India is one of the centers of ecommerce today, with the ecommerce industry set to grow 84% by 2024, an online retail market that’s expected to reach $73 billion by 2022, and an overall retail market that’s currently the 4th largest in the world and is estimated to reach $1.5 trillion by 2030. By 2021, India’s IT services sector was valued at $99 billion, with a business process management (BPM) sector worth $38 billion. In short, India is home to entrepreneurs and hard-working remote employees, as well as an attractive market for cross-border businesses.
People who run a business in India want to be able to easily make and receive payments from around the world, whether those are from your suppliers, partners, or customers.
Of course, you need a local bank account to pay official costs and local tax obligations. But using a local bank account to process international payments can be extremely expensive, plus you won’t be able to track your SWIFT international wire transfers. Fortunately, today there are digital payment solutions that let you have the convenience of a local bank account without having to actually work with a bank.
Wise, formerly TransferWise, offers a multi-currency account that operates like a local bank account for 8 currencies. Many people, especially those in the UK, use Wise for payments to India because they appreciate the low transfer and conversion fees. But there are also serious disadvantages to using Wise, and it’s simply not an option for business owners in India who need to be able to make B2B cross-border payments.
Here are some of the pros and cons of using Wise for payments to and from India, and some alternatives to Wise for India.
Many people who run cross-border businesses enjoy the Wise multi-currency account, which offers local accounts details in multiple regions, together with integrations with easy-to-use bookkeeping software like Xero and QuickBooks.
Unfortunately, the Wise multi-currency business account in not available in India. Of course, you can still send and receive payments through your personal Wise account, but you can’t use that for business payments, to get local account details in the US, UK, Europe and more, or to access the Xero and QuickBooks integrations. Payments to your Wise personal account will not meet international GST tax regulations
Wise clients in Europe or Asia could use Wise to send payments to your local business bank account in India, but that might mean that you may to pay high conversion fees to accept the payment.
Payoneer’s payment platform offers an online bank account for you to easily receive payments in India without paying high currency conversion fees. It was designed for business use, making B2B cross-border payments smoother and simpler.
You can receive payments in a number of currencies, including in USD, GBP, EUR, CAD, SGD, and AUD, and then convert your funds into Rupees at a competitive exchange rate and for low fees before withdrawing them to your bank account.
There are multiple ways to get paid in India using Payoneer, including through ACH bank transfers, credit or debit card payments, local bank transfers and from other Payoneer users.
Payoneer also gives you a local receiving account that behaves just like a local bank account in numerous countries like the US, Europe, Hong Kong, and Singapore, so you can accept payments in many different currencies, just as though you had a local bank account there.
Finally, consult the Payoneer dashboard to keep track of payments and quickly prepare reports for bookkeeping and tax needs. Payoneer provides a digital FIRC for free, to ease compliance with local financial regulations.
PayPal is one of the best-known payment platforms, so you’re probably already familiar with it. PayPal supports payments between hundreds of countries, and it permits both personal and business payments. PayPal levies GST to help make sure you’re compliant with those requirements.
To make or accept a payment through PayPal, you’ll need to either use a credit card, or link a bank account. You can only link a bank account or credit cards in one currency, so it’s not possible to connect an account in Indian Rupees and also in GBP or USD, for example. Once you’ve linked your payment option, you can make and receive payments in dozens of currencies, including Rupees.
PayPal is popular for domestic transactions, but it charges high fees for currency conversion and international payments. You can expect to pay 4.4% on transfer fees and 3% on conversion fees. You’ll also have to pay a fee to get a FIRC for your Indian payments, and it’s only available in hard copy rather than digital.
World Remit shares Wise’s commitment to transparency, with a clear fee structure and easy to follow exchange rates. Unlike Wise, it supports payments both for businesses and for individuals making personal transactions, and you can choose between bank transfer, mobile wallet transfer, and cash pick-up for payments to India.
However, World Remit has a low transaction limit, so many businesses might find that their payments are too big to be approved, and it doesn’t provide a free FIRC. Although it makes it easy and low-cost to send and receive cross-border B2B payments, it doesn’t serve to replace a “real” bank account.
Payoneer makes it easy to make cross-border payments to India
Although Wise is a good choice for some situations, business owners who want to make cross-border payments to India are likely to prefer Payoneer. With free digital FIRC, local customer support and account management for large Indian companies, free in-network payments, and support for a range of payment methods, a Payoneer account lets you enjoy the benefits of a local bank account without the hassle.