How to pay overseas suppliers safely and cheaply

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If you import goods, buy services from abroad or work with manufacturers in other countries, you need to pay overseas suppliers in a way that is safe, affordable and on time. Bank wires are familiar but can be expensive and slow, exchange rates hide costs, and payment fraud targets international payments in particular. This guide compares payment methods, explains how to cut costs, covers payment terms and protection, and shows how to avoid the scams that cost businesses most.

The main ways to pay

• Bank wire (SWIFT): widely accepted, but fees can be high, intermediary banks may deduct charges, and exchange rates often include a margin.
• Multi-currency account or money transfer provider: converts at transparent rates and sends locally in the supplier's country where possible, often cheaper and faster.
• Business card: convenient for small purchases and online suppliers, with foreign transaction fees and card limits.
• Trade platforms: some sourcing marketplaces have built-in payment and buyer protection.
• Letters of credit: bank-guaranteed payment for larger trade deals, more complex and costly.

Bank wires: when they make sense

Wires are often required by large manufacturers and for big payments. They are traceable and familiar to suppliers worldwide. To reduce cost, ask your bank about its foreign exchange rate compared with the mid-market rate, choose who pays charges (the "OUR", "SHA" or "BEN" options on the wire), and confirm the supplier's bank details carefully. Intermediary deductions can mean the supplier receives less than the invoice, so agree in advance who covers fees.

Multi-currency accounts and transfer providers

Fintech providers can send payments in many currencies, often by local transfer in the supplier's country, at a transparent conversion fee on or near the mid-market rate. They are usually cheaper and faster than bank wires for small and medium payments. Some let you hold balances in several currencies, so you can buy currency when rates are favourable.

Compare options in the business accounts ranking and see what a multi-currency business account is. Current entry prices: Wise Business From USD 31 one-time, Airwallex Free plan, then USD 12 per user per month + platform fee, Revolut Business From GBP 10 per month (≈ USD 13.23). Comparisons: Wise Business vs Airwallex and Wise Business vs Revolut Business.

Business cards

Cards are convenient for software, online marketplaces and small orders. Some business cards and expense platforms offer lower foreign transaction fees or multi-currency spending. Cards also offer chargeback rights in some cases, a form of protection if goods do not arrive. For larger amounts, card limits and fees make transfers more sensible. See the expense cards ranking and Brex vs Ramp.

Understanding the true cost

The cost of an international payment includes the sending fee, any intermediary and receiving fees, and the exchange rate margin. Banks often advertise low fees but use rates several percent from the mid-market rate. To compare, check how much the supplier will receive in their currency for the same amount from each option at the same moment. Our international payment calculator helps, and how to cut international payment fees explains more ways to save.

Paying in which currency?

Suppliers often quote in their own currency or in US dollars. Paying in the supplier's currency gives them certainty and may get you a better price, while you take the exchange rate risk. Paying in dollars may be simpler if you hold dollars, but the supplier may build a currency margin into the price. Ask for quotes in both and compare. For regular purchases, holding a balance in the supplier's currency smooths out rate movements.

Managing exchange rate risk

When you agree a price in a foreign currency but pay weeks later, the exchange rate can move against you. Options include paying sooner, converting currency when you place the order and holding it, using forward contracts offered by some providers to fix a rate for a future date, or agreeing prices in your own currency. For small businesses, converting at order time and holding the balance is often the simplest approach.

Payment terms with suppliers

Common terms in international trade include full prepayment (common with new suppliers), a deposit with balance before shipment, a deposit with balance against shipping documents, and open account terms, such as payment 30 days after delivery, for established relationships. Negotiate better terms as trust grows. Balance supplier terms against your own customer terms; our cash runway calculator helps you see the effect on cash.

Protecting yourself before paying

• Verify the supplier: business registration, references, reviews, and a video call or visit for large orders.
• Start with a small order before committing large amounts.
• Use a written purchase agreement with specifications, quality standards, delivery terms and what happens if goods are faulty.
• Consider third-party inspection before the balance payment.
• Use platforms with buyer protection or escrow for new relationships.
• For larger trade, consider letters of credit or trade insurance.

Avoiding payment fraud

The most common and costly scam is payment redirection, also called business email compromise: a fraudster impersonates your supplier, often by hacking their email or using a lookalike address, and sends "updated bank details" for the next payment. Once paid, the money is very hard to recover.

Protect yourself by never changing supplier bank details based on email alone, verifying any change by calling the supplier on a number you already have, requiring two people to approve new payees, and being suspicious of urgency. See how to prevent invoice fraud for a full checklist, and use two-factor authentication on email and payment accounts.

Paying service providers and freelancers abroad

For services such as design, development or virtual assistance, payments are usually smaller and more frequent. Multi-currency accounts and contractor payment platforms work well. For ongoing contractors, use a written agreement and consider a contractor platform that handles contracts and compliance documents. See how to pay international contractors and the contractor payroll ranking.

Customs, duties and import VAT

When importing goods, the payment to the supplier is only part of the cost. Customs duties, import VAT or GST, brokerage fees and shipping costs apply at the border. Agree the delivery terms (Incoterms) with the supplier, such as who pays shipping and duties. Keep commercial invoices, packing lists and proof of payment for customs declarations. Registered businesses can often reclaim import VAT; see VAT for small businesses in Africa and GST in Australia for examples.

Foreign exchange rules

Some countries regulate outward foreign currency payments. Businesses may need to provide invoices, import documents or tax clearance to their bank, use specific channels, or observe limits. Check your country's rules before committing to international purchases, and allow time for documentation. Your bank or provider can explain requirements.

Record keeping and accounting

Record each payment with the invoice, the amount in both currencies, the exchange rate and all fees. Fees and exchange differences are business costs. Connect your payment account to accounting software to reduce manual entry. Keep records for customs and tax for the periods your country requires.

A practical setup for small importers

1. Open a multi-currency account for regular supplier payments.
2. Keep a bank wire option for suppliers who require it.
3. Agree currency, terms and fees in a written purchase agreement.
4. Verify bank details by phone and require dual approval for new payees.
5. Convert currency at order time for large orders.
6. Record payments, fees and rates in your accounting software.

Common mistakes

• Paying by bank wire at poor exchange rates without comparing.
• Changing bank details on email instructions alone.
• Paying in full upfront to unverified suppliers.
• Ignoring who pays wire fees, so suppliers receive less than invoiced.
• Forgetting duties and import VAT in cost calculations.
• Not keeping documents needed for customs and foreign exchange rules.

Example: a small retailer importing from Asia

A homeware retailer in Nairobi buys stock from a manufacturer in China twice a year. The supplier quotes in US dollars and asks for 30% deposit and 70% before shipment. The retailer used to pay through its bank by SWIFT wire, losing money on a poor conversion rate from shillings to dollars and on wire fees. It now buys dollars through a provider with transparent rates when it places each order and holds them until the balance is due, which protects it from rate movements between deposit and balance.

Before paying the balance, it hires an inspection company to check a sample of goods, and it verifies the supplier's bank details by video call whenever a payment is due. It records each payment with the exchange rate and fees, and keeps the commercial invoice and shipping documents for customs.

Example: a software company paying vendors abroad

A small software company in South Africa pays for cloud hosting, software subscriptions and freelance developers in several countries. Subscriptions are paid by a business card with a multi-currency balance; developers are paid monthly through a contractor platform; one larger vendor that requires a wire is paid through the bank. The company reviews its international payment costs annually and has moved most payments away from wires, which cut its costs noticeably. For hosting choices, see the cloud hosting ranking.

Batch and scheduled payments

If you pay many suppliers or contractors abroad, batch payment features let you upload a file or select several payees and send all payments at once, with one approval. Scheduled payments let you set future dates for recurring payments. Both save time and reduce errors. Combine them with approval rules, such as requiring a second person to approve batches above a set amount, so speed does not come at the expense of control.

When things go wrong

If a payment is sent to the wrong account or a supplier says they have not received it, act quickly. Contact your provider or bank immediately to request a recall or trace, provide all details, and report fraud to the authorities if relevant. Recovery is more likely the sooner you act. Keep the supplier informed, and check whether intermediary deductions explain a shortfall before assuming fraud.

Building good supplier relationships

Reliable payment builds trust, and trust gets you better terms. Pay on time, communicate early if a payment will be late, and confirm receipt with the supplier. Over time, suppliers may offer smaller deposits, longer payment terms or priority production. Keep a simple record of each supplier's preferred currency, payment method, verified bank details and contact for payment queries, so payments run smoothly even when different staff handle them.

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