Many businesses serve clients around the world, but while selling products or services overseas is often straightforward, handling international payments can be much more complex. You can’t simply mail cash across borders—nor should you—because cross-border money exchange is heavily regulated, and fluctuating currency rates add another layer of difficulty. To navigate these challenges, businesses often use a process called inward remittance. In this article, we’ll explain what inward remittance is, how it works, and the common challenges businesses face when using it.
What is inward remittance?
Inward remittance is the term used to refer to money sent from a foreign country and received into a local bank account.
For example, if you have a US-based business with a local business bank account, any money received from a client’s account in Germany, Canada, or Australia would be considered an inward remittance.
Inward remittance is regularly used by both individuals and businesses receiving funds from overseas, whether for personal, commercial, or investment purposes. Common examples of inward remittances in practice include:
- A family member abroad sending money back home
- An overseas client paying a local business for goods or services
- A foreign investor transferring funds into a local company or account
Inward vs. outward remittances
Whenever money is sent from one country to another, both an outward remittance and an inward remittance are involved. The key difference lies in the direction of the transaction.
- Inward remittance: Funds received from a foreign country
- Outward remittance: Funds sent to a foreign country
The inward remittance process
Receiving an inward remittance typically involves the following steps:
- The sender initiates the transfer. The sender (based overseas) uses a bank or money transfer service, such as Wise, Western Union, or the SWIFT network, to send funds to the recipient’s account. For them, that’s an outward remittance.
- The details are verified. The sender provides the relevant recipient details (full name, bank name, account number, SWIFT/BIC code, and possibly a purpose for the transfer). Verification, fraud prevention, and anti-money laundering checks take place here to ensure the funds arrive safely and legally.
- The transfer is processed. The funds move through a network of intermediary banks or service providers (depending on the countries and currencies involved), which convert and route the transfer based on currency and jurisdiction.
- The recipient’s bank receives and credits the funds. The local bank processes the incoming funds and deposits them into the recipient’s account, converting them into local currency if necessary. For this bank (and the receiver), this is an inward remittance.
- The recipient receives confirmation. They are notified via email, SMS, or via their banking app that the funds have been credited and are available for use.
Common challenges and how to overcome them
Inward remittances are incredibly common, but that doesn’t mean they always pass through seamlessly.
These are the three most common challenges with receiving inward remittance, and how to prevent them from becoming big issues.
1. Delays due to incomplete or incorrect information
If the recipient information isn’t correct from the get-go, it can cause delays in processing or even cause the payment to be rejected.
Solve this by ensuring you provide the right information to the people sending you money and by stressing the importance of double-checking details before confirming the transfer.
2. High fees or poor exchange rates
Sending money across borders costs money, and some services charge more than others.
Generally speaking, modern services like BILL, Wise, or Revolut have lower costs than traditional banks.
It's also a good practice to agree with the entity sending the payment on who bears the costs involved for making the transfer (the sender or the recipient).
3. Compliance holds or rejections
If any aspect of an international transfer appears suspicious, this can put the brakes on the payment clearing.
The best practice here is to ensure that your transfer complies with local and international regulations, and to be prepared to provide supporting documents to verify the payment.
Working with a reputable provider helps avoid compliance issues.
How do you use inward remittance
There’s not a whole lot you need to do to use inward remittance—it’s initiated by the party sending the payment.
To be able to use inward remittance as a business, you’ll need to:
- Set up a business bank account that can receive international transfers and supports foreign currencies if needed
- Share your details with the payer, including your bank name, account number, SWIFT/BIC code, and business name
- Make sure you’re compliant with local regulations, such as identifying the purpose of the remittance and retaining supporting documents like contracts or invoices associated with the payment
- Monitor the transfer and confirm receipt of funds through your bank or payment platform
- Record the transaction in your accounting system for tax and audit purposes
Benefits of inward remittance
Inward remittance offers several advantages for individuals, businesses, and international economies, including:
- Economic stability for recipients. Receiving regular remittances helps families manage daily expenses, plan for emergencies, and maintain a stable financial footing, especially in developing regions.
- Improved access to essential services. Remitted funds are often used for high-impact needs such as education, healthcare, and housing, directly improving quality of life and long-term outcomes for recipients.
- Support for local economies. When remitted money is spent locally, it boosts demand for goods and services, supporting small businesses and generating employment. In some countries, inward remittances make up a significant portion of GDP.
- Encouragement of savings and investment. Many recipients use a portion of their funds to invest in small businesses, purchase property, or save for future goals, helping stimulate broader economic activity.
- Foreign currency inflow. Inward remittances bring valuable foreign exchange into the country, strengthening reserves and contributing to currency stability.
What is the foreign inward remittance certificate?
A Foreign Inward Remittance Certificate (FIRC) is the official document that a bank or financial institution issues to confirm that an inward remittance has been received in a foreign currency, serving as proof of receipt of funds.
A FIRC is often required for regulatory, accounting, or tax purposes. It's especially critical when receiving international payments for exports, services, or foreign investments.
How do you request a FIRC?
If you require a FIRC and haven’t received it automatically from your financial institution, follow these steps:
- Confirm that the inward remittance has been credited to your account
- Contact your bank to request the certificate
- Provide relevant transaction details, such as the sender’s information, the amount received, the currency, and the purpose of the remittance
- Submit any required forms (some banks may have a standard request format or online process)
- Wait for the bank to issue a physical or digital FIRC (they sometimes charge a small fee)
What is included in the FIRC?
A FIRC generally contains the following details:
- Name and address of the remittance recipient (beneficiary)
- Name and country of the remitter
- Amount received and the currency used
- Purpose of the remittance (e.g., export payment, consultancy fee, investment)
- Date of receipt and bank reference number
- Issuing bank’s official seal and signature
Automate international payments
Inward remittance is a critical component of international payments, but companies doing business overseas need more tools in their belt than that.
With BILL, you can make international payments in more than 130 countries, with powerful features like:
- Integrated spend tracking
- Streamlined accounts payable workflows
- Payments in local currencies
FAQs
What is the difference between inward and outward remittance?
Inward remittance is money received from overseas into a local account, while outward remittance is money sent from a local account to a recipient abroad.
How to accept an inward remittance?
You don’t need to do much to accept inward remittance—it’s something that your bank or financial institution will largely take care of.
You just need to provide the sender with your full bank details (account number, name, SWIFT/BIC code) and any required documentation.
The funds will be transferred and credited by your bank once processed.
How do you obtain inward remittance?
Inward remittance is typically received through international wire transfer or money transfer services (e.g., when an overseas client pays you).
How long does foreign inward remittance take?
It depends on the countries, banks, currencies, and service providers involved.
However, most transfers are completed within 1-5 business days. Delays can occur due to compliance checks or incorrect details, extending this timeframe.
Is it safe to remit money?
Yes, it is safe to remit money, as long as you use a reputable bank or licensed transfer provider. Ensure both sender and recipient information is accurate and avoid sharing sensitive data through unsecured channels.
What are the charges for inward remittance?
The fees involved in receiving inward remittance vary widely depending on the service provider and bank.
Some institutions charge a fixed fee; others apply currency conversion margins. It's best practice to confirm with your bank or financial institution of choice first.
