What Indian businesses must understand before taking payments from foreign customers.

Accepting payments from international customers is an important milestone for many Indian freelancers, agencies, SaaS companies and export focused businesses. But unlike domestic transactions, cross border card payments fall under a tighter regulatory framework. The Reserve Bank of India (RBI) regulates every part of how foreign money enters the country, how it is processed, how it is converted and how it is recorded for compliance.

Businesses that activate international card acceptance without understanding these rules often face payout delays, document requests or unexpected account restrictions. This guide explains the RBI regulations that apply to cross border card payments and what Indian businesses must do to stay compliant.

Why RBI Oversight is Stricter for International Card Payments

Domestic card payments travel through Indian acquiring banks and do not involve any foreign currency movement. Cross border card payments are different. When a client abroad pays an Indian merchant, the funds originate outside India and must enter the country as a foreign inward remittance.

Because foreign money enters India’s banking system, it becomes subject to:

• FEMA (Foreign Exchange Management Act) rules
• Anti money laundering standards
• Purpose code classification
• Reporting requirements

RBI sets rules for these processes to ensure that the inflow of foreign currency is legitimate, properly tracked and used for permitted purposes.

The 7 Mandatory RBI Requirements for Cross Border Payments

Requirement 1: Merchant Category and Business Model Verification

Before enabling cross border card payments, payment gateways must evaluate the merchant’s business model. This includes checking what the business sells, who the target customers are, how the service is delivered and whether the activity falls under a permitted category for exports.

• Checks: Risky or restricted categories face additional scrutiny. RBI expects payment providers to ensure that Indian businesses accepting international payments do not fall into sectors with a history of chargebacks, fraud or regulatory violations.
• Best Practice: A clear website, proper service descriptions and visible contact information help merchants pass this review faster.

Requirement 2: Full KYC Before Activation

RBI mandates full KYC (Know Your Customer) for any merchant that accepts foreign currency. Payment providers must collect and verify documents such as PAN, identity proof, business registration and bank details.

• Verification: Any mismatch between the bank account and the legal entity applying for international acceptance can delay approval.
• Documentation: For companies, additional documentation such as incorporation certificates or partnership deeds may be required. For freelancers, a clean identity profile and consistent bank information are essential.

Requirement 3: Purpose Code Classification for Every Foreign Transaction

This is one of the most important RBI requirements for cross border payments. Every foreign payment entering India must be tagged with a purpose code that indicates the type of service or product exported (e.g., software development, consulting, design work).

• Compliance: If the purpose code is missing or incorrect, the payment may be delayed or rejected by the bank. Merchants must ensure that the services described in their invoices match the selected code.
• Importance: Correct purpose code reporting ensures that the business remains compliant with FEMA and avoids future tax or audit complications.

Requirement 4: Foreign Exchange Conversion Through Authorised Channels

RBI requires that conversion of foreign currency into INR happens through authorised dealer banks or authorised channels.

• Process: Payment gateways must route the money through these channels and apply regulated conversion processes.
• Transparency: The conversion must be recorded accurately, and the exchange rate used must be shown in settlement records. Regardless of the method, the conversion must comply with RBI’s foreign exchange guidelines.

Requirement 5: Mandatory Inward Remittance Documentation

Payment providers must generate inward remittance documentation for every cross border transaction. This documentation is critical for proving the legitimacy of foreign income in India. RBI requires banks to issue a Foreign Inward Remittance Advice (FIRA) or a similar document that records:

• The sender details
• The amount received
• The currency
• The exchange rate applied
• The purpose code
• The date of settlement

Merchants must keep these records for tax filings, audits, export reporting and GST compliance.

Requirement 6: Chargeback and Dispute Rules for International Cards

International cards come with higher chargeback risk. RBI requires that payment providers handling foreign cards maintain robust fraud detection systems.

• Risk Management: Merchants with poor chargeback history may face restrictions or additional reviews.
• Liability: RBI also expects payment providers to inform merchants about their liability in global card disputes. This is why many gateways take more time reviewing new merchants before activating international acceptance.

Requirement 7: Settlement Timelines and Additional Review for First Payouts

RBI does not fix a universal settlement timeline for cross border payments, but it mandates that banks follow proper verification checks before releasing foreign funds to Indian accounts.

• First Payouts: For this reason, first time cross border payouts often take longer.
• Standard Cycle: Payment gateways must check KYC, business model, purpose codes and risk filters before releasing the first payout. Subsequent payouts usually follow a standard cycle unless flagged for review.

How India Focused Platforms Simplify RBI Compliance

Global payment gateways treat India as one of many markets. Their systems are designed for universal compliance rather than India specific rules. As a result, Indian merchants often find themselves dealing with repeated documentation requests, unclear purpose code mapping and unpredictable payout holds.

India focused platforms take a different approach. Their onboarding, transaction processing and settlement flows are built around FEMA rules, Indian bank requirements and RBI guidelines. They ensure that:

• Purpose codes are correctly mapped for every payment.
• Foreign currency is routed through authorised channels.
• Inward remittance documentation is generated automatically.
• Merchant onboarding aligns with RBI KYC rules.
• Settlement timelines match Indian banking processes.

This reduces friction and helps merchants stay compliant without needing to track regulations manually.

Where BRISKPE Fits Into This Context

BRISKPE follows all RBI and FEMA requirements for foreign inward remittances, but structures the process in a way that is more merchant friendly.

• Collection: Instead of routing foreign card payments through expensive card networks, BRISKPE uses virtual foreign currency accounts that streamline inward remittance compliance.
• Automation: The platform collects the required KYC documents, maps purpose codes accurately and provides the inward remittance documentation needed for Indian tax and export reporting.

This approach reduces the complexity businesses face when relying solely on traditional card gateways for international payments.

Final Thoughts

Accepting cross border card payments in India is not only a technical process but a compliance driven activity governed by the RBI. Merchants must complete full KYC, maintain accurate documentation, classify their earnings under correct purpose codes and understand how foreign currency settlement works.

While global gateways enable international payments, India focused platforms simplify compliance and help businesses align with RBI rules more smoothly. Whether you are a freelancer, an agency or a SaaS company, knowing these regulations is essential for clean, predictable and compliant cross border income.