Ask an Indian exporter what cross-border payments cost them, and you will usually hear a number: the forex margin, the bank’s wire fee. It is the obvious answer because it is the one printed on the statement. The costs that hurt more rarely appear there.
India has built one of the world’s most advanced domestic payment systems. Moving money across a border, however, still means dealing with different currencies, payment methods, regulators and banking systems, often all at once. That complexity shapes how much revenue a business actually earns.
A failed payment costs more than a fee
A fee is predictable. A failure is not. When an international payment fails, someone has to chase the customer, work out what went wrong and find another way to get paid. Revenue recognition slips, cash-flow plans get redrawn, and an overseas vendor waits longer than agreed.
The problem runs both ways. Historically, fewer than 70% of international card transactions in India have succeeded, and recurring payments face further hurdles around local mandates and data requirements. For a global business selling into India, that is not a technical statistic. It is customers who wanted to buy and could not.
Hidden fees and markups
The fee on the statement is rarely the whole cost. A margin over the mid-market rate can sit inside the exchange rate itself, where it never appears as a separate line, and intermediary banks may deduct more along the way, so the amount that lands is lower than the amount sent.
Even a one per cent gap between the rate applied and the reference rate is easy to miss on one invoice. Across a year of receivables, it is real margin. The test for any payment route is simple: can the business see the rate applied, the reference rate and every fee deducted?
Little visibility into currency movements
Exporters invoice in dollars or euros and are paid in rupees, so the rate between invoice and settlement decides what they earn. Yet many smaller businesses choose when to convert on instinct, or at whatever rate their bank quotes that day, with little data on how the currency has been moving.
When the rate, the conversion charges and the final amount are hard to predict, margins are hard to protect. Timely rate data and plain-language analysis of what movements mean for margins let a business decide when to convert or reprice with evidence, much as a large company’s treasury team already does.
No visibility into where a transfer is
A typical bank transfer is hard to follow once it leaves the sender. It may pass through intermediary banks, and neither side can usually see where it is or when it will land. Delays often come from small things: mismatched beneficiary details, a missing purpose code, a compliance query at an intermediary. The only recourse is to raise a query with the bank and wait.
Most finance teams would trade a little speed for certainty. What they need is visibility: where a payment is, when it will settle, and who is responsible for fixing it if something goes wrong. Without that, teams spend their days tracking individual transactions instead of planning, and matching receipts to invoices becomes slow and manual.
Software subscriptions: a smaller version of the same problem
Indian businesses also pay across borders every time they renew the global software they run on. Industry estimates suggest more than 30% of card-based recurring payments tend to fail in India, partly because cross-border recurring charges on domestic cards run into card and recurring-payment restrictions. A renewal can mean another decline, an employee fronting the cost on a personal card, or a separate remittance for each vendor. Approvals get stuck on OTPs, and the final amount rarely matches expectations once forex charges kick in.
As tools multiply, subscriptions spread across cards, employees, currencies and renewal dates, and a declined auto-renewal can interrupt a service the business depends on. Seeing all software payments in one place lets finance teams manage the spend as a single portfolio, with a clear view of who pays for what and when each tool renews. The more dependable approaches take these payments off individual cards, funding them through an ordinary bank transfer and paying vendors from a dedicated virtual card or central account.
Local habits and compliance are part of the product
UPI now accounts for roughly 85% of India’s digital payment volumes. For global businesses, offering UPI and net banking is no longer a nice extra at checkout. It is part of entering the market at all.
Compliance matters equally. KYC, anti-money laundering checks and merchant due diligence exist for good reasons and should not be diluted. But for a smaller business without a compliance team, documentation and verification can turn a simple transaction into a lengthy process. The aim should be clearer, more predictable checks, not fewer. India’s Payment Aggregator–Cross Border (PA-CB) framework, with its defined due diligence on overseas merchants, is a step in this direction.
What needs to change
Cross-border is now a two-way street, with Indian businesses selling abroad and overseas companies serving India, so systems must handle inward and outward flows under the same standards of transparency and compliance. Over the next three to five years, competing on transaction charges alone will not move the industry forward. The harder work is improving success rates, showing the full cost of every transfer, giving businesses data to act on currency movements, making transfers trackable end to end, making local payment methods accessible, simplifying compliance without weakening it, and making recurring software payments dependable.
Also Read: Weak signal, good customer: Why India needs better video KYC
If that happens, the benefits are practical: steadier cash flow, lower overhead and fewer surprises when serving customers abroad. A business should go global because of the strength of its product, not be held back by the difficulty of moving money.
Views expressed by: Ashwin Bhatnagar, Co-founder & CEO, Xflow
