What is SWIFT transfer and why is it expensive?

You've just landed a client in New York, closed a deal with a company in London, or completed a project for a startup in Singapore. The work is done, the invoice is sent—but now comes the tricky part: actually getting paid.

Your client says they'll send payment via SWIFT to your HDFC or ICICI account. But then the waiting begins. Three days pass. Then five. Finally, the money arrives, but it's ₹3,000 to ₹5,000 less than expected. What happened to your earnings?

If you're an Indian freelancer, exporter, or business receiving international payments, you've probably experienced this frustration. Understanding how SWIFT transfers work when money comes into India can save you thousands of rupees and help you avoid unnecessary delays.

This guide explains everything about receiving international payments through SWIFT in India. You'll learn how the system works, why fees eat into your earnings, what causes delays, and most importantly, what you need to do for compliance with RBI regulations.

Understanding how SWIFT transfers work for India

Despite what many believe, SWIFT doesn't actually move your money. It's a messaging system that connects over 11,000 banks across 200+ countries. When your US or UK client sends payment, their bank uses SWIFT to send secure instructions to your Indian bank about the transfer.

Each bank has a unique SWIFT code, also called a BIC code. HDFC Bank Mumbai uses HDFCINBB, ICICI Bank uses ICICINBB, State Bank of India uses SBININBB, and Axis Bank uses AXISINBB. Think of your SWIFT code like a postal address for your bank—it ensures the payment message reaches the correct financial institution in India.

How money reaches your Indian bank account

Most international transfers to India don't happen directly. Your client's bank—say Chase Bank in the USA—initiates the SWIFT message first. Then one or more correspondent banks in different countries process the transfer. Finally, your Indian bank receives and credits your account.

Each intermediary bank along this route charges its own fee. This explains why you often receive less than the invoiced amount. Hidden deductions happen at multiple points before the money reaches India.

Let's say your client sends $1,000 from their US bank to your HDFC account in Mumbai. The sender's bank charges $25 as a wire transfer fee. An intermediary bank deducts $15 for processing. HDFC Bank charges ₹500-1,000 as an inward remittance fee. A forex markup of 2-3% reduces your amount by another ₹1,600.

Instead of ₹83,000 (at ₹83/$), you receive around ₹79,900. You've lost approximately ₹3,100 in the process, and you had no control over most of these deductions.

Why receiving SWIFT payments in India is expensive

When receiving international payments in India through traditional bank SWIFT transfers, you face fees from multiple sources. The sender's bank charges $20-50 to your client. Intermediary banks deduct $10-20 each. Your Indian bank applies receiving fees of ₹500-1,500, depending on which bank you use. Some banks charge ₹100-500 separately for FIRA compliance documentation.

These fees stack up quickly. For a freelancer receiving $1,000 monthly, annual fees can exceed ₹40,000—eating significantly into your earnings.

Currency conversion markups

The exchange rate problem is where most money disappears. Banks don't use the mid-market rate you see on Google. Instead, they add a 2-4% markup that rarely gets disclosed clearly.

Here's how it works. Google shows ₹83 per USD. Your bank offers ₹80.50 per USD. You lose ₹2.50 per dollar. On a $1,000 payment, this markup alone costs you ₹2,500. This hidden charge is often the biggest deduction when receiving international payments.

Why do traditional Indian banks charge more

Legacy banking infrastructure makes SWIFT transfers to India expensive. Manual processing and compliance checks add operational costs. Batch processing systems cause delays because they don't work in real-time. Indian banks have limited negotiating power with correspondent banks, and regulatory compliance costs get passed to customers.

Indian banks have little incentive to reduce fees since SWIFT transfers lack competition in the traditional banking space. You can't choose which intermediary banks process your transfer, so you're stuck with whatever fees and exchange rates they apply.

How long does a SWIFT transfer take to India?

Receiving international payments in India typically takes 2-4 business days from the US or UK, 3-5 business days from Europe, and 3-7 business days from other countries. Even though SWIFT messages are instant, the actual fund transfer takes days due to correspondent banking procedures and compliance checks.

Several factors cause delays. Time zone differences play a significant role—if your client sends payment late Friday in the US, Indian banks might not process it until the following Tuesday. Bank holidays in both the sender's country and India can add days to processing time.

Incorrect SWIFT details trigger verification delays. Missing or wrong SWIFT codes, account numbers, or IFSC codes force banks to pause and verify information. Compliance checks for RBI and FEMA regulations require purpose codes and documentation verification, which takes time. More correspondent banks in the chain means more delay points. Payments initiated on Friday often don't process until Monday or Tuesday.

What you need to provide for faster processing

To minimise delays when receiving SWIFT transfers in India, you need to share accurate information with your clients. Provide the correct SWIFT/BIC code for your specific bank branch. Give your full account number, not just the last four digits. Include your branch's IFSC code to facilitate internal routing. Make sure your complete registered address matches bank records exactly.

Share the purpose code if your client's bank requests it. Have your PAN details ready for amounts over certain thresholds. Double-checking these details with your Indian bank before sharing with clients can prevent week-long delays.

Critical: FIRA compliance for receiving international payments

FIRA stands for Foreign Inward Remittance Advice. It's a mandatory document issued by Indian banks as proof that you've received an international payment. Previously called FIRC (Foreign Inward Remittance Certificate), most banks now issue FIRA or e-FIRA.

Every rupee you receive from abroad must be documented under the RBI's FEMA regulations. FIRA serves as your official proof, and you'll need it for multiple purposes throughout the year.

Why freelancers and businesses need FIRA

Export services are zero-rated under GST. To claim input tax credit refunds, you must submit FIRA as proof. When declaring foreign income on your tax returns, FIRA validates that earnings came from a legitimate export of services. Government export incentive schemes require FIRA documentation to process benefits.

Chartered accountants need FIRA for accurate books and audit trails. RBI may request FIRA during routine checks of foreign exchange transactions. Without proper FIRA documentation, you risk compliance issues and lose out on legitimate tax benefits.

How to get FIRA from Indian banks

The traditional bank process requires you to request FIRA from your bank after receiving payment. You provide transaction details, purpose code, and invoice copies. Then you wait 7-15 days for processing. Banks charge ₹100-500 per FIRA, and fees vary by bank. Finally, you collect a physical or digital copy.

This process has significant issues. Long waiting periods delay tax filings. Banks may charge for each certificate you need. Getting FIRA requires multiple follow-ups, and manual errors in documentation are common.

Modern fintech platforms like Winvesta, Wise, and others automatically generate FIRA within 24 hours at no extra cost. This is significantly easier than traditional banks and saves both time and money.

Pros and cons of receiving SWIFT transfers in India

SWIFT makes sense in certain situations. Nearly every international business can send SWIFT payments to Indian banks, which gives you universal acceptance. Whether you have HDFC, ICICI, SBI, Axis, or any other bank account, SWIFT works. High-value transactions above ₹10 lakhs are often safer through established SWIFT channels.

Some corporate clients or government agencies only process payments via SWIFT, so you don't have a choice. Traditional banking creates a clear documentation trail for compliance. You can receive payments using your existing bank account without setting up new accounts.

Major limitations for Indian recipients

Combined charges often exceed 4-6% of your transfer amount. Processing takes 3-7 days, which impacts cash flow, especially for freelancers who need regular income. Banks' forex markups reduce your earnings by 2-4% without clear disclosure.

The final credited amount is often less than invoiced, without a clear explanation of where deductions happened. Getting compliance documents from traditional banks requires time and follow-ups. Unlike courier services, you can't track where your money is during transit.

Better alternatives for Indian freelancers and small businesses

Modern fintech platforms designed for India offer significant advantages. You can get virtual foreign accounts with local US, UK, or EU account details so clients pay domestically. Total costs drop to 1-2% versus 4-6% for SWIFT. Transfers complete in 24-48 hours versus 3-7 days.

Compliance documents are generated automatically and instantly. You know the exact fees and forex rates upfront with transparent pricing. Exchange rates are at mid-market or near mid-market levels. Platforms like Winvesta, Wise Business, Skydo, and Payoneer are popular among Indian freelancers for these reasons.