International Payments for Indian IT service exporters (IT/ITES) in 2025: Trends to watch

Introduction

India’s IT/ITES sector generated $194 billion in export revenue in 2023¹, with expectations for continued growth. However, international payments pose a significant challenge. Slow, costly, or insecure cross-border transactions can impact project timelines, increase operational costs, and even risk client relationships.

As global payment revenues are projected to rise from $2.4 trillion in 2023 to $3.1 trillion by 2028², innovations like instant payments and digital public infrastructure (DPI). As we look to the future of cross-border payments, the trend of localizing these transactions is transforming how businesses operate globally. This shift holds the potential to significantly reduce both the cost and time of cross-border transactions.

This article explores key trends in international payments for 2025 and offers insights on how Indian IT/ITES exporters can optimize their payment systems and stay competitive.

4 key trends shaping international payments in 2025

1. Adoption of instant payments

Instant payments are electronic fund transfers that are processed and settled in real-time or near real-time, 24/7, enabling the recipient to access the funds immediately after the transaction is initiated.

Instant payments are projected to grow from 16% of global transaction volume in 2023 to 22% by 2028³. In card-dominated markets like the US and UK, instant payments are gaining traction in bill payments, while cash-heavy markets such as Brazil and India are seeing widespread adoption across point-of-sale (POS) and bill-pay channels, often driven by government support.

Instant payments and digital wallets, projected to account for 49% of global transaction value by 2027⁴, are replacing traditional payments like cash, checks, and card transactions. This shift is driven by regulatory mandates ensuring interoperability, merchant benefits like lower costs and higher authorization rates, and consumer advantages such as enhanced fraud protection and higher transaction limits

Impact on Indian service exporters:

Faster cash flow: Indian IT exporters will benefit from receiving payments instantly, improving working capital and allowing businesses to reinvest quickly. This accelerates project execution and helps maintain operational efficiency.
Reduced payment delays: Payment delays can impact project timelines and client relationships. Instant payments eliminate this concern, ensuring projects continue smoothly without financial bottlenecks.
Enhanced client trust: Adopting instant payments helps Indian exporters build stronger, trust-based relationships by providing clients with a seamless and reliable payment experience.

2. Emergence of local-rail payment strategies

Local rail payments refer to domestic payment systems or networks designed to facilitate fast, low-cost, and secure transactions within a specific country or region. These systems often operate independently of global networks like SWIFT and are tailored to the local regulatory, economic, and consumer needs. Examples include India’s UPI (Unified Payments Interface), Europe’s SEPA (Single Euro Payments Area), and Brazil’s PIX.

Local rail payment strategies will gain prominence in 2025 as businesses seek faster, cost-effective solutions tailored to regional needs. They offer faster settlements and lower transaction costs compared to traditional systems like SWIFT, helping exporters retain more of their revenue and improve cash flow. Service exporters can also save on banking fees and exchange rate fluctuations with payment channels optimized for regional currencies and economies.

Moreover, local rail payment systems align with regional regulatory standards, enhancing security and reducing fraud risks.

Impact on Indian service exporters:

Agility in payment solutions: Local-rail payments empower Indian service exporters to adapt quickly to the diverse payment preferences of their international clients. Whether working with markets that prefer UPI, real-time banking, or more traditional methods, exporters can optimize their payment processes efficiently, enabling faster transaction processing and reducing payment delays that can otherwise hinder service delivery timelines.

Cost efficiency and profit optimization: For Indian service exporters, local-rail payment systems are a powerful cost-saving tool. With lower transaction fees, particularly in cross-border payments, service exporters can reduce reliance on costly intermediaries and foreign exchange conversions. This maximizes profit margins and gives exporters a competitive edge, enabling them to offer more competitive pricing without sacrificing profitability.

Competitive edge in the global marketplace: Local-rail payment systems provide Indian exporters a competitive edge by enabling direct, region-specific payment methods that align with local preferences and regulatory requirements. This allows exporters to operate smoothly across diverse markets without relying solely on global networks, which can be slower or more expensive. By leveraging localized systems, exporters can offer tailored solutions that resonate with clients in different regions, enhancing reliability and trust while maintaining cost efficiency.

3. Rise of Digital Public Infrastructure (DPI)

Digital Public Infrastructure (DPI) refers to the foundational digital systems and frameworks that enable efficient and inclusive delivery of essential services such as identity verification, payments, and data exchange. It facilitates interoperability across sectors, reduces costs by providing accessible digital tools to individuals and businesses to participate more actively in the economy.

As countries like India, Brazil, and Estonia have demonstrated, DPI initiatives provide the foundation for inclusive, seamless, and cost-efficient financial systems that stimulate growth and innovation. However, what will set DPI apart in 2025 is its potential to become the enabler of a broader digital ecosystem that goes beyond just payments.

With enhanced data-sharing capabilities, governments can offer smarter, more personalized services, while businesses can tap into deeper, non-traditional data sources to refine customer experiences and optimize operations. Emerging markets, driven by frameworks like India’s Aadhaar and UPI, are accelerating inclusion and enabling digital services that are more accessible and tailored to local needs. For Indian exporters, this shift simplifies cross-border transactions, reduces dependency on intermediaries, and lowers transaction costs. Additionally, faster payment processing and enhanced digital infrastructure allow exporters to expand into new markets more efficiently.

Impact of DPI on Indian service exporters

Opportunities to scale quickly: As digital public infrastructure (DPI) spreads, Indian exporters can expand into new regions with seamless digital payment systems, overcoming the typical barriers of fragmented financial systems.
Reduced reliance on traditional intermediaries: The growth of DPI reduces the need for expensive financial intermediaries. By directly utilizing digital payment solutions, Indian exporters can cut down on transaction fees and streamline their financial operations.
Democratizing access to digital tools: DPI empowers Indian exporters, regardless of size, by giving them access to advanced digital tools that were once reserved for larger enterprises. This helps level the playing field, enabling small and medium exporters to thrive in the digital economy.

4. Payment platforms and intermediaries

Fintech platforms like Xflow are changing how cross-border payments are made. These platforms offer a more flexible, user-friendly experience than traditional banks, with lower fees, quicker processing times, and competitive exchange rates. They are particularly suited for businesses needing frequent and smaller international payments.

Impact on Indian service exporters

Lower transaction fees: Traditional banking channels often have high fees for cross-border transactions. Payment platforms offer lower rates, which could lead to significant savings for Indian exporters, especially those dealing with high volumes of international transactions.
Faster payment processing: These platforms provide near-instant payment processing, reducing the delays commonly associated with traditional banking systems. Indian exporters can ensure smoother, uninterrupted project delivery by receiving payments quickly.
Improved flexibility: Payment platforms offer a variety of payment methods and currency options, giving Indian exporters the flexibility to tailor payment solutions based on client preferences, market conditions, and transaction size.

Conclusion

The international payment environment presents significant opportunities and critical challenges for Indian IT/ITES exporters. Trends such as instant payments, local rail strategies, and digital public infrastructure are reshaping the sector by offering faster, more cost-efficient solutions. These developments enable exporters to optimize operations and strengthen client relationships. However, fraud, currency volatility, and payment reconciliation risks require careful attention and management.

Xflow addresses these by integrating various payment methods, ensuring real-time synchronization, and providing full transparency. This helps Indian exporters streamline cross-border transactions, reduce costs, improve efficiency, and build stronger client relationships for long-term success.

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