charges
- Yours, and others' if known
- Reference
- Payment message reference
- Record
- Bank advice or certificate
The rules to check before you start
Money moving in and out of India is governed by the country's foreign exchange rules, administered through authorised banks. What you may pay for, what you must document and report, and any limits that apply depend on the kind of transaction and on who you are. This page explains how payments move; it isn't advice on those rules. Confirm them with your bank and your adviser before your first payment.
Group companies, subscriptions and other recurring payments
Not every cross-border payment is a one-off invoice. Businesses pay overseas software subscriptions every month, settle service charges with group companies every quarter, and receive retainers from overseas clients on a schedule. Recurring doesn't mean routine to your bank: each payment still needs its purpose and its documents.
Make the recurring ones easy to evidence: keep the underlying agreement on file with the bank where it asks for it, use the same invoice format and reference style each time, and reconcile each period separately. Payments between group companies deserve extra care, because their pricing and documentation are often looked at more closely.
| Payment | Keep on file | Watch for |
|---|---|---|
| Overseas software subscription | The subscription terms and each invoice | Card charges versus bank transfers; exchange on each charge |
| Group service charges | The intercompany agreement and each invoice | Documentation and pricing questions |
| Retainer from an overseas client | The contract and your invoices | Short receipts when charges are passed on |
Your bank, or a provider?
Cross-border payments always run through authorised banks, but you don't always have to instruct them yourself at a branch or portal. Providers connected to banks can collect the details and documents in one flow, quote the rate before you commit, and track the payment for you. What changes is the experience and the pricing; the rules and the route stay the same.
Compare on four things: the amount the beneficiary actually receives, how the rate is quoted and for how long it holds, what documents are needed and how they're collected, and who you call when a payment is held. Which of these Peneu offers, and for which corridors, is confirmed during onboarding.
Bank transfer, or international payment gateway?
| Cross-border bank transfer | International payment gateway | |
|---|---|---|
| Best for | Business-to-business payments, larger amounts | Many customers abroad paying by card |
| Who initiates | The payer's bank, on the payer's instruction | The customer, at your checkout |
| Documents | Invoice, purpose, bank forms | Order records; provider may ask for more |
| Read more | This guide | International payment gateway |
Who pays and gets paid across borders
Exporters
Receiving from overseas buyers; keeping the records for each inward remittance.
Importers
Paying overseas suppliers against invoices.
IT and services firms
Invoicing overseas clients in foreign currency.
Marketplaces with overseas sellers
Paying sellers in other countries.
The overseas version of the bank-detail scam
Payments to overseas suppliers are a favourite target for invoice fraud: an email, apparently from the supplier, says their bank has changed, often to an account in a third country. Money sent abroad is harder and slower to recover than a domestic transfer, so the checks have to happen before sending.
- Confirm any change of bank details by calling the supplier on a number you already had, never one from the email.
- Be suspicious of a beneficiary bank in a country that has nothing to do with the supplier.
- Have a second person approve the first payment to any new overseas account.
- Keep the beneficiary details from the original contract or invoice, and compare. The domestic version of this check is in the vendor payments guide.
Before your first overseas payment
The first payment to a new overseas supplier is where most problems happen: missing documents, a beneficiary detail in the wrong format, charges nobody agreed, a rate that moved. A short checklist, done once per supplier, saves most of them.
- 01The invoice or contract states the currency, amount and who pays which charges.
- 02Beneficiary details come from the invoice or a signed letter, and match the supplier's name.
- 03You know the purpose of the payment, so your bank can apply the right purpose code.
- 04You've asked your bank which documents and forms it needs for this kind of payment.
- 05You've compared the rate and charges on the amount the supplier will receive.
- 06A second person approves the first payment to this supplier.
Cross-border payment questions
Is the exchange rate fixed when I instruct the payment?
It depends on the bank or provider: some quote a rate that holds for a short time, others apply the rate when the conversion happens. Ask which applies before you commit, especially for large amounts.
Can I track an international payment after it's sent?
Your bank can usually tell you when the payment left and give you the payment message reference. Share that reference with the beneficiary so their bank can trace the incoming credit if it doesn't appear.
Why does my bank ask about the purpose if the invoice already says it?
Because the bank has to report each foreign exchange transaction under a specific purpose code and keep evidence for it. The invoice is the evidence; the purpose you state tells the bank which code applies.
How does a cross-border business payment work?
Your bank debits your account in rupees, converts the amount to the foreign currency at its quoted rate, and sends it, usually through one or more correspondent banks, to the beneficiary's bank abroad, which credits the beneficiary. Documents explaining the payment travel with it and stay on record.
What is a purpose code?
A code that states why foreign exchange is being received or paid, such as payment for imported services. RBI publishes the purpose codes banks use to report foreign exchange transactions, with separate codes for receipts and payments. Your bank will ask for the right one.
Why did the supplier receive less than I sent?
Usually because of charges deducted along the way by intermediary or receiving banks, or because of how the charges were set to be shared. Agree upfront who pays which charges, and choose the charge option on the payment accordingly.
How long does an international transfer take?
It depends on the currency, the banks involved and whether any document or compliance check holds it. Ask your bank or provider for the expected timeline for your corridor.
What documents do I need to receive a payment from abroad?
Typically an invoice or contract showing what the payment is for, so your bank can record the right purpose. Your bank then issues an advice or certificate for the inward remittance, which exporters keep for their records and for any export benefits.
Is a cross-border payment the same as an international payment gateway?
No. A payment gateway collects card payments from customers abroad, usually small and many. Cross-border bank transfers suit larger business-to-business payments: paying suppliers, receiving from overseas clients, settling between group companies.
Which corridors and currencies does Peneu support?
Which corridors, currencies and partner banks are available is confirmed during onboarding. None are named here.
Plan your cross-border payments
Tell us your corridors, currencies and volumes. We'll walk through what fits.
Talk to PeneuOfficial sources
- RBI — Purpose codes for reporting foreign exchange transactions (receipts)Separate purpose-code lists for receipts and payments.
Last reviewed . Examples, amounts and screens marked illustrative are not Peneu figures.