Glossary
Each entry gives the direct answer first, then the explanation and an example. Written for people trying to work out where their money went.
Because most of the cost hides in it. A quoted transfer fee can look small while an FX spread quietly takes more, and a payment described as settled may only have left the sender. Knowing which word means what is how the real cost becomes visible.
A fee is stated. A spread is the gap between the rate you are given and the real market rate, and it is not usually itemised anywhere. Two providers quoting the same fee can differ substantially once the spread is counted.
When the money is in the recipient's account and available, not when the sender's system says sent. Those are different moments, and on a correspondent-bank route they can be several business days apart.
Know Your Business: the checks a payment provider runs on a company before it can transact.
KYB verifies that a business exists, who owns and controls it, and that it is not on a sanctions or watch list. It covers registration documents, ownership structure and the identities of directors or beneficial owners. It is the company-level equivalent of KYC.
Example. Before a company can collect payments through Kollect, KYB confirms the registered entity and its beneficial owners.
Know Your Customer: identity verification for an individual.
KYC confirms that a person is who they claim to be, using government identity documents and, usually, proof of address. Regulated payment businesses are required to run it before providing services.
Example. A freelancer onboarding to receive payments completes KYC with an ID document and a selfie check.
A US dollar stablecoin: one token is intended to be worth one US dollar.
USDC is issued by a regulated company that holds reserves against the tokens in circulation, so its value tracks the dollar rather than floating like other crypto assets. It moves on public blockchains, which is why it can be sent between parties in seconds.
Example. A US client pays a $10,000 invoice in USDC from their wallet; the amount received on-chain is 10,000 USDC.
Another US dollar stablecoin, issued by Tether.
USDT serves the same function as USDC, a token intended to hold a one-dollar value, but with a different issuer and reserve arrangement. It is widely held, so many international payers already have it.
Example. A customer who holds USDT rather than USDC can pay the same Kollect payment link with it.
The moment money actually reaches the recipient's account and is theirs to use.
A payment can be authorised, cleared and still not settled. Settlement is the final leg: funds arrive in the destination account and are available. Cross-border payments are slow mainly because settlement waits on intermediaries, not because the instruction takes time to send.
Example. With Kollect, settlement is complete when EUR, USD or SGD lands in your bank account. Licensed partners handle that leg, and timing depends on the partner rather than a published SLA.
The infrastructure a payment travels along to reach its destination.
A rail is the route and the rules: correspondent banking for SWIFT wires, domestic schemes for local transfers, a blockchain for stablecoin transfers. Each rail has its own cost, speed and failure modes, and the choice of rail is usually what determines how fast money arrives.
Example. Kollect uses a stablecoin rail for the international leg and licensed local payout rails for the final settlement.
Exchanging one currency for another, at a rate that includes the provider's margin.
FX cost is rarely a single visible fee. The provider quotes a rate slightly worse than the market rate, and the difference, known as the spread, is the cost. This is why a payment can arrive short even when the stated transfer fee looks small.
Example. A wire quoted at a $30 fee can cost far more once a 2% spread is applied to the converted amount.
The messaging network banks use to instruct each other to move money across borders.
SWIFT carries payment instructions, not the money itself. The funds travel through a chain of correspondent banks, each of which may charge a fee or deduct from the amount. That chain is the source of both the delay and the unpredictable deductions.
Example. A wire from a US bank to a Singapore bank may pass through one or two correspondent banks before arriving.
Foreign Inward Remittance Advice: a bank document evidencing an inbound foreign payment.
In India, a FIRA (or FIRC) is issued by the receiving bank as proof that funds came from abroad and for what purpose. Exporters and service providers use it for regulatory filings, tax and audit purposes.
Example. An exporter keeps the FIRA for each inbound payment as documentary evidence of export earnings.
India's Foreign Exchange Management Act, the law governing cross-border currency flows.
FEMA sets out how residents may receive, hold and remit foreign currency, and what must be reported. Businesses collecting international payments into India operate within its rules and their bank's associated documentation requirements.
Example. How an inbound payment is classified and documented for FEMA purposes affects what the receiving bank asks for.
Any payment where the payer and payee are in different countries or currencies.
It differs from a domestic payment in that at least one currency conversion and one cross-border transfer of value has to happen, usually involving more than one regulated institution. Every added institution is a place where cost, delay or a compliance check can enter.
Example. A US client paying an invoice issued by a company in Singapore is making an international payment.
The layer that accepts a payment and passes it to the systems that move the money.
A gateway handles the payer-facing part: presenting the amount, capturing the payment method, authorising and confirming. Settlement to the merchant's account happens behind it, on whatever rail the provider uses.
Example. A checkout page is a gateway; the payout that reaches the merchant's bank days later is the settlement behind it.