How to Receive Money from Canada to India

If you plan to expand your freelancing or export business to Canada, you will probably wonder: How will my clients transfer money from Canada to India?

Deciding on how your Canada-based clients pay you is not an easy decision. There are multiple payment methods and each has a different fee structure and settlement duration. Most of your confusion will be cleared after you read this blog.  We have covered all the essential details about each payment method like fees, payment duration, and documentation. 

By the end of this blog, you will be much closer to choosing the right payment partner.

What Are the Ways to Receive Money from Canada to India?

Here are the most popular ways to receive money from your clients in Canada to India:

Banks

Banks use international wire transfers to send money from Canada to India

Payment Gateways

This method allows businesses to make payments through credit or debit cards. PayPal is a popular example of a payment gateway.

International Virtual Accounts

Platforms like Skydo, Wise, and Payoneer offer virtual accounts which are digital accounts linked to your physical bank account

Remittance Platforms

Wise P2P and Western Union fall into this category

How Long Does It Take to Receive Money from Canada to India?

The duration of receiving money from Canada depends on the payment method. Here’s a quick breakdown of each method:

Banks

It can take 1 to 7 days to receive money in India via bank transfer. For example, a SWIFT transfer takes 5 business days to complete. However, it can take longer if multiple intermediary banks are involved in the settlement process. 

Payment Gateways

If your client pays via PayPal, then the money appears in your PayPal account quickly, but it might take another 5 business days for PayPal to credit the amount to your bank account

International Virtual Accounts

Virtual account platforms are faster than bank transfers, but the duration of completing a cross-border payment depends on the platform. For example, Skydo settle payments within 24-48 hours

Remittance Platforms

These platforms take 1-5 business days to credit the amount in your bank account.

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What Are the Fees for Receiving Money from Canada to India?

Fee is a strong point for comparison when picking the right payment partner. High platform fees mean a large cut from the amount sent by your client. In addition to high fees, transparency is also an important factor. Here’s the fee breakdown to help you make the right choice:

Banks

Bank fee structure is complex because the fees depend on the receiving bank. However, the SWIFT fee mostly stays in the range of Rs. 500 to Rs. 1000.

Banks also do not provide a live exchange rate by charging a forex markup. For example, if the exchange rate of the Canadian Dollar (CAD) to the Indian Rupee (INR) is Rs. 60, the banks might offer Rs. 58 – a loss of Rs.2 for every dollar. In addition, banks charge a fee to issue FIRA which starts at Rs. 200. 

Payment Gateways

Payment gateways like PayPal charge 4.4% of the amount as a transaction fee and 0.30 CAD as a fixed fee. They also apply a markup rate of 3% to 4% on the current exchange rate. 

International Virtual Accounts

The fee for international virtual accounts depends on the platform you choose. While there are no SWIFT fees involved while receiving money via international virtual accounts, different platforms levy their respective fee Here we have illustrated the fees for popular platforms like Wise, Skydo, and Payoneer. 

Remittance Platforms

Remittance platforms like Western Union, charge fees in the range of CAD 5 to CAD 50 based on the service speed and payment method.

What Documents Are Needed to Receive P from Canada to India

Documentation in inward remittance is an important step, more so when you are receiving a payment from Canada and not just a personal transfer. 

Without proper knowledge about documentation, you cannot collect the payment. Here’s a list of documents to help you with the right documents

Identification Proof: Any government-issued document like an Aadhar card, Passport, Voter ID card or Driving license will fall into this category

Bank Account Details: Your payment might get delayed without the right banking account details. Always double-check your account details like account number, branch details, and IFSC before you share with your clients. 

Purpose Code: The Purpose Code defines the nature and purpose of the fund transfer. These codes are alphanumeric and are managed by the Reserve Bank of India (RBI) to regulate cross-border payments in and out of the country. For example, if you provide software consultancy to Canada-based clients, you must mention P0802 as the Purpose Code on your invoice. 

Foreign Inward Remittance Advice(FIRA): FIRA is a document issued by banks as proof that you have received payment in foreign currency in India. It’s useful for filing taxes and if you’re an exporter, it’s also useful to claim tax deductions and GST refunds.

Bank Realisation Certificate (BRC): A BRC is essential for exporters selling software or providing services about it because it falls under SOFTEX. SOFTEX is a form issued by the RBI and must be mandatorily filled out by software exporters. This document is irrelevant if you’re a freelancer or an exporter with no relation to software. 

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Choosing the Best Way to Receive Money from Canada to India

Despite the above breakdown, it’s hard to decide the best payment method for your business. It depends on what’s most important for you. Low fees, fast transfers, real-time exchange rate or all of the above? To help you decide, we have rounded up all the above points in this section.

Banks

Banks, as trusted financial institutions, must have been at the top of your mind, but when you’re starting, it might not be the best option. 

For starters, a SWIFT transfer takes 2 to 7 business days to settle a payment. It can take more time if there are many intermediary banks or due to incorrect details. 

In addition to slow settlement, high fees take a deep cut out of your income. Here’s an illustration of different fees applied by banks on international money transfers:

Imagine you receive a payment of CAD 10,000 from your client and the current CAD to INR exchange rate is Rs.60

The above illustration must have given you an idea of how expensive bank transfers are. To make matters worse, you have to do multiple follow-ups to collect FIRA which is an additional hassle for you. 

Banks might be a reliable option for large businesses handling high volumes of international payments as they can negotiate exchange rates and also get personalized services. However, for small and medium businesses, and freelancers, banks might be an expensive and time-consuming option.

PayPal and Other Payment Gateways

PayPal is another popular platform to get international payments from Canada. But it might not be the best option for receiving all kinds of payments. 

Case in point: if your client transfers an amount of less than CAD 1,000 using a Credit Card, it’s a suitable option for you. The amount gets added to your PayPal account quickly, but it may another 5 days for the payment to appear in your bank account. 

PayPal charges 4.4% as a transaction fee and 0.30 CAD as a fixed fee. The markup rate is about 4% on the current exchange rate of the Indian currency meaning if the rate is Rs.60, then PayPal’s rate will be Rs. 57.6. On a CAD 10,000 payment, you will lose Rs. 24,000.

PayPal provides a digital FIRA covering all the transactions in a month on the 15th of the following month. This might be bad news for you if you prefer instant documentation for payments.

PayU is another example of a payment gateway that offers convenience but charges a flat fee of 3% on the transaction amount plus 18% GST. So on a CAD 10,000 payment, the charges will be Rs. 3,540.

Online Remittance Platforms

Online remittance platforms charge fees based on the payment method. Other than fees, it’s a good option for making personal transfers, but not ideal for business payments because it doesn’t provide FIRA which is necessary for businesses.

Virtual International Bank Accounts

Virtual bank accounts are the modern solution for receiving payments from Canada to India. Platforms like Wise, Payoneer, and Skydo settle payments in 24-48 hours and bypass the high SWIFT fees. 

However, each platform levies its charges on the transaction amount. Payoneer fees can range from 3% -6% of the transaction amount depending on the method of payment with additional markup on conversion and withdrawal fees.

Wise Business usually charges 1.8% of the transaction amount plus FIRA fees.

In comparison to other platforms, Skydo offers straightforward and transparent pricing. For receiving an amount up to $2,000 you pay $19. For anything more than $2000 but less than $10,000 the charges are $29 and for payments upwards of USD 10,000, a 0.3% fee is charged.  The amount is converted to INR at a live exchange rate with no markups. 

Skydo and Payoneer offer FIRA instantly free of cost. Wise, on the other hand, charges a fee.

How Skydo Makes It Easy to Receive Payments from Canada to India

Skydo keeps the process of receiving payments from Canada to India simple, transparent, and cost-effective. Setting up a virtual account for your business requires only five minutes. 

There are no hidden fees, you get the current exchange rate value, and you can withdraw the amount in less than 24 hours. To keep your business compliant with the RBI regulations, it automatically creates a FIRA for every transaction at no additional cost.

Sign Up for Skydo and choose a hassle-free payment partner for expanding your business in Canada.