Best Ways to Pay Your Overseas Suppliers and Vendors

In this article, we explain paying overseas suppliers. Does your company optimally onboard its international suppliers? Check out “How to Streamline Supplier Onboarding.”

Most Common Way to Pay Overseas Suppliers

Bank wire transfers have remained the most popular way for businesses to pay overseas suppliers because they are simply available in nearly every bank across the globe. But this doesn’t necessarily make them the best option for your specific situation.

If your business is looking for ways to save money and strengthen controls when timely paying its international vendors and suppliers, widen your choice of global payment methods beyond the common way of using wire transfers. For very large transactions and banks generating wire transfer revenues, wire transfers might be the right solution. But for smaller transactions, you can choose lower-cost business payment options. 

This guide will help you find the best ways to pay overseas vendors and suppliers. 

Determine the Currency of Payment

Before you start conducting business with an international supplier, document in a purchase order or other contract which payment currency will be used in the transaction. 

Perhaps your company policy is to only pay in U.S. dollars (USD). But if you have flexibility, ask the selected supplier which is their preferred currency. It may be a local currency, the U.S. dollar, or the currency of another major country. 

Also, negotiate which party will pay the foreign exchange fee and transaction fees related to payments. You may be able to shift some fees to the payee instead of having your company pay. 

Factors to Consider Before Paying International Vendors

8 factors to consider before paying international vendors are:

  1. Availability of a payment method in a recipient’s country
  2. Choice of currency
  3. Whether to establish forward contracts for foreign currency transactions
  4. Whether a letter of credit or documentary collection is being used for the international transaction 
  5. Payment method costs
  6. Riskiness 
  7. Payer and payee preferred payment methods
  8. Timeliness of receiving the payment

With wide currency fluctuations in an international country, businesses may decide to establish forward contracts to lock in a currency price when payment to the supplier is later due.

letter of credit or documentary collections may relate to the supplier transaction. The supplier may present proforma international invoices for this purpose. Be sure to pay only the actual invoice for these transactions, rather than making duplicate payments. 

These eight factors relating to paying overseas vendors and suppliers are explained for each payment method discussed in this guide. 

How to Pay Overseas Suppliers 

Your business has choices in how to pay international suppliers. 

Seven different ways to pay overseas suppliers are:

  1. Global ACH or international ACH transfer
  2. International wire transfer 
  3. PayPal 
  4. Prepaid debit card or debit card
  5. Credit card (including virtual card)
  6. Peer-to-peer payments
  7. Paper checks

1. Global ACH or International ACH Transfer

In the U.S., ACH bank-to-bank transfers through the Automated Clearing House Network system for member financial institutions are primarily limited to domestic-only payments within the United States. Nacha regulates the ACH Network. However, Nacha also has rules for and manages cross-border payments similar to U.S. ACH payments called international ACH transfers or global ACH. Global ACH is one type of international EFT

For these international ACH transfer payments, foreign agencies outside U.S. jurisdiction participate. For an international ACH transfer, a direct deposit is made into a cross-border bank account, which clears through the country’s clearing mechanism and can involve intermediary banks. Intermediary banks facilitate the transaction between the payer’s bank and the payee supplier’s bank, which may be a local bank offering a local currency account. 

In Europe, for example, 35 member countries make bank-to-bank transfers in Euro currency called SEPA (Single Euro Payments Area). SEPA participates in cross-border international ACH transfers with Nacha. 

Global ACH is a low-cost payment method. 

Not all countries participate in global ACH/international ACH transfers. Therefore, global ACH may not be available to your business as a way to pay overseas suppliers. 

2. International Wire Transfer

International wire transfers, sometimes called SWIFT payments, are electronic funds transfers (EFTs) processed through the SWIFT member network system, using secure messaging. Wire transfers are bank-account-to-bank account transfers made by financial institutions with the help of intermediary banks, which are third parties. 

International wire transfers are used for cross-border payments in different countries. For cross-border payments, international wire transfers can take several days depending on the country, according to SWIFT. 

If the recipient’s bank account is correct and bad actors haven’t hacked your bank account or tricked you into making a wire transfer through phishing schemes, then wire transfers are considered to be relatively safe. 

The high fees for sending an international wire transfer cost $30 to $50 plus foreign exchange fees. Wire transfer fees are also charged by the international bank of the recipient and any intermediary banks. This pricing structure makes international wire transfers a costly payment method. 

3. PayPal

Your business can choose PayPal to pay international suppliers. PayPal Business lets the recipient prepare an electronic invoice to request a PalPay payment. PayPal charges a percentage transaction fee that depends on the type of money transfer or source of funding. 

The percentage fee for the transaction with a PayPal-account to PayPal-account money transfer is 5% of the amount, between $0.99 and $4.99. If the funding source is a PayPal credit, credit card, or debit card, the transaction fee is 2.9% of the amount plus a fixed fee, depending on the currency. A foreign currency exchange fee of 4% (or a different percentage disclosed in the transaction) may also apply to the payment transaction if the sender converts funds at a foreign exchange rate before sending the payment to the recipient. Understand PayPal international transaction fees and how you can avoid them. 

PayPal uses different methods of payment services and can be classified as a Peer-to-Peer payments network. 

4. Prepaid Debit Card or Debit Card

Businesses can pay overseas suppliers and freelancers using a prepaid debit card. The prepaid debit card has been funded for a certain amount of money. Recipients can use the prepaid debit card for shopping or make ATM withdrawals for a fee. Some prepaid debit cards may be used in foreign countries. 

Prepaid debit card fees include several types, as explained by the Consumer Financial Protection Bureau (CFPB), a U.S. government agency.  International prepaid debit card fees  may have a foreign transaction fee (foreign currency fee) as one type of these fees. 

A debit card that’s not prepaid is linked to the payer’s bank account and withdraws money to fund the debit card payment for the transaction. Transaction fees are often charged for debit card transactions. 

5. Credit Card, including Virtual Card

Payers can use credit cards, including virtual cards with unique 16-digit numbers for each transaction. Virtual cards are tied to the credit card account. Virtual cards improve security by using different card numbers and sometimes offer rewards for transactions. 

Some business account credit cards, including virtual cards, track business spend by employee. Spend controls give you more control over expenditures to protect the company’s bottom line. 

6. Peer-to-Peer Payments

In peer-to-peer network payments, transfers are made between accounts. Digital eWallets may be used to hold fund balances and make money transfers. These money transfers are sometimes instantaneous, or they may take up to three business days. Peer-to-peer payments are riskier because it may not be possible to get the funds back if the money transfer is sent to an incorrect account or a scammer. 

Some examples of peer-to-peer payment apps are:

  • Venmo and PayPal
  • Square Cash
  • Zelle
  • Other specialized international money transfer apps

Some peer-to-peer payment platforms have low fees. Compare transaction fees and foreign exchange rates. 

7. Paper Checks

Although your business may still issue paper checks to overseas suppliers, it’s an inefficient and risky payment method. When live paper checks are mailed internationally, they take a lot of time to reach the recipient. They may be lost or stolen from the mail. Because the paper check shows the routing number and bank account from which the check was issued, it may be an unsafe payment method, encouraging fraud. 

Because of these problems presented by paper checks, we don’t consider this 7th payment method one of the best ways to pay international suppliers and global partners. Therefore, we limit the number in the title of this guide to 6 Best Ways to Pay Your Overseas Suppliers and Vendors.

Paper checks are a somewhat costly payment method because of the manual processing time compared to electronic payments. 

How can your business automate its global payables and supplier payments?

Download our white paper, “The Holy Grail of Accounts Payable”  to learn how your growing business can improve payments to overseas suppliers.

Use AP automation software and mass payments software to make more efficient, cost-effective, and safer payments to overseas suppliers and freelancers.

What’s the Best Way to Pay International Suppliers?

The best way to pay international suppliers is to use flexible and efficient global payments and AP automation software from Tipalti that’s integrated with your ERP system or accounting software. That’s because the Tipalti payment solution gives you a transaction-related choice of preferred payment methods for paying international suppliers.

Choice of Payment Methods

Mass payments and AP automation software for overseas payment enable a choice of multiple payment methods in 196 countries and 120 currencies. As an option, Tipalti offers advanced foreign exchange (FX) functionality to make payments simple. Tipalti automatically reconciles large batch payments in real-time. 

Tipalti international payment methods, depending on country availability,  include:

  • Global ACH
  • Wire transfer
  • PayPal
  • Prepaid debit cards
  • Tipalti virtual card (with rewards)
  • Live paper check

For U.S. domestic transactions, Tipalti also offers ACH payments.  

Tipalti provides automation software for AP automation and mass payments to solve your international supplier payment needs. Tipalti software also handles making freelancer payments, royalty payments for books and music, and referral and influencer payments. 

AP Automation for Electronic Invoice Processing

Tipalti AP automation software works for electronic invoice processing and approvals and managing international accounts payable. Tipalti is multi-entity and multi-language, with business units and consolidated views of payables. 

Mass Payments Software

Tipalti mass payments platform lets you split or shift some transaction fees to payees, lowering your business costs. When you onboard suppliers with Tipalti AP automation software, payees securely enter their W-8 form data for tax compliance and payment information for an agreed choice of payment methods and currency. You’ll be ready to make the first payment when the accounts payable is due, according to its payment terms. 

Tipalti Automation Software Advantages

You’ll gain other advantages by using Tipalti’s AP and global payments automation software, including significantly cutting payables costs and staff time by 80%, automatically gaining global regulatory compliance, and reducing fraud risks and errors. Tipalti improves enterprise risk management and cash flow. The time savings achieved result in reduced hiring needs. And the finance team can work on new projects to add business value.


Paying international vendors and suppliers is a nuanced process. Businesses can avoid picking only one method and currency for paying all of their overseas suppliers, vendors, or partners.  When your business performs the process of how to pay international vendors well, it pays invoices timely and considers preferred, cost-effective payment methods and currency choices that both payer and payee find agreeable. 

Your business needs the right AP and mass payments automation software tools from Tipalti to implement the best ways to pay overseas suppliers. Download our white paper, “How to Streamline Supplier Onboarding.

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