Making international business payments should be straightforward – but in practice, businesses face a range of challenges when optimising cross-border transactions. Which payment method is right for your transaction size and destination? How long do different types of international payments take to settle? What about exchange rates, compliance, and hidden fees?
This guide covers the fundamentals of international business payments: how they work, the main payment methods available, what they cost, how to manage currency risk, and what regulatory requirements apply.
Table of Contents
Quick answer: What are international business payments?
An international payment is a financial transaction between two or more bank accounts in different countries. For businesses, international payments include purchasing goods and services from overseas suppliers, paying international employees or contractors, settling cross-border invoices, issuing card payouts to customers in other countries, and transferring funds between subsidiaries in different markets.
Without international payments, global trade and commerce would be impossible. But because these transactions typically involve different currencies and banking systems, they require foreign exchange and often the involvement of intermediary financial institutions – which adds complexity and cost compared to domestic transfers.
Types of international business payments
International payments are broadly categorised into wholesale payments and retail payments. Both types of payments are essential for businesses operating internationally, each catering to different transaction scales and needs.
Wholesale payments
Wholesale payments refer to large-scale enterprise or merchant transactions designed for high-value cross-border money transfers. They are essential for businesses involved in global trade, supply chain management, or large corporate dealings – multinational corporations, import/export companies, and financial institutions managing liquidity across markets.
A real-world example: a car manufacturer in Germany paying a supplier in Japan for a large shipment of automotive parts. These transactions often involve significant foreign exchange requirements and demand robust security and compliance with international regulations.
Retail payments
Retail payments are smaller, individual transactions — typically between a business and a consumer (B2C). These are common in e-commerce and retail, where customers make international purchases. A customer buying from an overseas online retailer or paying for a subscription service in another currency is completing a retail international payment.
Retail payments are processed through payment gateways, card acquiring systems, digital wallets, or bank transfers – often automatically and within seconds.
How do international business payments work?
For cross-border payments, international bank transfers utilise systems like SWIFT and SEPA. The former system facilitates global transactions across 200+ countries by enabling secure messaging between banks. However, SWIFT payments usually take more time to be processed (1-5 business days) and have higher fees because of their complexity.
The latter system, on the other hand, is designed to streamline euro-denominated transfers across 36 European countries. It offers, among other things, faster and cheaper transactions, often with only minimal or no fees. This makes SEPA particularly well-suited to businesses operating within the eurozone.
While bank transfers via SWIFT and SEPA are generally reliable and used widely, potential delays can still occur due to factors like fraud prevention measures, bank holidays, and currency exchange processes. In terms of fees, they can be somewhat unpredictable – particularly with SWIFT – because of additional charges from intermediary banks.
International payment methods for businesses
Choosing the right payment method for international business payments depends on the transaction size, the currencies involved, the destination country, and the speed required.
SWIFT wire transfers
SWIFT (Society for Worldwide Interbank Financial Telecommunication) is the most widely used network for international wire transfers, facilitating global transactions across 200+ countries through secure messaging between banks.
SWIFT international wire transfers are reliable and accepted virtually everywhere, but they come with trade-offs:
- Processing time: 1–5 business days depending on the route and number of intermediaries
- Costs: transfer fees, intermediary bank charges (typically $15–$50 per intermediary), and exchange rate markups of 2–4% applied by banks
- Businesses can pay $10–$50 more per transaction for international payments via SWIFT compared to domestic transfers — costs that compound significantly at volume
SWIFT is best suited to high-value international business payments where speed is not the primary concern and where no regional alternative (like SEPA) is available.
SEPA transfers
SEPA (Single Euro Payments Area) is the most efficient payment method for euro-denominated business international payments within Europe. Covering 41 countries, SEPA allows businesses to send international payments in euros with the same speed and cost as domestic transfers.
SEPA Instant Credit Transfers complete within seconds, 24/7. Standard SEPA Credit Transfers settle within one business day. For businesses operating in the eurozone or making regular payments to European partners, SEPA is almost always the better option over SWIFT — faster, cheaper, and with fully predictable fee structures.
International ACH transfers
International ACH (Automated Clearing House) transfers are typically cheaper than SWIFT wire transfers, costing between $3–$10 per transfer. However, they are slower and have more limited geographic coverage. ACH is commonly used for lower-value, recurring international payments where speed is less critical.
Digital payment platforms
Platforms such as PayPal and Wise provide alternatives to traditional bank transfers for international business payments, often offering better exchange rates and faster processing times. These are particularly suitable for businesses that need flexibility and are making international payments to individuals or smaller businesses.
Multi-currency accounts
Multi-currency accounts allow businesses to hold and transact in multiple currencies simultaneously, avoiding immediate conversion costs on every international payment. This is especially valuable for businesses making international payments regularly — by holding foreign currency balances, they can time conversions more strategically and reduce overall exchange rate exposure.
ConnectPay offers multi-currency IBAN accounts alongside SEPA and cross-border payment capabilities, giving businesses a single platform for managing international business payments across currencies and jurisdictions.
How to make international business payments
It’s quite straightforward, really:
- Get yourself a multi-currency bank account.
- Make sure your business is correctly submitting all the required information.
- Verify that your business is fully compliant with basic AML and KYC regulations.
That’s it! The last point might be a bit more complicated, though, so keep reading to learn more.
To get an idea for how this works, just imagine a European company paying a supplier in China via SWIFT. This will require it to provide accurate SWIFT codes and pay the required intermediary bank fees. Another example would be a UK business using SEPA for quick, low-cost payments to a eurozone partner. This highlights the importance of currency compatibility.
One last thing – before initiating any cross-border payments, consider foreign exchange rates and fees, as these can vary quite a bit depending on the payment method and providers used.
International payment costs: what to expect
The true cost of an international payment is often higher than the advertised transfer fee. Here is a breakdown of the charges businesses typically encounter:
Transfer fees – charged by the sending bank or payment provider per transaction.
Intermediary bank charges – when a SWIFT payment passes through correspondent banks, each may charge $15–$50. These fees are deducted from the payment amount, meaning the recipient receives less than was sent.
Exchange rate markup – banks typically apply a margin of 2–4% above the mid-market exchange rate. On large transactions, this markup significantly increases the real cost of the payment.
Currency conversion fees – separate from the exchange rate markup, some providers charge an explicit fee for converting currencies at the point of transfer.
Receiving bank fees – some banks charge recipients for receiving international payments, adding a further cost that the sender may not anticipate.
To manage these costs effectively, businesses should compare the total cost of sending international business payments across providers — not just the transfer fee — and consider holding multi-currency accounts to reduce unnecessary conversions.
Exchange rate risk in international business payments
Exchange rates fluctuate constantly, and for businesses making international payments regularly, this volatility can erode profit margins — particularly when invoices are issued in one currency but settled in another after a delay.
Key strategies for managing exchange rate risk:
Forward contracts – allow businesses to lock in a specific exchange rate for a future payment date, eliminating uncertainty around what a payment will cost when it settles.
Multi-currency accounts – by holding funds in the currencies you regularly pay in, businesses can avoid converting at unfavourable rates and instead transact directly in the required currency.
Real-time rate monitoring – timing conversions when rates are favourable, supported by alerts and reporting tools, can meaningfully reduce the impact of fluctuations on international payment costs.
Compliance and regulatory requirements for international payments
International payments are subject to regulatory requirements that vary by country, and non-compliance can result in payments being blocked, delayed, or reversed.
The core compliance requirements for international business payments are:
AML (Anti-Money Laundering) – financial institutions must monitor international transactions for suspicious activity and report where required. Businesses sending international payments need to work with providers that have robust AML infrastructure built in.
KYC (Know Your Customer) – both sending and receiving institutions must verify the identities of parties involved in international transactions. Businesses need to ensure their own KYC documentation is current and complete.
Sanctions screening – payments to or from sanctioned individuals, entities, or countries are blocked. Every international payment is screened against sanctions lists as part of the processing flow.
GDPR and data protection – financial institutions handling payment data must comply with applicable data protection laws, including GDPR in Europe, which governs how payment data is processed and stored.
ConnectPay embeds compliance directly into its platform, meaning businesses using ConnectPay for international business payments meet AML, KYC, and regulatory requirements without needing to manage these processes separately.
Is your business leveraging the most efficient, cost-effective payment strategies? As always, we are here to help, so if you have questions, please don’t hesitate to contact ConnectPay specialists – and we’ll set up a meeting with you in no time.
FAQs: International business payments
What are the international payment methods for businesses?
The main payment methods for international business payments are SWIFT wire transfers, SEPA transfers (for euro payments within Europe), international ACH transfers, digital payment platforms such as PayPal and Wise, and multi-currency business accounts. The best choice depends on the transaction size, destination, speed requirements, and the currencies involved.
How do international bank transfers work?
International bank transfers work by routing funds between banks in different countries using payment networks such as SWIFT or SEPA. The sending bank verifies compliance requirements, then routes the payment through correspondent banks if there is no direct banking relationship with the recipient’s bank. Each step in the chain may add fees and processing time before the funds arrive at the destination account.
What is the most common international payment method?
SWIFT wire transfers are the most common method for international business payments globally, enabling transactions between banks in over 200 countries. For businesses operating within Europe, SEPA has become the standard for euro-denominated payments due to its speed, low cost, and broad coverage.
What is the best method for international payments?
The best method depends on the specific use case. SEPA Instant is the fastest and most cost-effective for euro payments within Europe. SWIFT is the most reliable for high-value global transfers. Digital platforms like Wise offer better exchange rates for smaller, flexible international payments. For most businesses making international payments regularly, a multi-currency account combined with SEPA and SWIFT access provides the most comprehensive solution.
How long does an international business payment take?
Processing times vary by payment method. SEPA Instant transfers complete within seconds. Standard SEPA Credit Transfers take one business day. SWIFT wire transfers typically take 1–5 business days depending on the number of correspondent banks involved in routing the payment and the destination country’s banking infrastructure.
What does it cost to send international business payments?
Costs include transfer fees, intermediary bank charges ($15–$50 per intermediary for SWIFT), exchange rate markups (typically 2–4% above the mid-market rate), and in some cases receiving bank fees. Businesses can pay $10–$50 more per transaction for international payments compared to domestic transfers. Using SEPA where available, holding multi-currency accounts, and comparing provider costs in full (not just the headline transfer fee) are the most effective ways to reduce these costs.
What happens if you wire transfer more than $10,000?
In many jurisdictions, wire transfers above $10,000 trigger additional reporting obligations. In the US, for example, financial institutions are required to file a Currency Transaction Report (CTR) for transfers above this threshold. In Europe, transactions above certain amounts are subject to enhanced due diligence requirements under AML regulations. This does not prevent the transfer from proceeding, but businesses should ensure their documentation is in order and that their payment provider has the compliance infrastructure to handle these requirements.
