International Payments for UK Businesses: Fees, FX Margins, Speed and How Providers Compare

UK BUSINESS SOFTWARE · FX & PAYMENTS 2 OF 4

UK Business Software series: FX and payments. Four guides: currency management, international payments, multi-currency accounts and treasury software. Facts from vendor pages and regulators; no rankings, no recommendations.

What an international payment really costs

An international payment from a UK business typically has two costs: a fixed transfer fee and an FX margin on the exchange rate. Banks often charge £15 to £30 per SWIFT transfer plus a margin of 2% to 4%, while specialist platforms price from about 0.5% above the interbank rate. Intermediary banks may deduct additional fees, which are not always shown upfront.

The headline fee is only part of the total cost. The exchange rate margin is the difference between the rate you receive and the interbank mid-market rate. On a £20,000 supplier payment, a 0.5% margin costs £100, while a 3% margin costs £600. Over a year of regular payments, that difference can be substantial. Banks typically apply margins of 2% to 4% for business customers, depending on the currency pair and relationship. Specialist providers advertise margins from 0.5% above the interbank rate, but the actual margin depends on the payment amount, currency, and whether you use a standard or premium tier.

Intermediary charges are a hidden cost in SWIFT payments. When a payment crosses borders, one or more correspondent banks may process it, each deducting a fee that can range from £10 to £30. These charges are often taken from the transferred amount, so the recipient receives less than expected. Some providers offer 'OUR' (payer pays all) instructions, but banks may charge extra for this. Specialist platforms that use local payment rails avoid intermediary banks entirely, which is why their delivery times are faster and fees are more predictable.

To compare costs accurately, you need to calculate the total cost in pounds, including the fixed fee, the FX margin, and any intermediary charges. For a £20,000 payment, a bank charging £25 plus a 3% margin costs £625, while a platform charging £5 plus a 0.5% margin costs £105. The difference is £520 per transaction. For businesses making regular payments, this can amount to thousands of pounds annually. Always check the provider's pricing page for the current margin and fee structure, as rates can change.

SWIFT vs local rails

SWIFT is a global messaging network for bank-to-bank transfers, often taking 1 to 5 business days and involving intermediary banks. Local payment rails, such as Faster Payments in the UK or SEPA in Europe, settle directly between banks in the same region, usually within seconds or hours. Specialist platforms use local rails to deliver payments faster and at lower cost, but SWIFT is unavoidable for currencies without local rail access.

SWIFT does not move money itself; it sends secure messages between banks. Each bank in the chain may take time to process the payment, and if the sending and receiving banks do not have a direct relationship, correspondent banks are used. This can add delays and fees. Cut-off times matter: if you submit a payment after a bank's cut-off, it may not be processed until the next business day. SWIFT payments can take 1 to 5 business days, depending on the corridor and the banks involved.

Local payment rails are faster because they settle within a single clearing system. For example, a payment from a UK bank to a European bank using SEPA can arrive in one business day, while Faster Payments is instant for UK domestic transfers. Specialist platforms hold local bank accounts in multiple countries, allowing them to make payments from a local account to another local account, bypassing the SWIFT network. This is why platforms often promise delivery in one business day to 120+ countries.

SWIFT is unavoidable when the destination country does not have a local rail that the provider can access, or when you are sending to a bank that only accepts SWIFT. In such cases, you will pay higher fees and wait longer. To minimise delays, check the provider's cut-off times and submit payments early in the day. Some platforms offer a 'guaranteed' delivery time for an extra fee, but this is not always available for all currencies.

Paying suppliers and contractors abroad

For paying suppliers and contractors abroad, businesses need features like batch payments, approval workflows, and accounting integration. Specialist platforms offer these tools, allowing you to upload a spreadsheet of payments, set up multi-person approvals, and sync transactions to accounting software. Contractor payouts are a separate service, often provided by platforms like Deel or Remote, which are not covered here.

Batch payments are essential for businesses that pay multiple suppliers or contractors in one go. Instead of entering each payment individually, you can upload a CSV file with all payment details, and the platform processes them together. This saves time and reduces errors. Approval workflows add a layer of control: you can set rules so that payments above a certain amount require sign-off from a second person, which is useful for internal compliance.

Accounting integration is another key feature. Many platforms connect directly to accounting software like Xero or QuickBooks, automatically recording each payment with the correct FX rate and fees. This reduces manual data entry and helps with reconciliation. Some platforms also offer API access for custom integrations, which is valuable for businesses with bespoke systems.

Contractor payouts are a different use case, where you need to pay freelancers or employees in multiple countries, often with different currencies and tax requirements. Platforms like Deel and Remote specialise in this, handling contracts, tax forms, and payments. However, these are not covered in this article. For regular supplier payments, a standard international payment platform with batch and approval features is usually sufficient. Consider the number of payments you make per month and whether you need multi-currency accounts or invoicing tools.

Getting paid from abroad: local receiving accounts

To receive payments from abroad, UK businesses can use local receiving accounts, which provide you with bank details in foreign currencies, such as USD or EUR. This allows customers to pay you locally, avoiding international transfer fees and delays. You can invoice in the customer's currency and choose to hold the funds or convert them to GBP when the rate is favourable.

Local receiving accounts are offered by specialist payment platforms. When you open one, you get a local account number and sort code (or equivalent) for that country. For example, a USD account gives you US routing and account numbers, so a US customer can pay you as if you were a US bank. This eliminates the need for SWIFT transfers and reduces fees for your customer, which can make your invoices more attractive.

Invoicing in the customer's currency is a common practice. It avoids confusion about exchange rates and makes it easier for customers to pay. However, you take on FX risk if you hold the funds in a foreign currency. Many platforms allow you to hold multiple currencies in one account, so you can wait for a favourable exchange rate before converting to GBP. Some platforms offer automatic conversion at the interbank rate plus a small margin, while others let you set a target rate.

Marketplaces, such as Amazon or Etsy, often pay out in local currencies. With a local receiving account, you can receive these payouts directly, avoiding conversion fees that the marketplace might charge. When comparing providers, check the fees for receiving payments, the FX margin for conversion, and whether there are any monthly account fees. Some platforms charge a small fee for receiving payments, while others are free for incoming transfers.

Safeguarding, FSCS and what happens if a provider fails

UK payment platforms are typically e-money institutions, which must safeguard customer funds in separate accounts at a bank. This means that if the platform fails, your money is protected from creditors, but it is not covered by the Financial Services Compensation Scheme (FSCS). Banks, on the other hand, are covered by FSCS up to £85,000 per person per bank.

E-money institutions are regulated by the Financial Conduct Authority (FCA) under the Electronic Money Regulations. They are required to keep customer funds in a safeguarding account, separate from their own operational funds. This ensures that if the company goes into administration, customer money can be returned, up to the amount held in the safeguarding account. However, safeguarding is not the same as FSCS protection. FSCS is a statutory compensation scheme that protects deposits up to £85,000 per person per bank if the bank fails. E-money institutions are not banks, so their customers are not eligible for FSCS.

If a payment platform fails, the administrator will distribute the safeguarded funds to customers. In most cases, customers should get their money back, but there may be delays. There have been no major failures of UK e-money institutions recently, but the FCA has taken action against firms that failed to safeguard properly. It is important to check that a provider is authorised by the FCA and to understand their safeguarding arrangements.

For large balances, some businesses choose to use a bank for part of their funds to benefit from FSCS protection. However, banks often have higher fees and worse FX rates. A common approach is to keep operational funds in a bank and use a payment platform for transactions, transferring funds as needed. This balances protection with cost efficiency. Always read the provider's terms and conditions to understand how your money is protected.

Choosing a provider for your payment volume

For under 10 payments a month, a bank or a simple platform with low fees may suffice. For 10 to 100 payments, you need batch processing and approval workflows. For over 100 payments, look for API integration, multi-user access, and dedicated support. The total cost of ownership includes monthly fees, FX margins, and time spent on manual tasks.

If you make fewer than 10 international payments a month, the priority is low cost and ease of use. A bank may offer a simple online transfer, but the FX margin is often high. Specialist platforms like Wise Business or Revolut Business offer lower margins, but some charge a monthly fee if you have a multi-currency account. Compare the total cost for your typical payment amount. For occasional payments, a pay-as-you-go platform might be cheaper than a subscription.

For 10 to 100 payments a month, you need efficiency. Batch payments allow you to upload a spreadsheet and process many payments at once. Approval workflows are important for internal controls, especially if you have multiple employees. Some platforms offer role-based access, so you can restrict who can initiate and approve payments. Accounting integration saves time on reconciliation. Look for platforms that offer these features without a significant increase in fees.

For over 100 payments a month, you likely need API access to automate payments from your own systems. This is common for businesses with high transaction volumes, such as e-commerce or SaaS companies. API integration allows you to initiate payments programmatically, check balances, and receive webhooks for payment status. You may also need multi-user support with granular permissions and dedicated account management. The total cost of ownership includes not just fees but also the time your team spends on manual work. A platform with a higher fee but better automation can save money in the long run.

When comparing providers, consider the full picture: monthly fees, per-transaction fees, FX margins, and any hidden costs like receiving fees or currency conversion fees. Also consider the speed of delivery and the number of currencies supported. Some platforms offer volume discounts, so it is worth negotiating if you have high volume. Always check the provider's pricing page for the latest rates.

How much does it cost a UK business to send money abroad?

How much does it cost a UK business to send money abroad?

Costs vary by provider. Banks typically charge £15 to £30 per SWIFT transfer plus an FX margin of 2% to 4%. Specialist platforms charge from about 0.5% above the interbank rate, with fixed fees from £0 to £5. Intermediary bank charges may apply on SWIFT payments, adding £10 to £30.

What is the difference between SWIFT and local payment rails?

What is the difference between SWIFT and local payment rails?

SWIFT is a messaging network for international bank transfers, often taking 1 to 5 business days and involving intermediary banks. Local payment rails, such as SEPA or Faster Payments, settle directly between banks in the same region, usually within seconds to one business day. Specialist platforms use local rails to reduce cost and time.

Is Wise Business cheaper than a bank for international payments?

Is Wise Business cheaper than a bank for international payments?

Wise Business typically offers lower FX margins (from 0.5% above the interbank rate) and lower fixed fees compared to banks, which often charge 2% to 4% margins. However, the total cost depends on payment amount and currency. For large payments, the savings can be significant, but banks may offer better rates for high-volume customers.

Are business payment platforms FSCS protected?

Are business payment platforms FSCS protected?

No, most payment platforms are e-money institutions, not banks, so they are not covered by the Financial Services Compensation Scheme (FSCS). They must safeguard customer funds in separate accounts, which protects money if the platform fails, but there is no government-backed compensation. Banks are FSCS protected up to £85,000 per person.

Can my UK business receive payments in US dollars without a US bank account?

Can my UK business receive payments in US dollars without a US bank account?

Yes, specialist payment platforms offer local receiving accounts, providing you with US routing and account numbers. This allows US customers to pay you locally, avoiding international transfer fees. You can hold USD and convert to GBP when you choose, often at a lower margin than a bank.

LAST REVIEWED 3 SEPTEMBER 2026