Ashwin Bhatnagar, CEO and co-founder of Xflow, a fintech company, said the difference between an invoice value and the amount ultimately credited cannot always be attributed to movements in the exchange rate.
Where does the money go?
In a traditional SWIFT transfer, a payment can pass through multiple correspondent banks before reaching the beneficiary’s bank. Each intermediary may levy a charge, which can reduce the amount received.
Bhatnagar said a typical SWIFT transfer can pass through two or three correspondent banks, with each potentially deducting its own fee. This can leave exporters with limited visibility into where deductions were made.
The payment chain can also affect how long the money takes to arrive.
Movin Jain, co-founder of cross-border payments platform Skydo, an Indian fintech startup, said that in the legacy SWIFT flow, multiple intermediary banks may carry out their own compliance reviews, work on different timelines and reconcile transactions independently.
Banking cut-off times, time-zone differences, additional verification and local holidays can further affect settlement timelines.
The exchange rate is not the whole cost
Charges can also come from the payment provider. Depending on the service, businesses may face platform fees, GST, documentation-related charges such as FIRA or FIRC costs, and an FX mark-up embedded in the exchange rate.
These costs may not necessarily appear as a separate deduction. Instead, they can be reflected in the final amount credited to the recipient.
Bhatnagar said such charges can collectively reduce the amount received by 1–4% of the invoice value in some cases, even when the underlying exchange rate has barely moved.
This means comparing only the advertised exchange rate may not give businesses the full picture of the cost of receiving an overseas payment.
What should exporters look at?
Businesses receiving international payments need to consider the total amount that will be credited, rather than just the quoted exchange rate.
This includes the platform or transfer fee, FX mark-up, any documentation-related charges and the expected settlement time.
The payment route also matters. Traditional international transfers can involve several intermediaries, while newer digital payment models seek to reduce the number of entities involved and provide greater visibility into the transaction.
Bhatnagar said exporters and freelancers should check all applicable charges before initiating a transaction and consider the expected credit timeline as well.
For businesses that receive international payments regularly, even a small difference in FX margins or fees can add up over time. The cost of cross-border payments, therefore, is not just about the exchange rate. It is also about what gets deducted along the way and how quickly the money reaches the recipient.
