How to Transfer 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 ways through which your clients can transfer money from Canada to India 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. Note that in this blog, we will mostly be focussing on business payments and no 

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

Here are the most popular ways for your clients to transfer money from Canada to India:

Banks

Banks use international wire transfers to transfer money from Canada to India. It is definitely the most popular way to transfer across borders, but it comes with its own caveats which we will look. into later in the blog. 

Payment Gateways

This method allows businesses to make payments and transfer money from Canada to India 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 and these accounts provide an easy and affordable way to transfer money from Canada to India. 

Remittance Platforms

Wise P2P and Western Union fall into this category and these are mostly used for personal transfers. These platforms also do not provide FIRA for receiving international payments, which can make compliance harder for you. 

How Much Time It Takes to Transfer Money From Canada to India

The duration of transferring and 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  transfer money from Canada to 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 in Canada transfers money to you in India via PayPal, then it 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

International virtual accounts are the modern way to make cross border payments. These are virtual bank accounts tied to your main bank account in India. So your client in can pay you in your virtual bank account in Canada, making it a local transfer instead of an international one, bypassing SWIFT fee. 

Virtual account platforms are faster than bank transfers, but the duration of completing a cross-border payment depends on the platform. For example, Skydo settles  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 Transferring Money from Canada to India?

Fees are a key factor when choosing a payment partner. High platform fees reduce the amount you receive, and in most cases, the cost to transfer money from Canada to India is passed on to the receiver. 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 sending as well as the receiving bank. If your clients transfers you money from Canada to India, then they will have to pay a SWIFT fee, roughly ranging between CAD 15 to CAD 80, depending on the bank and they will mostly pass this fee on you. Further, your receiving bank in India, may also charge a fee for receiving an international payment. 

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. So if your client transfers money from Canda to you in India via PayPal, you will have to pay 4.4% as transaction fee plus 0.30 CAD as fixed fee. Further it also levies a 4% markup on the ongoing exchange rate meaning you will effective exchange rate for converting CAD to INR will be 4% lower than the live forex 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 Transfer Money  from Canada to India

For your client to transfer money from Canada to India, you would need to share your respective details with them, including your name, bank account details and SWIFT code for a SWIFT transfer. They may also need to share some identity proof if required by the bank. 

The receiver, in this case the freelancer or business in India, also need to share certain documents and information while receiving the payment as well as while sharing your invoice

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 Transfer 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, when contemplating you can your client can transfer money from Canada to India. However, receiving your international payments via banks might not be the best and most affordable option for you especially if you are a freelancer or small business not processing huge volume of payments. 

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. As we've mentioned, SWIFT transfer via banks will cost around CAD 15 to CAD 80 in SWIFT fee, which will mostly be passed on to you by your client. Then there will be unfavourable exchange rate offered by the bank, which will further eat into your income. Let's understand this with a quick example.

Suppose your client is transferring a payment of CAD 10,000 to you via banks.

So first there will be a SWIFT fee of say around CAD 50 to transfer the money from Canada to India, which mostly will be adjusted by payment making it CAD 9950. Now, this CAD 9950 will be converted in INR by your bank. 

Consider the ongoing exchange rate to be 1 CAD = INR 61. However, most banks levy a 2-3% forex markup, so your effective exchange rate will stand at say INR 59. So you will receive 9950*59 = INR 5,87,050 from your bank. 

So for your payment of CAD 10,000, which ideally should have been INR 6,10,000, you will receive  INR 5,87,050, a difference of INR 22,950 lost to fees and forex markups. 

Additionally, collecting FIRA requires multiple follow-ups with your bank, often incurring extra charges—adding to the hassle

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 transfer 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 . So on a CAD 10,000 payment, the charges will be INR 3000.

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 Transfer Payments from Canada to India

Skydo keeps the process of transfer payments from Canada to India simple, transparent, and cost-effective. All you need to do is set up your account on Skydo and you will get virtual accounts in key geographies like the US, Canada, Europe and more in less than 5 minutes. Now, all you need to do is share your Canadian virtual bank account number with your client in Canada. The client will make the payment in that account making it a local transfer instead of an international one, bypassing SWIFT fee. Skydo will then consolidate the payments, convert it to INR at live exchange rate without any markup and deposits it in your Indian bank account. 

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.