What are international payments?
International business payments cover paying overseas suppliers, receiving from foreign customers and holding balances in currencies other than sterling.
Almost all the cost sits in the exchange rate, not the visible transfer fee. A bank advertising free transfers on a 3% FX margin is far more expensive than a specialist charging £5 on a 0.4% margin.
The mid-market rate — the one you see on Google — is the benchmark. The gap between that and the rate you're given is the real price of the transfer.
How does it work?
You open an account with a payments provider, complete verification, and fund it from your UK business account by Faster Payments.
You then book a rate for the currency you need, add the beneficiary details, and send. Major corridors like GBP to EUR or USD often arrive the same day.
Here's a fictional example:
Meet Larkspur Imports
Larkspur buys ceramics from Portugal and Italy, sending around £500,000 a year to suppliers in euros.
Their high street bank charged £20 per transfer on an FX margin of about 2.75% — roughly £13,750 a year lost to the rate, on top of transfer fees.
They moved to a specialist offering a 0.45% margin with £3 transfers. The same £500,000 now costs about £2,250 in FX.
That's around £11,500 a year saved, and the finance director now books forward contracts each quarter to lock costs against the euro.
What are the different types of international payment?
Spot transfers
The standard transfer: you buy currency at today's rate and it's delivered within a few working days.
Best for one-off supplier payments and anything where you don't need certainty about future rates.
Multi-currency accounts
Hold balances in euros, dollars and other currencies with local receiving details, so overseas customers pay you domestically in their own country.
This avoids double conversion — you convert once, when the rate suits you, rather than on every incoming payment.
Forward contracts and hedging
Lock today's rate for delivery up to a year ahead, usually against a deposit of 3% to 10% of the contract value.
Essential when you've committed to a price in sterling but your costs are in another currency.
Is a specialist provider right for my business?
Some businesses save thousands, others barely notice the difference:
- 1
Importers and wholesalers
Regular high-value supplier payments where a two-point margin reduction is worth five figures a year.
- 2
Exporters and online sellers
Receiving in euros or dollars from marketplaces and customers, where local account details prevent double conversion.
- 3
Businesses with overseas staff or contractors
Frequent smaller payments where flat transfer fees and batch payments cut both cost and admin time.
What do you need to open an account?
Providers are regulated and will run full checks before activating you:
Company documentation: Companies House registration, articles, and details of directors and anyone owning more than 25%.
Identity and address verification: Photo ID and recent proof of address for each person being verified.
Source of funds information: What your business does, where the money comes from and roughly what volumes you'll be moving.
A UK business bank account: Used to fund transfers and to receive converted currency back into sterling.
Beneficiary details: IBAN or local account details, SWIFT or BIC where required, and the beneficiary's registered address.
How to compare international payment providers
Ignore the marketing and compare on these:
- 1
Total landed cost
Take the amount that arrives in the destination currency and divide it by what left your account. That single number exposes the FX margin that fee tables hide, and it's the only fair way to compare a bank against a specialist.
- 2
Currency coverage and local details
Check the currencies you actually use are supported, and whether you get local receiving details rather than only SWIFT. Exotic corridors carry much wider margins than EUR and USD.
- 3
Regulation, safeguarding and support
Confirm FCA authorisation on the register and that client funds are safeguarded in segregated accounts. For larger volumes, a named dealer who can talk you through hedging is worth more than a slightly better rate.
Benefits and drawbacks of specialist providers
Pros
- FX margins a fraction of high street banks
- Local receiving details in major currencies
- Forward contracts to protect margins
- Batch payments and API automation
Cons
- Another account to open and verify
- Not a full bank — no lending or overdraft
- Hedging products need care and a deposit
- Exotic currencies still carry wide margins
Why choose a specialist over your business bank?
Banks bundle FX into a relationship you already have, which feels convenient. The convenience typically costs 2% to 3% of every pound converted.
Specialists are regulated payment institutions rather than banks. Your money isn't protected by FSCS, but authorised firms must safeguard client funds in segregated accounts, so balances aren't lent out.
The practical answer for most businesses is both: keep the bank for borrowing and day-to-day sterling, and route currency through a specialist.
What if the exchange rate moves against me?
For committed future costs, a forward contract removes the risk entirely by fixing the rate now for delivery later, against a modest deposit.
Market orders let you set a target rate and execute automatically if the market reaches it, which suits businesses with flexibility on timing.
Where neither fits, splitting large conversions into several tranches over a period averages out the rate and avoids betting the whole exposure on one day.
What are the alternatives?
Other ways to handle overseas money movement:
Your business bank
Simplest option with everything in one place, but FX margins of 2% to 3% make it the most expensive route for regular volume.
Business accounts with built-in FX
Some digital business accounts include mid-market-rate conversion up to a monthly limit, which suits smaller, occasional transfers.
Paying in sterling
Asking suppliers to invoice in GBP moves the FX cost to them — and they usually price it in at a worse rate than you'd get yourself.
FAQs
About this guide
Written and reviewed by the Grow Your Business team, and kept up to date as rates, rules and provider terms change.
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