Author: Corpay Cross-Border Solutions https://payments.corpay.com/cross-border
Does your company often hire vendors that are based outside the US? While many of these vendors choose to issue invoices in US dollars (as currency denomination), paying them can be more complicated than one might think.
Many questions come into play when looking to pay vendors internationally, such as: what is the actual cost of sending a USD wire transfer? What is the cost for the vendor to receive it? And, more importantly, how much does it really cost the invoice-payor to pay a single invoice?
- Wire Fees
The cost of sending a USD wire depends on the provider, but it can range anywhere from $10 up to $50 per wire transfer. This typically covers the transaction and any lifting fees, which are fees taken by each bank the payment transfers through, also known as intermediaries. If you’re sending US dollars to a foreign vendor, there are typically more intermediary banks involved because the payment must be converted to their local currency in order to be deposited into their bank account. This is why paying foreign vendors can lead to additional – and sometimes unexpected – costs..
- Intermediaries
When a foreign vendor issues a bill denominated in their local currency (instead of USD), the US customer pays the vendor by way of a foreign currency wire transfer or international ACH, depending on the currency.
Sounds straightforward, right?
Let’s look at the above from a different perspective, what if the foreign vendor sends payment to settle your bill that you issued to them in a foreign currency? The payment is routed through multiple intermediaries, and then converted to US dollars before it can be credited to your organization’s account. If the US bank uses a less favorable exchange rate to convert the foreign payment to USD, this results in additional hidden costs. Everyone who plays a role in the wire transfer takes a ‘piece of the pie’ for transactional costs. More than likely, the expected amount you are now receiving for the bill you issued is less.
About Corpay
Global businesses trust Corpay Cross-Border to power their international payments, execute plans to manage their currency risk and support their growth around the world. We aim to deliver unmatched service and expertise with respect to moving money globally. Utilizing our proprietary payment automation technology and currency risk mitigation solutions, we take pride in connecting companies large and small with the global financial markets and businesses all over the world.
You can feel confident working with Corpay, as we are backed by our parent company, FLEETCOR Technologies, Inc. (NYSE:FLT) a leading global business payments company based in Atlanta, Georgia, USA. FLEETCOR is a Fortune 1000 firm, an S&P 500 member and has USD $2.8B in annual revenue with a market capitalization of USD $18.2B (as of December 31, 2021).
To learn more contact Danielle Orcutt, National Account Manager, Corpay 929-504-8791 danielle.orcutt@corpay.com https://payments.corpay.com/cross-border
