What is Third-Party Payment?
A third-party payment happens when the money for your export comes from someone other than the client you invoiced. A common example is an Indian agency that serves a European subsidiary but gets paid by the group's US parent. Other examples include a client's agent, a sister company, or a platform that collects on the client's behalf.
Why it matters for exporters
The EDF has fields for this. Fields 1.15 and 1.16 ask for third-party details and the relationship between the third party and the recipient. Part 4, the exporter's declaration, includes "buyer/third party" as alternatives to strike out, so you declare who will pay. If you leave these blank and the money arrives from a different name, your bank may struggle to match the remittance to your EDPMS entry, and the credit may be held while it asks questions.
The safest approach is to agree the payer in your contract, put the payer's name on the invoice as well as the recipient's, and disclose it on the EDF from the start. Whether a particular third-party arrangement is acceptable can depend on the facts and on the current RBI text, so check with your AD bank. Read third-party payments in the EDF for details.
Example
Sterling Copy Co invoices Nordlicht GmbH in Germany EUR 5,000 for content work, but Nordlicht's Swiss parent pays all vendor bills. In field 1.15, Sterling names the Swiss parent; in field 1.16, it enters "Parent company of recipient". In Part 4 it keeps "third party" and strikes out "buyer". The EUR payment from Switzerland matches cleanly.
Common confusion
A third-party payer is not the same as an intermediary bank or a payment platform. The question is who owes and pays the money, not which bank carried it. See service recipient for who goes in Part 2B.