A bank routing number is a unique nine-digit code assigned to financial institutions in the United States. It identifies a specific bank so that the funds move accurately between institutions.

A bank routing number is also known as an <a href="https://www.skydo.com/blog/what-is-aba-number-and-how-to-find-it">American Bankers Association (ABA) routing number</a> or a routing transit number (RTN). If your client mentions any of these terms, they’re referencing the same 9-digit code.

Only US-based federal or state-chartered financial institutions that maintain an account at a Federal Reserve Bank are eligible to receive these numbers. LexisNexis Risk Solutions acts as the official registrar of routing numbers. New financial institutions and banks must apply directly to them for routing numbers.

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The structure of the nine digits is fixed and serves a specific purpose:

The 12 Federal Reserve Districts associated with the first two digits are:

A bank routing number example is Chase Bank’s number: 021000021. Here, "02" refers to the New York Federal Reserve district, "1000" is the unique identifier for Chase Bank, and "1" is the check digit.

Financial systems use routing numbers to process direct deposits, ACH transfers, wire transfers, and bill payments.

Remember that a routing number identifies the bank branch rather than an individual account. Every customer at the same branch shares the same routing number. The account number, which contains 8–12 digits, is the specific identifier for the individual's funds within that bank.

Bank routing numbers are needed to ensure that funds from electronic or paper transactions reach the correct bank automatically. They are like a postal address for financial institutions, helping automated clearing systems to pinpoint the exact US bank that should receive a specific payment.

Bank routing numbers are needed for the following specific reasons:

Direct deposits: Employers and government agencies use routing numbers with account numbers to deposit paychecks or tax refunds directly into the right bank.

Bill payments: Utility companies use routing numbers to automatically pull recurring monthly payments from customer’s accounts.

Check processing: The automated systems read the first nine digits on the bottom-left of a US paper check to direct the money during processing

Accuracy: When moving money between different US banks, the routing number tells the automated system which institution to contact. Even a one digit error can cause a transaction to fail or send money to the wrong institution.

Speed: As the system is automated, payments settle much faster than manual sorting methods.

ABA routing numbers vs. ACH routing numbers

ABA routing numbers were created for paper checks, but are now used for electronic transfers. <a href="https://www.skydo.com/blog/ach-routing-number-explained">ACH routing numbers</a> are used only for electronic payments like payroll. While many banks use the same nine-digit code for both, some large institutions use different numbers. Always verify with the bank which number applies to your transaction type.

When Does an Indian Freelancer or Exporter Need to Know About Routing Number?

An Indian freelancer or exporter needs a routing number only when using a US-based virtual account to collect payments from US clients via ACH. It is not applicable for standard SWIFT wire transfers into an Indian bank account.

Indian bank accounts do not have ABA or ACH routing numbers. They use the 11-character IFSC for domestic transfers and SWIFT codes for international wire transfers.

When do you need a routing number?

When do you not need a routing number?

You will find the routing number on paper checks, online banking portal, banking app, even on the bank website. Here’s a quick guide on where you must be looking:

Paper check: The routing number is the first set of nine digits printed in the bottom-left corner. It is printed in magnetic ink (MICR format) for automated processing. The sequence on a check always reads from left to right: routing number, then account number, then check number.

Banking portal or app: The routing number is listed under "Account Details," "Account Summary," or "Direct Deposit Information." You will also find the routing number on a digital or paper monthly statement near the account information.

Bank website: Banks list their routing numbers for different states or transaction types on their website. The American Bankers Association also provides an official routing number lookup tool to verify a routing number.

If these methods are unavailable, you can call the bank’s customer service department to confirm the routing number.

But if you’re using a <a href="https://www.skydo.com/blog/virtual-account-numbers">virtual bank account</a>, the routing number is right in the platform dashboard. You don’t need any of these extra sources.

Routing Number vs Account Number: Key Differences

The key difference between a routing number and an account number is the level of identification. A routing number identifies the financial institution, while an account number identifies a specific bank account.

Besides, remember these major differences:

Routing Number vs SWIFT Code vs IFSC: What's the Difference?

The core difference between these codes is geography. Routing numbers are for domestic transfers within the US, IFSC handles domestic transfers within India, and SWIFT codes handle international transfers across borders.

Routing number (ABA/ACH): Routing numbers are nine-digit codes regulated by the American Bankers Association (ABA) and the Federal Reserve. It is only used within the US for domestic ACH transfers, wire payments, check clearing, and direct deposits.

IFSC (Indian Financial System Code): IFSC is an 11-character alphanumeric code used only within India and regulated by the Reserve Bank of India (RBI). The first four characters represent the bank name, the fifth is always zero, and the last six digits identify the branch.

SWIFT (Society for Worldwide Interbank Fund Transfer): A SWIFT code, also known as Bank Identification Code (BIC) comprises 8 or 11 alphanumeric characters and is regulated by the ISO/SWIFT network. Think of it as an international mailing address for a bank.

Indian exporters or freelancers use the IFSC for domestic transfers within India. They use a SWIFT code only when receiving an international wire or paying a foreign vendor. A routing number is useful to them when they have a virtual US bank account to receive ACH payments from a US client.

How Does Skydo Help Indian Freelancers with a Bank Routing Number?

Skydo helps Indian freelancers and exporters with a US virtual bank account, which includes a dedicated ABA/ACH routing number. Your US client uses the local ACH payment network to settle the payment.

Skydo solves a major problem for Indian business owners. As Indian banks do not use routing numbers and rely on SWIFT codes for international payments, your clients only have the option to send the payment as a SWIFT transfer. SWIFT payments are reliable, but slow and expensive.

With Skydo, you get a US virtual account accessible from India. US clients now have the option to use ACH methods and avoid international wire fees on their end. Plus, you get the payment in less than 48 hours.

It takes 10–15 minutes to set up your Skydo account. The virtual USD account and its associated routing number are available immediately after onboarding. Once you receive an international payment in the virtual account via ACH, Skydo converts the USD and settles the amount into your bank account within one working day.

Skydo uses transparent forex rates and a flat-fee pricing model to remove hidden costs:

There are no monthly maintenance fees. Every transaction includes an automatic Foreign Inward Remittance Advice (FIRA) certificate, which is necessary for tax compliance and legal documentation in India.

Skydo has ‌India-based customer support through WhatsApp, call, and text to assist with payment status updates.

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Bacs Direct Debit is a UK payment method that lets a business collect money from a customer's bank account once the customer has authorised it. It is a pull payment, because the organisation receiving the money starts each collection rather than waiting for the customer to send it.

That structure is what makes it the default for anything billed on a schedule. UK businesses use it for utility bills, gym memberships, insurance premiums, council tax, loan repayments, and subscription services, where the same customer is charged repeatedly and neither side wants to handle a manual transfer each cycle. It is not built for one-off or urgent payments, and it cannot be used to push money out to someone.

For example, a broadband provider charging 30 pounds a month asks the customer to sign a Direct Debit Instruction once at sign-up. From then on, the provider submits the collection each month and the amount leaves the customer's account on the agreed date without the customer doing anything.

<a href="https://www.skydo.com/blog/bacs-payment">Read more about BACS here</a>

A Bacs Direct Debit moves through three main stages before the money reaches the business, i.e., the customer first authorises the collection, the business gives advance notice, and the payment then goes through Bacs' three-working-day processing cycle.

The customer sets up a Direct Debit Instruction (DDI), providing details such as their name, account number, and sort code. This authorisation allows the business to collect agreed payments from the account. The DDI can be completed on paper or electronically through Paperless Direct Debit. Once the mandate is in place, the customer does not need to authorise each recurring collection separately.

Before collecting a payment, the business normally tells the customer how much will be taken, when it will be collected, and how often. This notice is generally provided at least 10 working days before the first collection unless a different notice period has been agreed. Relevant changes to the payment amount, date, or frequency must also be communicated to the customer.

<a></a>Step 3: The Three-Day Processing Cycle

Once the collection instruction enters the Bacs system, it follows the standard three-working-day timetable:

The cycle runs on UK working days, so weekends and bank holidays can move the collection date forward. For example, a Monday submission can settle on Wednesday, while a Friday submission can settle on the following Tuesday.

The first collection can take longer because the Direct Debit needs to be established and the required notice given. Later collections generally follow the regular Bacs timetable. If the customer's account does not have enough funds, the payment can be returned unpaid and reported to the business through the ARUDD service.

Customers can cancel a Direct Debit through their bank or building society at any time. Where a payment has been taken incorrectly, the Direct Debit Guarantee provides for a full and immediate refund.

<a></a>What Are the Common Use Cases of BACS Direct Debit?

Bacs Direct Debit is used wherever a business bills the same customer repeatedly on a known schedule. The common use cases fall into a few categories, all of which share the same trait: the charge repeats, the customer has already agreed to it, and neither side wants to handle a manual transfer each cycle.

Two things explain why these categories converged on Direct Debit. The first is cost and predictability for the business, since a single submission can collect from thousands of customers at a few pence each and the settlement date is known in advance. The second is customer confidence, because the Direct Debit Guarantee entitles the payer to an immediate refund if a collection is taken in error, and the mandate can be amended or cancelled through their own bank at any time.

<a></a>Bacs Direct Debit vs Faster Payments vs CHAPS: What's the Difference?

The three main UK domestic payment methods, Bacs Direct Debit, Faster Payments, and CHAPS, differ mainly in who initiates the payment, how quickly funds settle, and what the transaction costs.

For Indian exporters and freelancers, the key distinction is that Bacs Direct Debit is a pull payment. A UK client cannot simply use Direct Debit to send money to you. The relevant options for receiving a UK client's payment are Bacs Direct Credit and Faster Payments, both of which are push-payment methods.

"Bank transfer" is a broad everyday term in the UK and often refers to Faster Payments, although it can describe other payment methods too. Bacs is the slower, scheduled option, making it particularly suitable for recurring and high-volume payments.

We’ve covered the differences in detail here

What Are the Bacs Direct Debit Scheme Rules?

Bacs Direct Debit operates under rules set by Pay.UK and documented in the Service User's Guide and Rules (SUGR). These requirements cover how organisations obtain and manage customer authorisations, notify customers about collections, submit payment instructions, maintain records, and deal with unpaid or disputed Direct Debits.

<a></a>BACS Services that Support Direct Debit Administration

Several Bacs services handle the information that moves between organisations and banks when Direct Debit instructions change or cannot be collected:

These services work alongside the Bacs rules rather than replacing the organisation's responsibility to follow them.

Can Indian Businesses Receive Bacs Direct Debit Payments from UK Clients?

No. An Indian business cannot receive a Bacs Direct Debit directly into its Indian bank account. Bacs is a UK payment system that requires UK banking details, such as a sort code and account number. However, an Indian business can receive a UK client's payment through Bacs Direct Credit or Faster Payments by using a cross-border payment provider that provides UK receiving details.

A cross-border payment provider can give the Indian business UK receiving details, allowing the UK client to send GBP through a domestic payment method. From the client's side, this means using UK account details rather than arranging an international wire or providing SWIFT information.

Once the GBP reaches the UK receiving account, the provider converts it into INR and transfers the funds to the business's Indian bank account as a foreign inward remittance. For Indian exporters, the payment can form part of export proceeds subject to applicable FEMA and RBI requirements.

The important distinction is that the Indian business is not collecting money through Bacs Direct Debit. Direct Debit is a pull payment that requires the payer's prior authorisation. For receiving money from a UK client, the client instead sends the funds through Bacs Direct Credit or Faster Payments.

Direct access to UK payment systems requires appropriate UK banking infrastructure. For an Indian business without its own UK banking relationship, a cross-border provider offering local UK receiving details can therefore provide a simpler route.

How Skydo Helps Indian Exporters Accept Payments from the UK?

For an Indian exporter without UK banking details, receiving a domestic Bacs or Faster Payment from a UK client is not possible directly. The client needs a UK sort code and account number to make a local payment. Without them, the business has to use an international payment route instead. With Skydo,

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PSD2, or the Revised Payment Services Directive, is the European Union's framework for regulating payment services and creating a more open, competitive, and secure payments market. It introduced stronger security requirements for online payments while opening the market to regulated third-party payment providers.

PSD2 applies to payment service providers and banks within its scope across the EU and European Economic Area. Among other requirements, it introduced Strong Customer Authentication (SCA) for many electronic payments and established rules governing regulated third-party providers that access payment accounts through open banking.

The directive was adopted in 2015, and EU member states were required to transpose it into national law by 13 January 2018. The SCA requirements subsequently came into force in September 2019, completing the main PSD2 implementation.

PSD2's key features include strong customer authentication, open banking through regulated third-party providers, rules for payment initiation and account information services, and restrictions on certain payment surcharges. Together, these measures were designed to make electronic payments safer while opening the market to new payment providers.

PSD2 applies to payment service providers operating within the EU and EEA, including banks and regulated payment institutions. The EEA includes the EU member states plus Iceland, Liechtenstein, and Norway.

The UK is no longer part of the EU's PSD2 framework or its payment-services passporting system. It now operates under its own Payment Services Regulations, although many of its payment rules remain closely aligned with PSD2.

PSD2 does not directly regulate an Indian freelancer or exporter simply because they receive a payment from Europe. However, the European payment provider handling the transaction may have to follow PSD2 requirements such as strong customer authentication when the customer authorises the payment.

PSD2 makes payments safer and more transparent for consumers while giving regulated non-bank providers more room to compete with traditional banks. Its main benefits include wider open banking access, greater control over account data, clearer payment information, stronger refund protections, and improved security.

PSD2 expanded on PSD1 by making payments more secure, opening bank-account access to regulated third parties, strengthening consumer protection, and bringing newer payment services into the regulatory framework.

PSD1 was approved in 2007 and came into effect in 2009. It created a common legal framework for electronic and non-cash payment services across the EEA, opened the market to new payment service providers, and helped establish the regulatory foundations for the Single Euro Payments Area (SEPA).

By 2013, the growth of digital commerce and new payment services had exposed gaps in PSD1. The European Commission proposed PSD2 to extend consumer protection, improve payment security, and create a more competitive market for newer payment providers. PSD2 was approved in 2015, with EU member states required to implement it by 13 January 2018.

How Is PSD2 Relevant to Stop Hidden Fees?

PSD2 makes payment costs more transparent by requiring clear disclosure of charges and exchange rates, restricting certain surcharges, and giving consumers greater visibility into their account activity through open banking. It offers:

How Does PSD2 Affect Indian Freelancers and Exporters Receiving International Payments?

PSD2 can affect Indian freelancers and exporters indirectly through the European payment provider handling the transaction, particularly when that provider applies Strong Customer Authentication (SCA). The Indian recipient does not have a direct PSD2 compliance obligation simply because they receive a payment from Europe. Some challenges include:

A Mumbai-based UX designer invoices a Berlin startup. When the startup initiates the payment, its European bank may require SCA before authorising the transaction. If the client does not complete that verification, the payment may not be sent. The designer therefore sees a delay without necessarily knowing that the problem occurred during the client's bank-side authorisation.

What are the Challenges and Concerns With PSD2?

The main PSD2 challenges fall into two groups, i.e., customers face more choice, data-privacy concerns, and extra authentication steps, while businesses face compliance costs, technical integration work, stronger competition, and the need to educate customers.

What Does the Global Payments Landscape Look Like With PSD3?

PSD3 and the accompanying PSR are set to make Europe's payment market more connected, more tightly regulated, and harder to exploit. The changes affect how banks share account data, how payment fraud is detected and handled, and how non-bank providers participate in payment infrastructure. As of August 2026, however, the new framework is not yet in force.

<a></a>From Open Banking to Enforceable Infrastructure

The reforms aim to make account-data sharing work more consistently while giving users more say over access to their information.

Fraud prevention is becoming a larger part of the payment framework, with checks and provider responsibilities changing alongside it.

The changes also make it easier for some non-bank firms to participate in payment infrastructure while tightening the boundaries around exemptions.

How Does Skydo Help Receive Payments from Europe?

For Indian freelancers and exporters, Skydo offers a digital way to collect money from European clients without dealing with the usual bank paperwork and uncertainty. It combines local EUR receiving details, upfront pricing, payment visibility, automated FIRA generation, and export-compliance support in one platform.

With <a href="https://www.skydo.com/">Skydo</a>, you can get paid through a EUR account. Skydo gives you EUR receiving details at no account or maintenance cost. You can also open accounts in USD, GBP, SGD, AUD, and CAD. Your European client can pay using a local transfer method such as SEPA, while setup takes about five minutes and does not require a relationship manager.

Additionally, you know the cost before you transact. Payments with Skydo are:

There is no monthly fee or FX markup, so the exchange rate does not come with an additional percentage margin. Also, Skydo's live tracking shows the progress of an incoming transfer, including when a payment is held up during processing. This gives you visibility instead of having to repeatedly check with banks or the payer.

Additionally, Skydo generates an instant FIRA at no extra charge for each payment automatically. The certificate provides a record of the inward remittance that can be used for GST, tax, and other compliance requirements.

Exporters can connect their DGFT account, upload shipping bills in bulk, and use Skydo's payment mapping to generate eBRCs. The platform also provides support for closing relevant EDPMS entries. Alongside this, once Skydo receives the payment, funds are transferred to the user's Indian bank account within 24 hours, giving businesses a more predictable payout window.

Proforma Invoice: Meaning, Format And Template

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What Is a BACS (Bankers' Automated Clearing System) Payment?

BACS is the UK's electronic clearing system for moving pounds sterling between bank accounts. Instead of settling each transaction on its own, it collects payment instructions into batches and clears them on a fixed three-working-day cycle.

That batch design is what makes it the default for scheduled, high-volume payments. UK businesses use it for monthly payroll, supplier invoices, state pensions, customer refunds, and any recurring bill that needs to leave or arrive on a predictable date.

The system runs on two payment types. Bacs Direct Credit pushes money out, with the payer instructing its bank to deposit funds into someone else's account. Bacs Direct Debit pulls money in, with a business collecting an agreed amount from a customer's account under a mandate the customer has already authorised.

For example, a UK company running payroll for 500 employees submits one Direct Credit file to its bank rather than 500 separate transfers. If the file goes in on Monday, BACS processes it on Tuesday and the money lands in employee accounts on Wednesday.

The <a href="https://www.skydo.com/blog/everything-about-fps-bacs">Bacs</a> network supports two main payment methods, and the key difference is who initiates the transaction. Bacs Direct Debit lets a business collect money from a customer's account after the customer has authorised the arrangement. Bacs Direct Credit works in the opposite direction, with an organisation instructing its bank to send funds to the recipient's account.

BACS transfers run on a three-working-day timetable, with each stage taking place on a separate working day.

For example, a payroll instruction submitted on Monday can be processed on Tuesday and reach employees' accounts on Wednesday. If the payment file misses Monday's cut-off, processing starts on the next working day, moving the expected payment date back by a day.

BACS uses a standard three-working-day cycle, so the payment date is determined by when the payment instruction enters the system.

The three-day count runs from Monday to Friday, excluding UK bank holidays. A weekend or bank holiday therefore moves the expected settlement date to the next available working day. For example, if a payment enters the BACS cycle on Thursday, the three working days are Thursday, Friday, and Monday, so the funds are settled on Tuesday.

A payment instruction submitted after the bank's cut-off may not enter the cycle until the next working day, which pushes the settlement date back by another day. The fixed schedule works well for planned payments such as salaries and recurring Direct Debits, where the sender and recipient can prepare for a known payment date.

BACS is a low-cost payment option for UK businesses, with charges commonly ranging from 5p to 50p per transaction.

The small charge per transaction becomes particularly valuable when a business needs to make hundreds or thousands of payments at once. A payroll run covering 1,000 employees, for instance, can be processed much more economically than 1,000 separate bank transfers.

Pricing is set by the business's bank or payment provider. Depending on the account, BACS processing may be included in a monthly business-banking charge rather than billed separately for each transaction.

Note that BACS itself does not add a network charge for receiving a payment. The applicable processing cost is generally paid by the organisation making the payment.

BACS vs Other Payment Methods in the UK (Faster Payments, CHAPS): Differences and Similarities

BACS, Faster Payments, and CHAPS all move GBP through the UK payments infrastructure, but they are designed for very different payment needs. BACS is built for scheduled, high-volume payments, Faster Payments is geared towards speed and 24/7 availability, while CHAPS is designed for high-value payments that need same-day settlement.

All three support GBP payments through UK banking infrastructure, although CHAPS can also handle cross-border sterling transactions. They are established UK payment systems operating within the country's regulated payments framework.

What Bank Details Does Your UK Client Need to Send a BACS Payment?

For a standard Bacs Direct Credit, your UK client will generally need the name on your account, your 6-digit sort code, and your 8-digit account number. These details tell the banking system where the payment should go and allow the payer's bank to verify the intended recipient.

BACS is a UK domestic payment system, so your client normally does not need an IBAN or SWIFT/BIC to make a Bacs Direct Credit. If they ask for those details, they may be setting up an international payment instead.

Ask the client to include something identifiable, such as your invoice number or business name. This makes it easier to match the payment to the right invoice when it arrives. Additionally, because Bacs Direct Credit follows a three-working-day processing cycle, your client should submit the payment at least three working days before the invoice due date, with extra time allowed if a weekend or UK bank holiday falls within the cycle.

Can Indian Freelancers Receive BACS Payments Without a UK Bank Account?

Yes. Indian freelancers and exporters can receive GBP from UK clients without opening a traditional UK bank account. Platforms such as Skydo help <a href="https://www.skydo.com/receive-international-payments-in-india">receive international payments in India</a>. It provides UK receiving details that let clients make local GBP payments, while the platform handles the conversion and transfer to India.

These accounts provide a UK sort code and account number that clients can use to send money through BACS or Faster Payments. Once the GBP arrives, Skydo converts it to INR and settles the funds into the recipient's Indian bank account.

For the UK client, the payment works like a domestic GBP transfer using the provided UK account details, rather than requiring a SWIFT transfer or an international wire.

<a></a>How Skydo Helps Indian Businesses Receive GBP Payments

<a href="https://www.skydo.com/">Skydo</a> provides a free GBP virtual account with a UK sort code and account number, allowing UK clients to pay through BACS or Faster Payments. Additionally, Skydo is considered to be one of the <a href="https://www.skydo.com/blog/best-international-payment-gateways-for-freelancers-india">best international payment gateways.</a> With Skydo, you:

<a href="http://www.skydo.com">Learn More Here</a>

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SEPA (Single Euro Payments Area) is a common payment framework that makes euro payments between participating European countries work much like domestic bank transfers. Its purpose is to create a standardised way to send and receive euros across the region, making cross-border payments simpler, more consistent, and easier to process.

For example, a business in France can pay a supplier in Germany €5,000 through a SEPA credit transfer. The French business can send the payment in euros to the supplier’s German bank account using the recipient’s IBAN, without having to navigate a separate payment system for the two countries.&nbsp;

Before SEPA, cross-border euro payments often involved different national banking systems and payment rules, making transfers more complicated and less predictable. SEPA brought these payments under a common framework with standardised rules, maintained by the European Payments Council (EPC), while the European Commission and European Central Bank provide the broader regulatory and oversight framework. SEPA credit transfers use the recipient’s IBAN to identify the destination account, and the accounts involved must be in countries covered by the relevant SEPA scheme. A BIC may also be used in some payment flows, but it is not universally required for SEPA credit transfers.

<a></a>What Are the Types of SEPA Transfers?

SEPA payments come in three main forms, i.e., Credit Transfer, Instant Credit Transfer, and Direct Debit. For an Indian business receiving an invoice payment from a European client, the two credit-transfer options are the ones that matter most.

For an Indian recipient, the SEPA payment type determines how the European payment leg is processed. Once the euros reach the receiving account, any conversion and settlement into India follows a separate process and timeline.

Money within SEPA moves through a shared clearing and settlement system built specifically for euro payments, rather than the correspondent-banking chain typically associated with international transfers.

For an Indian recipient using a platform such as <a href="https://www.skydo.com/">Skydo</a>, the journey from a European client's bank to the final Indian account happens in seven steps:

Note: The IBAN is the key identifier for a SEPA Credit Transfer and can contain up to 34 characters depending on the country. A BIC, also known as a SWIFT code, may be used in some payment flows but is not universally required for SEPA Credit Transfers.

"Instant" only describes the European leg of the journey. For an Indian recipient, the<a href="https://www.skydo.com/blog/how-long-does-international-wire-transfer-take"> time taken for an international wire transfer</a>, i.e., to receive INR depends on both the SEPA payment into the European account and the subsequent settlement into India.

<a></a>Which Countries Are Part of the SEPA Zone?

41 countries and territories currently fall within the SEPA geographical scope. This includes all 27 EU member states, the UK, four EFTA countries, four European microstates, and five additional countries that have joined the SEPA geographical scope in recent years.

SEPA membership does not require using the euro domestically. Countries such as Denmark, Sweden, Poland, Czech Republic, Hungary, and Switzerland retain their own currencies while participating in SEPA euro payment schemes.

India is outside SEPA. Indian bank accounts cannot receive SEPA payments directly because India is not part of the SEPA geographical scope and Indian banks do not participate in the SEPA payment schemes.

A euro-denominated SEPA payment is priced like the equivalent domestic payment for the European sender. The bigger cost difference for an Indian business appears after the euros leave the SEPA payment leg and have to be converted and settled into India.

EU rules require banks to charge the same for a cross-border euro payment as they charge for an equivalent domestic payment. That does not mean every SEPA transfer is free, but if the bank's comparable domestic transfer costs €0, the SEPA transfer should cost €0 too. With that,

Bank FX margins can add to the cost. When a conventional bank converts incoming foreign currency into INR, the exchange rate may include a markup. The exact margin varies by bank and transaction. Along with that,

Additionally, note that there is a broader cost of receiving international payments as an Indian freelancer, and you must know the nuances of <a href="https://www.skydo.com/blog/international-bank-transfer-fees-freelancers-india">international bank transfer fees </a>accordingly.

<a></a>How Long Does a SEPA Transfer Take?

Inside Europe, a SEPA payment can clear in anywhere from a few seconds to one business day. An Indian recipient, however, waits on two separate legs before the money arrives as INR.

Timing on the European side depends on which SEPA scheme carries the payment:

SEPA and SWIFT differ mainly in their coverage, currency, cost, speed, and the destinations they can serve. For an Indian business, the most important distinction is that SEPA itself cannot settle a payment directly into India, while SWIFT provides the messaging infrastructure used for international payments that can reach India.

SEPA is designed to make euro payments within its geographical area fast, standardised and similar to domestic payments. SWIFT serves a much broader purpose, providing the messaging infrastructure financial institutions use to communicate international payment instructions across

currencies and countries. <a href="https://www.skydo.com/blog/swift-money-transfer-ultimate-guide">SWIFT</a> itself does not move or settle the money.

A European client's finance team might still ask for a SWIFT or BIC code even when planning to pay through SEPA. That does not mean the payment is being sent through SWIFT. BIC can be used as a financial-institution identifier within SEPA payment messages, while the SEPA payment itself follows the relevant SEPA scheme and clearing arrangements. An IBAN is the key account identifier for a SEPA Credit Transfer, and BIC is not universally required from the payer.

Holding an IBAN is not proof of SEPA membership either. Countries outside the SEPA geographical area can use IBAN-based account numbering without participating in SEPA payment schemes.

For an Indian recipient, the distinction becomes especially important at the point where the payment leaves the SEPA environment. A SEPA payment cannot itself settle into an Indian bank account. The subsequent India leg requires a separate international settlement arrangement.

<a></a>How Can Indian Businesses Receive SEPA Transfer Payments?

Indian businesses cannot receive a SEPA transfer directly into an Indian bank account because India is outside the SEPA geographical area. Indian bank accounts use an account number and IFSC rather than an IBAN, so a European client cannot send a standard SEPA payment directly to an Indian HDFC, ICICI, or other domestic bank account.

The practical workaround is a <a href="https://www.skydo.com/blog/virtual-account-numbers">virtual EUR account</a>. Cross-border payment platforms such as Skydo provide European receiving details, including a virtual EUR IBAN. The European client sends euros to those details through SEPA, after which the platform handles conversion and settlement into the Indian bank account.

The virtual IBAN is a receiving arrangement, not a separate overseas bank account owned by the Indian business. The provider controls the underlying account structure and routes the received funds to the Indian bank account registered with the platform.

<a></a>How Skydo solves this for Indian exporters and freelancers:

<a href="https://www.skydo.com/">Skydo</a> provides a free EUR virtual account alongside USD, GBP, SGD, AUD, and CAD receiving accounts. The entire account setup is digital, with no monthly subscription fee, and hidden charges.

European clients can pay the EUR virtual account through SEPA using the account's European banking details. The subsequent settlement into India is handled separately by Skydo rather than through SEPA itself.

There are no monthly fees, so businesses pay when they transact. Settlement takes up to 1 working day after the funds reach the virtual account. Every transaction includes a free FIRA (Foreign Inward Remittance Advice) certificate, generated instantly, and automatically to provide documentation for the resulting foreign inward remittance.

<a href="https://www.skydo.com/">Skydo</a> is built for Indian businesses receiving export payments, including exporters of goods and services, freelancers, and eligible online sellers.

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