Payment Gateway Rails: How does Cross Border Checkout from UK to India Work?

Amirul Imtiaz bin Shah Rizal
Aug 8, 2022
5 minutes of read


Payment Gateway Rails: How does Cross Border Checkout from UK to India Work?

Cross-border payments happen regularly on a day-to-day basis. In 2022, the cross-border payments market is expected to reach $156 trillion USD and will continue to grow even more in the coming years. Knowing this trend, the demand for eCommerce platforms to expand to the global market is huge which increases the need to ameliorate their checkout experience for their customers in order to provide a seamless process.

Not to mention, India’s merchandise goods exports have reached $417.18 billion USD in 2021-22 with a growth of 43.18% compared to 2019-201. Other than China, India is one of the largest exporters in the world, which is no surprise that UK (United Kingdom) buyers would also look towards the South Asian economy to manufacture and export products from.

Indian exporters would in turn have a huge potential to tap into the UK market to sell their goods. In order to do so, learning about the transaction process that happens from one UK buyer to one Indian seller would be an important step towards expanding their business to the UK market. What payment methods do UK buyers prefer? How does the fund transfer process vary for each payment method? Let’s take a deep dive.

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Online Checkout - Accepting the UK Buyer’s Payment

For an online transaction to happen, a buyer has to make payment into the platform’s payment gateway using a payment method made available to them. In this case, having multiple payment options, especially localised payment methods would serve as an advantage as users would be able to choose their preferred mode of payment.

In the UK, cards are the most popular payment method with 53% of online sales being paid for by card according to JPMorgan’s study2. Though digital wallets are starting to overtake cards as there is an increasing amount of user growth, cards are still expected to continue to be the primary payment method due to its long history of use. Some most used payment card networks in UK include:

  • Visa
  • Mastercard
  • American Express
  • Discover

Following cards and digital wallets, bank transfer is another widely used payment method in the UK. Although it currently only makes up 6% of the eCommerce payments right now, it is expected to make notable gains in the years to come where its usage is predicted to grow to 12% in 2023 according to JPMorgan.

Some of the widely known banks in UK include:

  • HSBC Holdings
  • Lloyds Banking Group
  • Halifax Bank of Scotland
  • Barclays
  • Co-operative Bank
  • Metro Bank. etc.

How these payments are processed is dependent on the payment method chosen by the buyer. For instance, if a UK buyer is paying by local bank transfer, the payment will first be held by the payment provider's local bank account before the funds are transferred to the seller’s bank account in India. If the buyer uses cards or wire transfers, the funds would not be held at the local bank account but sent directly using the payment method’s payment rails, in this case, to India.

Cross-Border Payment - Sending the Payment from UK to India

Sending the payment cross-border is done when the funds are transferred from the buyer’s bank account to the seller’s bank account in another country. In this case, the UK buyer’s bank account to the Indian seller’s bank account.

The methods used to transfer funds vary from one payment option to another as such:

  • Bank Transfer: Typically done through wire transfer like SWIFT
  • Card Network: Have their own payment rail to send funds into

Each of these payment methods would have their own way of calculating their costs and surcharges, thus the platform fees can vary from one method to another. Generally speaking:

  • Bank Surcharges: Affects payment methods directly linked to the bank themselves. The surcharge amount varies bank to bank.
  • Card Surcharges: Depending on the card network, it can go as high as 4%
  • Wire Transfer Costs: Local transfers tend to be cheaper while international transfers tend to be more expensive depending on the provider.
  • FX Conversion Costs: During cross-border transactions it is inevitable that there will be costs incurred due to conversion rates.

A way for Indian merchants to hedge against FX conversion costs of their own currency is for the Indian seller to opt to receive in USD so that they can pay their international suppliers in USD. To do so, the Indian merchant has to open a multi currency account to pay their international suppliers.

While keeping these factors in mind when looking for a payment provider, some payment providers like Tazapay may have specialised local payment partners in the markets they operate in to ensure that the costs are kept low, effectively transferring the savings from the payment platform to the users.

Payout - Paying the Indian Seller

The last step of the cross-border transaction process is when the Indian seller receives the payment from the payment provider.

Ecommerce shops - whether they build their own by developing the website in-house or using tools like Shopify and or WooCommerce - can receive payouts within a few days or a week depending on the payment method the buyer has decided to use.

Meanwhile, if the payout is instead orchestrated by a marketplace or platform, the seller will only receive the funds based on the date stated in the marketplace’s or platform’s Terms & Conditions. This is easier for online platforms as they can compile all the funds within a single day of a month. Once the online platform collates all the payouts, it is then sent to the Indian seller’s local bank account.

Some major Indian banks to look out for include:

  • HDFC Bank
  • State Bank of India
  • ICICI Bank
  • Yes Bank
  • Bank of Baroda
  • Bank of India etc.

Legislative Matters - FIRA/FIRC

In order to be able to trade internationally, all Indian exporters are required to have an FIRC or FIRA to prove that they are doing business legitimately with foreign parties. This document serves as a proof of inward remittance for Indian authorities. This legislative requirement was put in place by the RBI in order to prevent money laundering and fraud from taking place within the country.

The first step to obtaining an FIRC is for an Indian exporter to request for the document from an AD1 (Authorised Dealer Category 1) bank that has processed their cross-border payment. It is also possible for payment platforms to request these documents on behalf of their users.

Once the FIRC is acquired, the cross-border checkout process is concluded.

UK to India cross-border payment in a nutshell

There you have it: the cross-border payment process from the UK to India. Hopefully you managed to grasp the importance of having a payment provider with multiple payment solutions in order to have an optimised checkout experience. Some payment solutions include having multiple payment options, seamlessly integrated checkout pages, having local partners to pass savings to you and more. Having your checkout page catered to the UK consumer not only lowers cart abandonment but also increases your margin with your business dealings.

Keeping these features in mind, why not try Tazapay? We have a global reach of over 173+ countries as well as local payment partners from over 70+ countries. Let your users enjoy a seamless checkout experience by integrating with us. Contact us to find out if we are right for you.


  1. India export trends 2021-22
  2. 2020 eCommerce Payments Trends Report, UK
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Payment Gateway Rails: How does Cross Border Checkout from UK to India Work?
Payments Resources

Payment Gateway Rails: How does Cross Border Checkout from UK to India Work?

Aug 8, 2022
5 min of read

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