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Stripe, PayPal or Razorpay: What FEMA and GST Rules Mean for a Startup's First Foreign Customer

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Editorial team, serviceexportguide.com
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Short answer

A startup's first foreign customer triggers the FEMA (Export and Import of Goods and Services) Regulations, 2026, in force from 1 October 2026.1 The invoice must be realised within nine months.2 Razorpay is an RBI-authorised PA-CB, while PayPal holds in-principle authorisation and Stripe offers cross-border services by invite.6745 A registered startup exports under an LUT without IGST.15

Applies toRules involvedPlatforms comparedLast verified
Indian startups invoicing their first customer outside India12FEMA Export and Import Regulations, 2026; RBI PA Master Direction; IGST Act sections 2(6) and 16; CGST rule 96A15121314Razorpay, Karbon Business, Skydo, PayPal, Stripe242932354031 October 2026

1,000 USD = ₹94,243 at the reference rate for 13 November 2026 (European Central Bank data).

Estimated rupees received, on published fees

Sorted by estimated rupees received, highest first. Only providers that publish both their fee and their conversion markup for this currency and method can be estimated.

#Provider and routeBest forFee (+GST)MarkupYou receiveCost
1Karbon BusinessLowest estimated costBank transfer to a Karbon virtual USD accountUS bank transfers and marketplace payouts₹942plus GST, rate not stated0%₹93,131 to ₹93,3011.00 to 1.18%
2RazorpayMoneySaver Export Account: bank transfer to virtual account details (Standard plan)Local transfers from the US, UK and eurozone₹1,000plus GST, rate not stated0%₹93,063 to ₹93,2431.06 to 1.25%
3WinvestaGlobal Collections Account, standard plan (up to 2,000 a month per currency)Local transfers with a published per-payment fee₹1,4350%₹92,8091.52%
4SkydoPayment link (InstaLinks) paid by ACH debitLocal bank transfers from major markets₹1,885plus GST, rate not stated0%₹92,019 to ₹92,3582.00 to 2.36%
5PayoneerLocal bank transfer to Payoneer receiving account detailsMarketplace payouts such as Amazon or Upwork₹0no GST stated1 to 4%₹90,473 to ₹93,3011.00 to 4.00%
6PayPalInternational commercial transaction received into a PayPal account (PayPal checkout or invoice)Clients paying by card or PayPal balance₹4,175no GST stated3 to 4%₹86,465 to ₹87,3667.30 to 8.25%

Not estimated because pricing is not fully published: Cashfree Payments, Dodo Payments, PingPong, Stripe, Tazapay, TransFi, Wise.

Where a provider says GST applies to its fee but not at what rate, the range runs from no GST to 18%, the rate Skydo, Stripe and Winvesta state on their pages. Estimates use each provider's published fee, conversion markup, GST on fees and FIRA charge, checked 2026-10-28, against the reference rate. They exclude charges taken by intermediary banks and your own bank, and the rate a provider actually applies at the time of conversion. Check the provider's pricing page before you choose. The order is calculated only from these published numbers; no provider can pay to change its position, and there are no affiliate links.

A Bengaluru developer-tools startup signing its first customer in Austin, or a Delhi analytics startup landing a pilot with a Singapore retailer, crosses into export rules the moment it raises a foreign invoice. Stripe, PayPal and Razorpay are the gateways most founders look at first, and each sits differently under RBI's payment aggregator rules.6745

This page compares them with the lowest-cost providers on published fees and lists the FEMA and GST rules that apply from the first invoice. The wider guide is international payments for startups. Confirm your structure with a chartered accountant (CA).

How do Stripe, PayPal and Razorpay compare for a startup's first foreign customer?

Stripe, PayPal and Razorpay differ in RBI status and fees: Razorpay is an authorised PA-CB charging up to 3% on international cards, Stripe is an authorised online aggregator charging 3% to 4.3% on cards issued abroad, and PayPal charges 4.40% plus a fixed fee.6253540 Razorpay, Karbon Business and Skydo are the three lowest-cost providers for a $2,000 USD receipt on published fees.243032

The table is sorted by estimated cost on a $2,000 USD receipt, cheapest first; Stripe follows because its cost depends on the card and currency.40

PlatformBest forFeeFX markupSettlementFIRARBI PA-CB statusSource
RazorpayLocal transfers from the US, UK and eurozoneMoneySaver bank transfer 1%, flat ₹1,000 below ₹1,00,000; GST applies0% on MoneySaver transfersT+1 for push bank transfersFIRS emailed within 24 hours of settlementAuthorised PA-CB, inward and outward62426
Karbon BusinessUS bank transfers and marketplace payouts1% transaction fee listed on its PayPal comparison page0% (freelancer page); 0.5% to 1.0% (PayPal alternative page)24 to 48 hoursFIRA for every transaction from an unnamed partner bankNot on the RBI list itself; its terms run export receipts under a partner the RBI lists as a PA-CB6293031
SkydoLocal bank transfers from major marketsUSD 19 + GST up to USD 2,000; USD 29 + GST to USD 10,000; 0.3% + GST above0% markup on the mid-market rate (product page); retail rate set by Skydo or its partner banks (terms)Within 24 hours (product page); T+1 to T+3 business days (terms)Free FIRA on every paymentAuthorised PA-CB, inward and outward, 8 January 2026632333447
PayPalClients paying by card or PayPal balance4.40% plus a fixed fee, for example 0.30 USD3.0% or 4.00% above the base rateUp to 5 business days to the bankFree weekly digital FIRA from February 2026In-principle authorisation as an existing PA-CB; not on RBI's authorised list of 16 October 2026735363738
StripeCard checkout and subscriptions3% for Visa or Mastercard issued abroad; 3.5% for American Express; 4.3% for non-INR presentmentAdditional 2% if conversion is requiredDaily payouts include international card payments made five business days earlierStandard Chartered emails a payment advice; request the FIRC from your own bankAuthorised PA-Online, not PA-CB; cross-border services invite-only64043444546

Razorpay's international card route costs up to 3% plus 18% GST and settles on about T+7 working days, separate from the MoneySaver bank transfer route in the table.2527 A first enterprise customer usually pays by bank transfer, while a self-serve product needs card checkout.2641

Which RBI and GST rules apply to a startup's first foreign customer?

A startup's first foreign customer brings in the FEMA (Export and Import of Goods and Services) Regulations, 2026 (the 2026 Regulations) for the money and the IGST Act for GST.112

RuleBest for (who it applies to)Plain meaningSource
2026 Regulations, regulation 5Every startup exporting servicesRealise the invoice within nine months; twelve months if invoiced in rupees12
2026 Regulations, regulations 3 and 4Every startup from 1 October 2026File an EDF with the AD bank within 30 days from the end of the invoice month1
2026 Regulations, regulation 13Startups with long-overdue invoicesProceeds unrealised more than one year after the due date restrict further exports to full advance or irrevocable LC1
PA Master Direction, paragraph 11(d)Startups paid through a PA-CB₹25 lakh maximum per transaction5
IGST Act section 2(6)Every foreign invoiceFive conditions make the supply an export; a startup billing its own foreign branch fails condition (v)1220
Notification No. 10/2017-Integrated TaxStartups below ₹20 lakh turnoverExempt from registration for inter-State taxable services up to ₹20 lakh18
IGST Act section 16 and FORM GST RFD-11Registered startupsExports are zero-rated; an LUT allows invoices without IGST1315
CGST rule 96A(1)(b)Startups exporting under an LUTIGST with interest is due if payment is not received within one year of invoice or the FEMA period, whichever is later14

A startup with a US parent company and an Indian subsidiary billing that parent should read CBIC Circular No. 161/17/2021-GST, which says a subsidiary is not merely an establishment of a distinct person.20

Which purpose code applies to a startup?

A startup's purpose code depends on what it sells: P0802 for software, P1006 for consulting and P1008 for research and development work.910 RBI introduced the receipt codes through Circular No. 84 of 29 February 2012.8

CodeBest for (transaction type)Official RBI descriptionSource
P0802Software products, SaaS and implementationSoftware consultancy/implementation (other than those covered in SOFTEX form)910
P0807Software delivered online from IndiaOff-site Software Exports910
P1006Advisory and go-to-market servicesBusiness and management consultancy and public relations services910
P1008Contract research and product developmentResearch & Development services910

Stripe allows one purpose code per account from a fixed list, PayPal asks for one at set-up, and Razorpay applies one code to all international transactions.283941

Which option is cheapest for a startup at $500, $2,000 and $5,000?

On published fees, bank transfer routes cost a startup the least at $2,000 and $5,000, and PayPal costs the most among providers with full published pricing.243235 The table below calculates rupees received at today's rate.

PlatformBest forINR on USD 2,000INR on USD 5,000INR on USD 10,000Cost on USD 5,000
SkydoMost INRTransfer to Skydo local account details or international SWIFT accountLocal bank transfers from major markets₹1,86,373₹4,67,991₹9,39,2060.68%
Karbon BusinessBank transfer to a Karbon virtual USD accountUS bank transfers and marketplace payouts₹1,86,262 to ₹1,86,601₹4,65,655 to ₹4,66,503₹9,31,311 to ₹9,33,0071.00 to 1.18%
RazorpayMoneySaver Export Account: bank transfer to virtual account details (Standard plan)Local transfers from the US, UK and eurozone₹1,86,262 to ₹1,86,601₹4,65,655 to ₹4,66,503₹9,31,311 to ₹9,33,0071.00 to 1.18%
PayPalInternational commercial transaction received into a PayPal account (PayPal checkout or invoice)Clients paying by card or PayPal balance₹1,72,958 to ₹1,74,760₹4,32,436 to ₹4,36,940₹8,64,899 to ₹8,73,9087.27 to 8.23%

Not estimated because pricing for USD is not fully published: Stripe.

Ranked by INR received on USD 5,000. Reference rate: European Central Bank data for 13 November 2026. Fees, conversion markup, GST on fees and FIRA charges as published by each provider, checked 28 October 2026. Ranges appear where a provider publishes a range or does not state its GST rate. Intermediary bank charges are excluded. See the methodology.

For example, Skydo's USD 29 fee is 0.58% of a $5,000 invoice before GST, and its USD 19 fee is 3.8% of a $500 invoice.32 PayPal's 4.40% plus 0.30 USD is 4.46% of a $500 payment before its 3.0% or 4.00% conversion spread.35

A first pilot invoice is often small, so flat fees weigh more on it than on later contracts.

What documents follow a startup's first foreign payment?

A startup's first foreign payment should leave a FIRA, FIRS or payment advice, an EDF, an e-BRC and an invoice under the LUT.11115263744

DocumentBest forWho issues it and whenSource
FIRA, FIRS or payment adviceProof of the foreign creditRazorpay FIRS within 24 hours of settlement; PayPal weekly FIRA; Stripe's bank sends a payment advice263744
EDFEvery invoice from 1 October 2026Filed by the startup with the AD bank1
e-BRCGST refund recordsSelf-generated on the DGFT portal from the bank's inward remittance message11
LUTRegistered startups invoicing without IGSTFORM GST RFD-11 for each financial year1516

See EDF for service exporters and GST registration for exporters.

What changes in 2026 for a startup's first foreign customer?

A startup signing its first foreign customer in late 2026 works under the 2026 Regulations from 1 October 2026, with an EDF for every service invoice and nine-month realisation.12

  • New regulations: The 2026 Regulations replaced the 2015 export regulations.14
  • SOFTEX: RBI Circular No. 20 supersedes the SOFTEX circulars from 1 October 2026, so software startups use the EDF.3
  • Income tax: The Income-tax Act, 2025 applies from 1 April 2026, and tax year 2026-27 runs to 31 March 2027.23
  • Stripe: Stripe says it withdrew its PA-CB application on RBI guidance and serves Indian cross-border businesses by invite.45
  • GST Council: The 57th meeting on 8 October 2026 recommended omitting condition (v) of section 2(6), which is not yet law.21

Recheck these rules before each financial year, when the LUT is renewed.15

How did we verify this?

We checked this page against the sources below on 31 October 2026. Provider fees, conversion markups and RBI payment aggregator (PA-CB) status were checked on 28 October 2026. Rupee amounts use European Central Bank reference rates for 13 November 2026. Read our methodology or report an error.

  1. [1]RBI: Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026, FEMA 23(R)/2026-RB, amended up to 22 September 2026, regulations 2, 3, 4, 5 and 19
  2. [2]RBI: Notification FEMA 23(R)/(1)/2026-RB dated 22 September 2026, amending regulation 5 (realisation period)
  3. [3]RBI: A.P. (DIR Series) Circular No. 20 dated 16 January 2026 (supersedes the SOFTEX circulars from 1 October 2026)
  4. [4]RBI: Press release on the FEMA (Export and Import of Goods and Services) Regulations, 2026 and Directions, 16 January 2026
  5. [5]RBI: Master Direction on Regulation of Payment Aggregator, 15 September 2025, paragraphs 11(d), 11(h) and 19 (checked 2026-10-31)
  6. [6]RBI: Certificates of Authorisation issued under the Payment and Settlement Systems Act, 2007, Payment Aggregators list dated 16 October 2026 (checked 2026-10-28)
  7. [7]RBI: Status of Applications received under the Payment and Settlement Systems Act, 2007, as on 16.10.2026 (checked 2026-10-28)
  8. [8]RBI: A.P. (DIR Series) Circular No. 84 dated 29 February 2012, Compilation of R-Returns: Reporting under FETERS (revised purpose codes)
  9. [9]HDFC Bank: Inward Remittance Purpose Codes (bank reproduction of the RBI list, checked 2026-10-28)
  10. [10]DGFT: Purpose Code and SAC Code Mapping, Version 1.0, 10 November 2023 (reproduces RBI receipt code descriptions)
  11. [11]DGFT: eBRC system, self-certification of eBRC from bank inward remittance messages (IRMs), Trade Notice 33/2023-24 dated 10 November 2023
  12. [12]CBIC: IGST Act, 2017, section 2(6) (export of services)
  13. [13]CBIC: IGST Act, 2017, section 16 (zero-rated supply)
  14. [14]CBIC: CGST Rules, 2017, rule 96A (export under bond or Letter of Undertaking), clause (1)(b) as substituted by Notification No. 12/2024-Central Tax, 10 July 2024
  15. [15]GST portal user guide: Furnishing of Letter of Undertaking (FORM GST RFD-11)
  16. [16]CBIC: Circular No. 40/14/2018-GST (LUT deemed accepted on acknowledgement)
  17. [17]CBIC: CGST Rules, 2017, rule 46 (tax invoice, export endorsement)
  18. [18]Notification No. 10/2017-Integrated Tax (exemption from registration for inter-State suppliers of taxable services), GSTZen reproduction
  19. [19]CBIC: CGST Act, 2017, section 2(6) (aggregate turnover includes exports)
  20. [20]CBIC: Circular No. 161/17/2021-GST (establishments of a distinct person)
  21. [21]GST Council: Press release, 57th meeting, 8 October 2026
  22. [22]GST Council: Notification No. 10/2023-Central Tax (e-invoicing above ₹5 crore from 1 August 2023)
  23. [23]PIB: Income-tax Act, 2025 comes into force from 1 April 2026
  24. [24]Razorpay, Multi-Currency Account for International Bank Transfers (MoneySaver Export Account pricing) (checked 2026-10-28)
  25. [25]Razorpay, Pricing, International Payments and International Bank Transfers tabs (checked 2026-10-28)
  26. [26]Razorpay Docs, International Bank Transfer (MoneySaver Export Account) (checked 2026-10-28)
  27. [27]Razorpay Docs, International Payments FAQs (checked 2026-10-28)
  28. [28]Razorpay Docs, About Purpose Codes (checked 2026-10-28)
  29. [29]Karbon Business, Karbon for Freelancers (checked 2026-10-28)
  30. [30]Karbon Business, PayPal Alternative comparison page (checked 2026-10-28)
  31. [31]Karbon Forex Terms and Conditions, Interropac Private Limited (checked 2026-10-28)
  32. [32]Skydo FAQs, How much does Skydo charge? (checked 2026-10-28)
  33. [33]Skydo FAQs, What countries can I get paid locally through Skydo? (checked 2026-10-28)
  34. [34]Skydo, Receive international payments as a freelancer in India (product page) (checked 2026-10-28)
  35. [35]PayPal India, PayPal Merchant Fees (page last updated 28 March 2024) (checked 2026-10-28)
  36. [36]PayPal India, User Agreement for PayPal Services (last updated 13 January 2025) (checked 2026-10-28)
  37. [37]PayPal India, Foreign Inward Remittance Advise (FIRA) (checked 2026-10-28)
  38. [38]PayPal India Help, How do I transfer funds to my bank account? (checked 2026-10-28)
  39. [39]PayPal India Help, What is the Purpose Code? (checked 2026-10-28)
  40. [40]Stripe India, Pricing (checked 2026-10-28)
  41. [41]Stripe Docs, Accept international payments from India (checked 2026-10-28)
  42. [42]Stripe Support, Accepting international payments from Stripe accounts in India (checked 2026-10-28)
  43. [43]Stripe Support, Payout schedule for Stripe accounts in India (checked 2026-10-28)
  44. [44]Stripe Support, FIRC/payment advice for international transactions in India (checked 2026-10-28)
  45. [45]Stripe Support, Cross-border payment services in India (checked 2026-10-28)
  46. [46]Stripe Support, Additional pricing information for Indian cross-border sellers (checked 2026-10-28)
  47. [47]Skydo, Terms of Use, last updated 9 April 2026 (checked 2026-10-28)

Frequently asked questions

Does a startup need RBI permission to receive its first foreign payment?+

A startup does not need separate RBI permission to receive payment for services exported abroad. It receives the money through its authorised dealer bank, directly or via a payment aggregator, and follows the FEMA 2026 Regulations, which require an EDF and realisation within nine months of the invoice.12

Can a startup accept international payments on Stripe in India without a company?+

Stripe opens international payments in India to sole proprietorships, LLPs and companies, so a startup does not need to be a company. Individuals can use Stripe India only for domestic payments, and Stripe does not support simple partnerships, non-profits or NGOs. Indian businesses must request an invite.4142

Does a startup need GST registration before billing a foreign client?+

A startup making only inter-State supplies of taxable services is exempt from GST registration up to ₹20 lakh of aggregate turnover, and export turnover counts toward that figure. An LUT, which lets the startup invoice without IGST, is filed by a registered person, so many startups register early.151819

Can a US customer pay an Indian startup by card through PayPal?+

A US customer can pay an Indian startup by credit or debit card through PayPal. PayPal's India fee page lists one rate for receiving international commercial transactions, 4.40% plus a fixed fee such as 0.30 USD, and does not list a separate card rate.3536

What is the maximum a startup can receive per payment through PayPal?+

PayPal's India user agreement lists receiving more than USD 10,000 per transaction for a product or service through its export payment services as a restricted activity. RBI separately caps each cross-border payment aggregator transaction at ₹25 lakh, so larger first contracts usually go by bank wire.536

Does a startup need e-invoicing for export invoices?+

A startup needs GST e-invoicing only once its aggregate turnover exceeds ₹5 crore, the threshold in force from 1 August 2023 under Notification No. 10/2023-Central Tax. Below that, it issues a normal tax invoice with the export endorsement required by rule 46 of the CGST Rules.1722

What if the first foreign customer pays after nine months?+

If a foreign customer pays after nine months from the invoice date, the startup asks its AD bank to extend the realisation period under regulation 5 of the FEMA 2026 Regulations. If proceeds stay unrealised more than one year after the due date, further exports are allowed only against full advance or an irrevocable letter of credit.1

This page is general information for Indian service exporters, not tax or legal advice. Rules change and outcomes depend on your facts, so confirm with a chartered accountant before acting.

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What is the EDF and how do service exporters file it from October 2026?

From 1 October 2026 every Indian service exporter files an Export Declaration Form (EDF). Who files, the 30-day deadline, where it goes and examples by profession.