Working with clients abroad? Great. But how you get paid can cost you more than you think.&nbsp;

There are ample payment gateways to choose from, but we know how busy your schedule is. To save time and give you a detailed overview of popular payment gateways, we have put together this comparison guide.&nbsp;

We have picked the 6 best payment gateways for freelancers in India, highlighted their pros and cons, and at the end, introduced a smarter alternative to receive direct wire transfers. 

What to Look for in a Payment Gateway as a Freelancer

The best way to know which payment gateway works for you is to make a list of must-have features and evaluate different platforms based on them. Here’s a readymade list to help you get started:

A payment platform might advertise low fees on its website homepage, but read the fine print. Does it charge a markup on the exchange rate? Are there intermediary bank charges? Give more weight to a platform that is transparent about these charges.

Ask your clients about their preferred payment method. If they prefer cards, then prioritise payment gateways that support card payments.

Quick payments allow you to have cash on hand to manage business expenses or investments, plan your bills, taxes, and savings. With longer settlement time, all of this is hampered, and so could be the exchange rate.&nbsp;

A <a href="https://www.skydo.com/blog/automated-firc-simplifying-international-payments-compliance">Foreign Inward Remittance Advice (FIRA)</a> is an important document for tax filing. It proves you have received a foreign payment in India. Check if the payment gateway automatically provides FIRA for free, so you don’t have to chase anyone to obtain it.

Ease of use—no dev work, no complex forms

When you’re always chasing client deadlines, you don’t want to settle for a complicated tool. The best way to find out how simple the tool is to use is by setting it up and using it firsthand. Run a few operations, like adding a client, bank information, and payment tracking. Take it to the next level by evaluating advanced features, like mobile access and automated invoicing. If the platform demands you to fill out complex forms or hire developers to set up a mobile integration, then it might not be the best choice for you.

Best International Payment Gateways for Indian Freelancers

In this section, we’ll cover the top international payment gateways Indian freelancers can use to receive payments,&nbsp; along with a smarter, more affordable alternative you may not have considered

PayPal: Trusted but Costlier Payment Gateways for Indian Freelancers

PayPal is the first on the list of 6 popular payment gateways you can consider. You’ve probably had at least one international client ask to pay you through PayPal, and that’s no surprise. PayPal remains the world’s leading digital payment platform, holding a <a href="https://www.chargeflow.io/blog/paypal-statistics-facts">45%</a> share of the global online payment market in 2025.

With PayPal’s availability in 200+ countries and support for 25 currencies, you have access to a truly global client pool. If you want to attract clients from the US, Germany, the UK, or even lesser-connected regions, PayPal’s trusted reputation means your clients can pay you quickly.&nbsp;

Payment links are simply personalised URLs that you can share with your clients over email or chat. Pay Now buttons are added to the website or invoice to help your client complete the payment.&nbsp; These techniques are effective because they make it easy for your clients to pay you even when they are busy or are unfamiliar with PayPal.

PayPal supports all major cards, including Visa, Mastercard, American Express, and Discover. Your clients can use their card even without a PayPal account, and you will still get your money. Offering this flexibility is critical when you’re working with businesses that might have their own company payment policies or preferred payment methods.

High transaction fee + currency conversion fees (~4.4% + markup)

PayPal takes out a sizeable chunk of your earnings. Standard transaction fees for cross-border payments are around 4.4%. PayPal also adds a currency conversion markup, which can be as much as 4% above the prevailing exchange rate. There is also a fixed fee, which depends on the currency. For USD, it is $0.30.

While PayPal is well known globally, some of its features are restricted for Indian users. For example, you can’t keep your PayPal balance in India and must withdraw funds to your local bank account. You also don’t get access to PayPal debit cards. These restrictions may mean missed opportunities to handle your funds more flexibly.

Payoneer: Freelancer-Friendly Gateway with Global Marketplace Support

Payoneer might be a great fit if you work with platforms like Upwork, Fiverr, or Amazon. With Payoneer, you can create virtual account details in the US, UK, and EU, and track all the payments in a single dashboard.

Supports multiple currencies (USD, EUR, GBP)

Payoneer supports 70+ currencies. You have the flexibility to accept payments in major currencies like USD, EUR, GBP, CAD, and more. As Payoneer provides virtual accounts, your clients can use domestic payment methods to pay you. The advantage is that you save on international fees and get quicker settlement.&nbsp;

Easy withdrawal to Indian bank accounts

The process of withdrawing your money from Payoneer to your bank account is straightforward. Payoneer handles the currency conversion after receiving the payment and sends the money directly to your local bank, usually within three business days. This ease of withdrawal means you don’t have to stress about liquidity or getting stuck in a lengthy remittance process.

Payoneer’s integration with multiple marketplaces lets you channel all your payments to one centralised account. This is a huge win because you don’t need to handle separate payout systems. Payoneer’s advanced features also allow you to request payments from your clients and track your incoming payments.

Payoneer’s fee structure could be overwhelming, especially if you’re new to international payments. You pay up to 3.2% for payments received via credit card, and while getting paid from another Payoneer user is free, the charges for marketplace payouts or direct bank transfers vary by platform. There’s also an annual inactivity fee ($29.95) if your account isn’t used for 12 months.

Every time Payoneer converts currency to INR for you, they add a forex markup of upto 3% above the mid-market rate. This means if the current mid-market rate of USD to INR is Rs. 85, then Payoneer will offer an effective exchange rate of Rs. 82.45. For a $1000 payment, you lose Rs 2,550 due to forex markup.

Stripe: Advanced Tools, But a Complex Payment Gateway for Freelancers

Stripe is a developer-friendly payment gateway that supports over 135 currencies and operates in 195 countries. It’s widely used by SaaS companies and tech startups for its powerful APIs and automation features. While freelancers can use Stripe to receive international payments—especially for recurring or subscription-based services, it’s better suited for those with technical know-how or productized offerings.

A complicated checkout experience often leads to abandoned payments and lost revenue. Stripe helps you to avoid this by letting you build a clean, professional checkout that looks great on any device. You can embed Stripe’s pre-built payment form on your website. Or, you can redirect your clients to a Stripe-hosted payment page, which you can customise using your logo and brand colours.&nbsp;

With Stripe, you can accept payments from virtually any major credit or debit card worldwide: Visa, Mastercard, American Express, Discover, JCB, Diners, China UnionPay, and more. This is great news if your clients prefer paying via a card.

Subscription and recurring payment support

Stripe’s advanced subscription tools let you set up automated billing for recurring services. For example, if you provide a monthly website maintenance package, Stripe can automatically bill your client every month. You don’t have to spend time sending payment reminders to your clients anymore.&nbsp; It also becomes easy to handle upgrades, downgrades, and plan changes with minimal friction.

Stripe works on an invite-only model in India. This means you cannot sign up directly; you have to request access first, and only if it’s approved, can you use Stripe. Right now, Stripe is accepting applications from businesses focused on international expansion. If you’re a gig worker or a small agency, your chances of getting that approval are quite slim.&nbsp;

Stripe charges a 4.3% processing fee for foreign currency transactions. There is also a currency conversion fee of 2%. That means you will lose 6.3% to fees for every foreign payment you get through Stripe. For a $10,000 payment, that’s $630 reduced to fees

Stripe does not issue FIRA. It offers a payment advice which you then need to take to the bank to get your FIRA. This is a pain point because you’ll have to rely on your receiving bank to generate the FIRA instead. The bank process for getting FIRA is often manual and time-consuming, so you may end up chasing a lot of paperwork.

Cashfree: India-Based Payment Gateway for Freelancers and Startups

Cashfree is an Indian payment gateway designed to help Indian businesses, especially startups and small service providers, accept both domestic and international payments. If you’re a freelancer who works with global as well as Indian clients, Cashfree can be a practical option. It offers developer-friendly APIs, easy integrations, and flexible settlement options.

Accepts International Card Payments

Cashfree supports all major global card networks, including Visa, Mastercard, American Express, and Maestro. This makes it easy for international clients to pay using their preferred cards. However, international transaction fees vary depending on the card network and can include currency conversion charges.

You can receive payments in Indian Rupees (INR) and over 30 major foreign currencies like USD, EUR, and GBP. Managing both domestic and international clients through a single dashboard helps simplify accounting and reduces the need for multiple platforms.

Easy Integrations (No Coding Needed)

Cashfree integrates easily with popular platforms like Shopify, WooCommerce, Wix, and even WhatsApp. Freelancers running online stores or showcasing portfolios on websites can start accepting payments without needing technical expertise.

For international card payments, Cashfree charges a base fee of 2.95%–2.99% depending on the card type. Additional forex conversion fees may apply, making it costlier compared to some other alternatives for freelancers receiving large international transfers.

Documentation and Approval Required
To enable international payments,

Cashfree may require document verification such as PAN, bank details, and sometimes GST registration—especially for certain payment methods or business types. Approval can take a few working days.

PayU: Enterprise-Grade Payment Gateway, But Freelancer-Friendly Too

PayU is a global payment gateway with strong roots in India, supporting over 4.5 lakh merchants. While it's known for serving large e-commerce companies, its user-friendly interface and flexible features also make it a viable option for freelancers looking to accept international payments.


PayU allows you to accept payments via a wide range of options, including UPI, net banking, credit and debit cards (Visa, Mastercard, American Express, RuPay, Maestro, Diners), wallets, EMI, and Buy Now Pay Later (BNPL). For international clients, this flexibility helps reduce payment friction by offering convenient methods.

Recurring Billing &amp; Easy Payment Links


If you offer subscription-based services or receive monthly retainers, PayU supports automated recurring billing with reminders. You can also send payment links directly to clients via email, WhatsApp, or social media—ideal for freelancers without a full website.

Works for Both Indian and International Clients

PayU supports multi-currency processing and settlement, enabling freelancers to cater to both domestic and international clients through a single platform.

Freelancers typically face a 3%+ fee for receiving international card payments. The pricing model is tiered, and better rates are often reserved for enterprise accounts with higher transaction volumes.

Complicated Onboarding for International Payments

To enable international payments, PayU may require extensive documentation like a PAN, GST certificate, website or portfolio, and in some cases, audited financials or an import-export code (IEC). This can be a blocker for early-stage freelancers.

PayU doesn’t generate Foreign Inward Remittance Advice (FIRA). You’ll need to depend on your bank to obtain these documents for compliance, something service exporters must track manually.

Skydo: A Smarter Alternative to Traditional Payment Gateways

Traditional payment gateways are convenient, but they come at a cost. The forex fees are on the higher side, and some of them do not provide an FIRA. So if your international clients prefer paying via wire transfers instead of cards, Skydo might be a better fit. It’s a modern payment solution designed for freelancers who invoice clients directly and want seamless, fast cross-border payments with a stress-free compliance process.

With Skydo, you always get live exchange rates with no hidden forex markup. This means you will always know how much money you will receive in your bank account.

Skydo generates your Foreign Inward Remittance Advice (FIRA) instantly and for free as soon as you receive payment. There’s no need to chase your bank for it.

Skydo provides access to major currencies, like USD, EUR, and GBP, through virtual accounts. They are like digital addresses linked to your Indian bank account. You can create a virtual account in key countries, like the US, UK, and Australia, without actually going there. The advantage is that your clients can pay you with a simple local bank transfer. You don’t have to bear the SWIFT fees and the delays that are associated with wire transfers.

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If you’ve ever received an international wire transfer and noticed the amount was less than expected, an intermediary bank was likely involved.

But what is an intermediary bank, and why does it take a cut from your payment?

Intermediary Bank Meaning (Simple Explanation)

An intermediary bank is a third-party bank that helps route international payments when the sender’s and receiver’s banks don’t have a direct relationship.

For example,
if a client in the US pays you in USD, and your Indian bank doesn’t have a direct relationship with the US bank, the payment travels through one or more intermediary banks before reaching your account.

These banks work behind the scenes, which means you don’t usually know when they’re involved. But they can silently eat into your earnings by deducting hidden charges during the transfer.

Intermediary banks are used when international transfers are made through the SWIFT network, especially in the following situations:

If your Indian bank doesn’t maintain a <a href="https://www.skydo.com/blog/nostro-account-international-transactions">Nostro account</a> (foreign currency account) with the sender’s bank, intermediary banks are used to bridge the gap.

Many Indian banks don’t have a direct <a href="https://www.skydo.com/blog/how-to-receive-money-from-usa-to-india">USD clearing arrangemen</a>t. The payment is routed through intermediary banks that can handle USD transactions.

If your client is paying in a currency their bank doesn’t directly support (like Swiss Franc to INR), the bank uses an intermediary to settle the payment.

Intermediary Bank Charges: How They Eat Into Your Payments

Here’s the tricky part: intermediary bank fees are deducted silently.

💡 Example:
Your client sends $1,000.
After two intermediary banks take $14 each, you receive only $972, with no breakdown to show why.

Why It Matters for Freelancers and Exporters

Intermediary bank deductions may seem small, but they add up:

You can’t skip intermediary banks every time, but here’s how to reduce or eliminate the charges:

Intermediary Bank vs Beneficiary Bank: Quick Note

Your beneficiary bank is the one that receives the funds on your behalf.
An intermediary bank is just a middleman that helps route the funds, and quietly charges a fee along the way.

How Skydo Helps You Avoid Intermediary Bank Fees

Skydo offers a smarter, cleaner alternative to traditional SWIFT transfers.

✅ Virtual bank accounts in the US, UK, EU, Canada, and Singapore. &nbsp;These accounts are powered by Skydo’s partnerships with major global banks like Community Federal Savings Bank (US), Barclays (EU), DBS (Singapore), etc.

✅ No intermediary banks involved
 Payments are collected locally and credited to your Indian account,&nbsp; fast and fee-free.

✅ Transparent fee structure
 Flat fee, no hidden charges, no FX markup , conversion happens at the live mid-market rate.

✅ Fully compliant
 Skydo is authorised by the RBI under the Payment Aggregator Cross Border (PA-CB) framework and follows all required regulations.

Intermediary banks are often invisible, but they can cost you more than you think,&nbsp; in both money and time.

Skydo helps you bypass them entirely, giving you faster, cheaper, and transparent global payments.

👉 Ready to stop losing money to invisible fees?


<a>Sign up for a free demo with Skydo today.</a>

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A Vostro account is a bank account in Indian Rupees that an Indian bank holds for a foreign bank. It helps process international payments coming into India.

You don’t need to open or manage one yourself, but every time a client from abroad pays you, a Vostro account might be quietly working in the background. It affects how quickly you get paid, how much you lose in fees, and how easy it is to get compliance documents like FIRA or e-BRC.

In this blog, we’ll break it down simply, what a Vostro account is, how it works, and why it matters if you get paid from international clients.

“Vostro” is a Latin word, meaning “yours.”&nbsp;

In banking, a Vostro account is an account that a domestic bank in India maintains on behalf of a foreign bank, in Indian Rupees, to settle international payments. So it is essentially "your account" in "my bank". A Vostro account makes it possible for international clients to pay Indian freelancers, exporters, or businesses directly in INR.&nbsp;

Why Vostro Accounts Matter for Indian Exporters, Freelancers and MSMEs

Vostro accounts allow Indian banks to hold foreign payments on standby. Instead of going through multiple intermediate banks (which delays transfers), the funds move directly into your INR account, reducing settlement time and uncertainty.

Since Vostro transactions bypass some SWIFT intermediaries, there are fewer cuts taken out. That often means better effective exchange rates and lower fees compared to traditional SWIFT transfers.

Because the money arrives through official Vostro channels, your payment qualifies for RBI-compliant documents like FIRA and e-BRC, essential for taxes and export subsidy claims. No more manual follow-ups with the bank.

With Vostro infrastructure, you can get paid in foreign currencies like USD, GBP, EUR, even though you only hold an INR account in India. It’s the easiest way for Indian users to receive international payments.

How Does Skydo Leverage Vostro Accounts to Simplify International Payments?

You may not see it, but every time you get paid via Skydo, there’s a powerful Vostro-backed infrastructure working for you behind the scenes.

We’ve built our infrastructure on top of Vostro accounts held with globally trusted banks, like Barclays (UK/EU), Community Federal Savings Bank (US), and Digital Commerce Bank (Canada). These accounts let us receive international payments directly in local currencies and settle them to your Indian account seamlessly.

So, while most businesses and freelancers don’t ever see a Vostro account, at Skydo, it’s what keeps your payments fast, compliant, and frustration-free.

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Many apparel and textile exporters still lose profit margins due to embedded state and central taxes that aren't refunded through GST.&nbsp;

RoSCTL (Rebate of State and Central Taxes and Levies) replaced the earlier <a href="https://www.dgft.gov.in/CP/?opt=meis">MEIS scheme</a> for the textile sector, helping Indian exporters stay cost-competitive by refunding these hidden taxes.

The India scheme covers state and central levies not addressed under GST, providing relief that can be the difference between profit and loss for businesses with thin margins. While the application process requires proper documentation, the margin improvement makes it worthwhile.

This guide covers the RoSCTL scheme benefits, its eligibility, and how to claim it.

Who Is Eligible for the RoSCTL Scheme (2025 Guidelines)

Many apparel and textile exporters still lose out on margins due to embedded state and central taxes that aren't refunded through GST. RoSCTL replaced the earlier MEIS for the textile and garment sector, helping the Indian export sector stay cost-competitive in global markets.

The scheme is only available to exporters of Apparel (Chapter 61 &amp; 62 of <a href="https://www.dgft.gov.in/CP/?opt=itchs-import-export">ITC-HS codes</a>) and Made-ups (Chapter 63).&nbsp;

You're likely covered if you're exporting t-shirts, bed linen, scarves, or other fabric-based goods. The scheme refunds embedded indirect taxes like electricity duty, VAT on fuel, and central excise duty on raw materials that GST doesn't address.

RoSCTL provides duty credit scrips - digital certificates issued by DGFT website that function like tradeable vouchers for paying customs duties. These scripts can:

For many MSME exporters, these scrips can add up to 3 - 6% of the FOB value, significantly boosting net margins by refunding embedded state and central taxes.

The RoSCTL process is straightforward and entirely digital, flowing seamlessly from export declaration to credit availability. Understanding this workflow helps exporters maximise their benefits efficiently.

Here are the steps to successfully claim RoSCTL:&nbsp;

Step 1: Ensure IEC, GST, and ICEGATE registration. You need a valid IEC (Import Export Code) and GSTIN for GST compliance, and you must be registered on ICEGATE with at least one GSTIN attached to access export incentive schemes like RoSCTL.

Step 2: File export under chapters 61–63 with the correct RoSCTL declaration. Submit the shipping bill through ICEGATE, ensuring the HS codes (61, 62, 63) are correct. Declare RoSCTL in the shipping bill using specific scheme codes at the item level.

Step 3: Track RoSCTL scrip issuance in ICEGATE (under Rebate Mechanism). Once the EGM is filed and processed, a scroll with all individual Shipping Bills for the admissible amount will be generated and made available in your ICEGATE account under the E-Scrip Module.

Step 4: Download and use scrips via the customs portal or trade. The duty credit amount will be available within the ledger created for the IEC holder in their ICEGATE login to claim and convert into duty credit scrip, which can be used for paying Basic Customs Duty or transferred to other entities.

Step 5: Maintain a record for GST, refund, and income tax purposes. Exporters must maintain records of shipping bills and all export-related documents for three years from the date the scrip was issued for post-issue scrutiny and recovery purposes, and ensure proper GST compliance through GSTR-1 filing.

RoSCTL (an initiative by the government of India) rates are notified via <a href="https://www.dgft.gov.in/CP/">DGFT </a>and <a href="https://taxinformation.cbic.gov.in/view-pdf/1003137/ENG/Circulars">CBIC circulars</a>, varying by HS code and product. The Ministry of Textiles notifies rates under the scheme in four schedules. Schedules 1 and 2 specify the Central and State taxes and levies for apparel and made-ups, while Schedules 3 and 4 give the Central and State taxes applicable for apparel export products when fabric has been imported duty-free under the Special Advance Authorisation Scheme.

💡Pro tip: Match the HS code in your invoice and shipping bill exactly with the notified RoSCTL code for accurate credit calculation, as benefits are calculated based on declared export FOB value or up to 1.5 times the market price, whichever is less.

Understanding the differences between these export incentive schemes helps Indian textile exporters make the right choice and to achieve maximum benefits.

If you're exporting both garments and packaging (e.g., cotton bags), split your RoSCTL and RoDTEP claims accordingly, use RoSCTL for textile items under eligible chapters and RoDTEP for other products like packaging materials that fall outside the textile classification.

Even small errors can lead to significant delays or loss of benefits. Here are the most frequent mistakes exporters make when claiming RoSCTL:

Filing under wrong HS codes or chapters - Ensure your products are classified under the correct chapters 61, 62, or 63 of ITC-HS codes, as RoSCTL is only available for apparel and made-ups under these specific classifications. Hence, make sure to input accurate information&nbsp;

Forgetting to tick the RoSCTL declaration in shipping bills - You must make a specific declaration in the shipping bill using appropriate scheme codes at the item level, as the absence of proper scheme codes means the RoSCTL benefit would not be available

Not checking ICEGATE regularly for issued scrips - RoSCTL scrips are typically issued within 2-4 weeks after customs clearance, and you need to actively monitor your ICEGATE account under the E-Scrip Module to claim and convert credits into duty credit scrips

Assuming RoSCTL auto-applies, you must declare it during export filing. The scheme requires active declaration by the exporter in the shipping bill at the time of filing, as benefits are not automatically processed without proper claim submission and scheme code selection

💡Pro tip: Double-check your HS codes against the RoSCTL rate schedules before filing, and always verify that your RoSCTL declaration appears correctly in your shipping bill to avoid processing delays.

While RoSCTL helps reduce your export costs through tax rebates, managing international trade and payments efficiently is equally crucial for your export business success.

Skydo streamlines your export payment process with:

Why this matters for RoSCTL exporters: Since you need to maintain proper documentation of foreign exchange receipts for RoSCTL compliance, <a href="https://www.skydo.com/blog/automated-firc-simplifying-international-payments-compliance">Skydo's instant FIRA</a> and real-time tracking ensure you have all necessary records for scheme benefits and GST refunds.

Combine RoSCTL tax savings with Skydo's payment efficiency to maximise your export profitability. Through RoSCTL, you can save on embedded taxes while reducing FX costs and processing delays through smarter payment solutions.

<a href="https://www.skydo.com/">Explore Skydo!</a>

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Most Indian freelancers, exporters, and even startups have never heard of a Nostro account. Yet this behind-the-scenes banking mechanism quietly affects how fast you get paid from abroad, what fees get deducted, and how smooth your compliance documentation (like FIRA/eBRC) process is. 

In this article, we’ll break down in plain English what a Nostro account is, how it works, and why it matters when you’re receiving money from overseas.

What Is a Nostro Account? (Meaning in Banking)

A Nostro account is essentially a foreign currency bank account that one bank holds in another country’s bank. In other words, it’s “our account” held with your bank in your country’s currency.&nbsp;&nbsp;

For example, an Indian bank like HDFC might hold a USD account with Citibank in the U.S.; that USD account is HDFC’s Nostro account (from HDFC’s perspective). It allows HDFC to park and move funds in U.S. dollars abroad on behalf of its customers. From Citibank’s perspective, the same account is called a Vostro account (since it’s “your account” in their books)&nbsp;(We’ll focus on Nostro here; Vostro is basically the flip side, which we cover in another blog.)

In simple terms, a Nostro account lets banks handle foreign currency transactions without needing a physical presence in that foreign country. It’s how your Indian bank can send/receive dollars, euros, etc., even though you don’t hold those currencies yourself. The bank uses its Nostro accounts with correspondent banks abroad to do that.&nbsp;&nbsp;This is a common practice in international banking, forming the backbone of correspondent banking networks.

Only banks (and authorised financial institutions) can open Nostro accounts.&nbsp;Individuals or normal businesses cannot open one directly. In India, RBI-authorised banks (known as AD Category-I banks, e.g. SBI, HDFC, ICICI) maintain Nostro accounts in major foreign currencies to facilitate their customers’ international transactions. You, as a freelancer or company, do not need to open a Nostro account yourself; your bank handles that behind the scenes.

How Does a Nostro Account Work? (Step-by-Step Example)

Let’s illustrate how a Nostro account functions with a simple example:

Scenario: Ramesh is a freelance consultant in India, and his client John in the USA wants to pay him $1,000 for a project. Ramesh uses HDFC Bank in India to receive the payment.

Here’s what happens behind the scenes when John pays Ramesh $1,000:

Payment Initiation: John sends $1,000 from his U.S. bank (say, Citibank) to Ramesh’s account. This international payment (often via a SWIFT wire) is not sent directly to Ramesh’s INR account. Instead, it’s directed to HDFC Bank’s USD Nostro account in the USA (for example, HDFC’s Nostro with Citibank)

Funds Received in Nostro: The money lands in HDFC’s USD Nostro account at Citibank. Essentially, Citibank credits HDFC’s account on its books with $1,000 on behalf of Ramesh.&nbsp; HDFC now has an extra $1,000 in its U.S. account.

Confirmation &amp; Transfer to India: HDFC Bank gets confirmation of the credit in its Nostro account. It will then transfer the funds from the Nostro account to India (often through internal networks or the SWIFT system) to convert and credit Ramesh’s local account. (In practice, this may involve HDFC instructing Citibank to send the $1,000 to HDFC’s account in India or adjusting balances accordingly.)

Currency Conversion: Before crediting Ramesh, HDFC converts the USD 1,000 into Indian Rupees. They use the prevailing exchange rate on that day. For example, if the rate is ₹82 per USD, the $1,000 would convert to ₹82,000 (minus any applicable charges or FX margin the bank applies).

INR Credit to Ramesh: Finally, HDFC credits Ramesh’s local INR account with the converted amount (around ₹82,000 in this example). Ramesh sees the payment in rupees in his account statement. The original $1,000 never directly touched Ramesh’s hands – it was handled by HDFC’s Nostro account abroad and then exchanged to INR for him.

Throughout this process, Ramesh didn’t need to deal with foreign banks or hold a dollar account. HDFC’s Nostro account in the U.S. acted as the receiving bucket for the dollars and took care of conversion. This is how you receive foreign client payments seamlessly into your Indian bank account without any foreign currency account of your own.

Key points: The use of Nostro accounts means the payment often travels through the international banking network (e.g. via SWIFT) to the Indian bank’s correspondent account, then to your account. Every major Indian bank has such Nostro tie-ups to handle remittances from different countries/currencies.

Why Nostro Accounts Matter (Benefits for Freelancers, Exporters &amp; Businesses)

Even though you don’t manage the Nostro account yourself, it has important implications for your international payments. Here’s why Nostro accounts matter for anyone receiving money from abroad in India:

So, while you, as an exporter or freelancer, don’t manage Nostro accounts, knowing that your bank or payment platform uses reliable Nostro channels gives confidence. It means your money will likely arrive faster, with fewer deductions, and with proper RBI-compliant records – all without you having to do anything extra.

Skydo Tip: Get Paid Faster with Local Virtual Accounts (Nostro in the Background)

Modern fintech platforms are leveraging Nostro accounts to simplify international payments further. For instance, Skydo provides a solution where you get a local receiving account in your client’s country, but the heavy lifting is done via Skydo’s Nostro accounts. Let’s understand how this works with an example:

Example: Riya is a freelance designer in India. Her client, Matt, is in the US and owes her $1,000 for a project. Riya uses Skydo to receive the payment. Here’s what happens behind the scenes:

Skydo offers such virtual receiving accounts not just in USD but also in other major currencies like GBP, EUR, SGD, CAD, etc., backed by trusted global banking partners (e.g. Barclays in the UK/Europe, Digital Commerce Bank in Canada, DBS in Singapore, among others). This Nostro-backed system lets freelancers, SaaS businesses, and agencies get paid faster, avoid hidden forex markups, and stay fully compliant, without any back-and-forth with your bank for each payment.

Want to see how it works for you? You can create your free Skydo account in just 5 minutes and start receiving global payments with ease. 🚀

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Imagine you’re an international buyer,&nbsp; say, a U.S. company, and your Indian supplier has sent an invoice asking you to pay into a “Skydo Virtual Account” instead of a traditional Indian bank. It’s natural to wonder: Is this safe and legal? The short answer is yes. 

In fact, you’d be in good company: Amazon, Stanford University, Microsoft, and many others already use Skydo’s <a href="https://www.skydo.com/blog/virtual-account-numbers">virtual accounts</a> to pay their Indian vendors. Skydo’s virtual accounts are simply local bank accounts set up for each currency (USD, EUR, CAD, SGD, etc.) and are backed by real regulated banks. Paying into a Skydo account means you’re actually sending money to a major bank (in the U.S., Europe, Singapore, etc.), not into some anonymous wallet.

In practice, you wire dollars to a Community Federal Savings Bank (New York) account or send euros to a Barclays<a href="https://www.skydo.com/blog/iban-number-meaning-full-form">/IBAN account,</a> and Skydo’s system credits the Indian exporter and provides them with the required digital paperwork (<a href="https://www.skydo.com/blog/all-you-need-to-know-about-firc-a-complete-guide">the FIRA</a>) for RBI&nbsp; (India’s central bank, regulating the financial system) compliance. This process is faster, cheaper and more transparent than a traditional <a href="https://www.skydo.com/blog/swift-money-transfer-ultimate-guide">wire/swift transfer</a>,&nbsp; and it comes with industry-grade security.

How Virtual Accounts Work – Faster, Cheaper, Transparent

A “virtual account” in Skydo’s terms works like this: when your vendor signs up with Skydo, they instantly get bank accounts in 10+ countries (USD, EUR, CAD, GBP, AUD, SGD, etc.). From the payer’s perspective, you just wire money to a normal-looking bank account in your country or region.&nbsp;

Behind the scenes, Skydo’s platform collects that money, converts it at real-time mid-market rates with a minimal fee, and remits INR to the exporter’s Indian account. This avoids the usual multi-bank wire chain and opaque fees of traditional FX. For example, Skydo charges a flat USD $19 for payments up to $2,000, or $29 up to $10,000, with zero hidden markups.&nbsp; The exporter covers the fee, so you can pay the full invoice amount without worrying about extra charges or deductions.

Unlike international wire transfers to Indian bank accounts, payments to a Skydo virtual account are treated as local transfers. That means you skip SWIFT fees, avoid lengthy settlement timelines, and don’t have to deal with repeated follow-ups from your supplier. Funds typically clear within 24–48 hours.

One reviewer of Skydo noted that using it was “an amazing experience … completely hassle free” for international invoicing In short, paying to a Skydo virtual account means your money moves as if it were a local transfer (often clearing in 24 hours) while the exporter still gets the correct tax-compliant confirmation (FIRA) on their end.

Skydo runs on global financial rails, partnering with banks you already know and trust.

For example, <a href="https://www.bankingcircle.com/banking-circle-partners-with-skydo-to-accelerate-cross-border-collections-for-indian-businesses/">Banking Circle (a fully licensed next-generation bank with central bank access in Europe) has entered a strategic partnership with Skydo</a> to expand payment options for UK/EU and&nbsp; Australian clients.&nbsp;

In Asia, Skydo uses accounts at DBS Bank (Singapore). For USD payments, Skydo issues accounts via Community Federal Savings Bank (a New York bank). For Canada, it uses Digital Commerce Bank (a regulated Canadian bank), and for Europe/UK, it taps banks like Barclays and other IBAN providers.&nbsp;

Growing Global

Understanding Global Payments blogs