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A complete guide to best ways of paying overseas suppliers

Bintang Lestada

July 17, 2026

A complete guide to best ways of paying overseas suppliers

Summary

The best way to pay overseas suppliers depends on the amount, currency, frequency, supplier preference, and how urgently the payment needs to land, not on which method has the lowest advertised fee
Compare the total cost the business pays and the amount the supplier actually receives, since intermediary bank deductions and FX markups often dwarf the visible transfer fee
Paying in the supplier's local currency, where the relationship and invoicing allow it, can reduce the number of banks the payment passes through and the deductions taken along the way
A SWIFT bank wire suits large, formal, or one-off payments where documentation matters, but processing can be slower and the final amount received less predictable than the sending bank's quote suggests
PayPal works reasonably well for small or occasional invoices where the supplier already has an account, but its layered fees (a domestic rate plus an international surcharge plus a currency conversion margin) make it expensive at higher volumes
Always verify a supplier's beneficiary details through a separate, previously confirmed channel before sending payment, particularly if the details have recently changed

An AUD $20,000 payment to a Shenzhen manufacturer can arrive in the supplier's account as AUD $19,400, or less, depending on which method you use and how many banks the money passes through on the way.

If you are a first-time Australian founder looking to pay international suppliers and contractors, you are gonna have a couple of questions in your mind. What is the best way to pay overseas suppliers? What does the supplier receive? How much work does it take to pay?

This guide works through that decision properly, covering bank transfers, telegraphic transfers, wire transfers, multi-currency accounts, PayPal, cards, and the international business payment platforms that have emerged as great alternatives to all of them.

What is the best way to pay overseas suppliers

The right choice depends on a couple of questions. What is the payment amount? Which currency? And how often the payment recurs?

As a starting decision summary:

Large, formal, one-off payments tend to suit a bank wire or an international payment platform, where documentation and traceability are more important than saving a couple of dollars
Regular international payments to the same supplier tend to suit a multi-currency account or business financial platform, since fees and FX costs compound when paid repeatedly through a standard bank wire
Smaller or occasional invoices can suit PayPal or a card, due to the easy setup and convenience
Card-accepting suppliers, mostly software vendors and some service providers, suit a business or virtual card, particularly for recurring subscriptions

None of these is a universal winner. A business paying a single AUD $50,000 deposit to a German equipment manufacturer has a different optimal method than one paying USD $200 a month to a Singapore-based SaaS vendor.

What to check before paying an overseas supplier

This is worth doing before comparing payment methods, because it changes which method actually makes sense for a given payment. The best way to pay overseas suppliers depends on a lot of factors as mentioned below:

1. Invoice currency

There are 3 broad options: paying in AUD, paying in the supplier's local currency, or paying in a major settlement currency such as USD that neither party uses domestically. If you pay in AUD, your bank or platform converts the AUD to the supplier's currency, and you carry the FX cost and the exchange-rate risk.

If you pay in the supplier's local currency, the conversion has typically already happened on your side before the funds are sent, and you absorb the conversion cost directly. Here, the supplier doesn’t need to convert the amount on their end.

2. Total payment cost

A simple way to think about the real cost:

Total payment cost = transfer fee + FX cost + intermediary fees + recipient fees + supplier surcharges

Each of these is a separate deduction, and they don't all show up on your side of the transaction. The transfer fee and FX cost are usually visible upfront. Intermediary and recipient bank fees are frequently invisible until the supplier reports receiving less.

3. Supplier payment terms

How and when you pay often matters as much as the method itself. Common structures include a deposit paid upfront with the balance due before shipment, milestone payments tied to production stages, and payment in full before shipment. Some other payment terms could be payment after delivery, Net 30, Net 60, and, for higher-value transactions, letters of credit arranged through a bank.

4. Transfer speed

A bank confirming a payment was sent today does not mean the supplier has usable funds today. Several factors determine the real delivery time: the sending bank's daily cut-off time, weekends and public holidays in either country, compliance and sanctions screening, and the number of correspondent banks the payment passes through before reaching the recipient.

5. Payment traceability

Once a payment leaves your account, you need a way to track it and prove it was sent correctly. Transfer references, payment confirmations, SWIFT message references (such as the MT103 reference for a wire), and remittance advice sent to the supplier all serve this purpose.

Keeping these on file matters both for resolving disputes if a supplier claims non-payment and for your own reconciliation process.

Different ways to pay overseas suppliers for Australian founders

Payment method	Best for	Typical speed	Cost structure	Supplier receives	Pros	Cons
International bank transfer (SWIFT)	Large, formal, or one-off payments	1 to 3 business days	Sender fee plus FX markup; intermediary fees may apply	Amount minus any intermediary and recipient deductions	Established, well-documented, works for nearly any destination	Slower and less predictable total cost than newer alternatives
International payment platform(with multi-currency accounts)	Paying suppliers in multiple currencies, and businesses receiving and holding foreign currency	Same day to a few business days, depending on destination	Transparent FX margin plus low or no transfer fee	Typically the full converted amount	Lower FX costs, fewer intermediaries, hold and pay in multiple currencies	Coverage, supported currencies, payment rails, and transfer limits vary by provider
PayPal Business	Small or occasional invoices where the supplier already uses PayPal	Near-instant once cleared	2.90% + fixed fee domestic, plus 1.00% international surcharge, plus 3.0% to 4.0% currency conversion fee	Amount minus all applicable fees	Fast and familiar; minimal setup	Layered percentage fees make it expensive for large or recurring payments
Virtual card	Recurring software subscriptions and online vendors	Instant	Same fee structure as a standard card, set per-vendor	Full invoiced amount	Per-vendor spend limits reduce exposure if a card is compromised	Not accepted by suppliers who only take bank transfers
Global ACH or local payment rail	Payments to countries where the provider supports local clearing	Often 1 to 3 business days	Generally lower cost than SWIFT since it avoids correspondent banks	Often the full local-currency amount	Lower deductions than a SWIFT wire in many cases	Available only for specific countries and currencies

Best methods to pay overseas suppliers compared by business scenario

Let’s take a couple of common scenarios where you need to send money to your international partners and see which payment method fits you the best.

1. Paying a Chinese manufacturer

Manufacturers commonly request a deposit, often 30%, by TT on order confirmation, with the balance due by TT before or upon shipment.

Many invoice in USD rather than CNY, since USD is the standard settlement currency across global manufacturing trade, though some will accept or prefer CNY, particularly for smaller domestic-facing suppliers.

2. Paying a US software supplier

US-based SaaS vendors typically bill recurring subscriptions in USD via card, and many support virtual cards specifically because they reduce the vendor's own fraud exposure on recurring billing.

Some providers also support direct ACH debits for US-domiciled customers, though this is less common for an Australian business paying a US vendor than it is for domestic US-to-US payments.

3. Paying an overseas contractor

Contractor payments often move through standard bank transfer, a local payment rail where supported, or PayPal, depending on the contractor's preference and the payment frequency.

Always include a clear invoice reference on the payment so the contractor can match it to the specific work performed, particularly if you're paying multiple contractors or multiple invoices in the same period.

For example, paying a Southeast Asian supplier monthly. This is where a multi-currency account or local payment rail may outperform repeated SWIFT transfers because fees and FX spreads compound over time.

What beneficiary details do you need?

Detail	What it means	When it's required
Beneficiary name	The legal name on the recipient's bank account	Always
Beneficiary address	The recipient's registered address	Often required for SWIFT payments and compliance checks
Bank name	The full legal name of the recipient's bank	Always
Bank address	The recipient bank's branch or head office address	Often required for SWIFT payments
Account number	The recipient's account number at the receiving bank	Always, though the format varies by country
IBAN	International Bank Account Number, used across Europe and several other regions instead of a standard account number	Required for payments to IBAN-using countries
SWIFT or BIC code	Identifies the recipient's bank and branch for SWIFT routing	Required for most international bank transfers
Routing number	Used for bank identification in the US and some other markets	Required for US-bound payments via certain rails
Sort code	Used in the UK to identify the bank branch	Required for UK-bound payments via certain rails
Purpose-of-payment code	A code some countries require to classify the reason for an international payment	Required for several countries, particularly across parts of Asia
Invoice number	A reference linking the payment to a specific invoice	Strongly recommended on every payment
Intermediary bank information	Details of any correspondent bank in the payment chain	Sometimes required, particularly for less common currency corridors

How much does it cost to pay an overseas supplier

	Bank wire (illustrative)	International payment platform (illustrative)	Card-funded payment (illustrative)
AUD amount debited (at an illustrative AUD/USD rate)	AUD $30,800	AUD $30,500	AUD $31,200
Transfer fee	AUD $25 to AUD $50	AUD $0 to AUD $15	Not applicable
FX cost	For example, 1% to 3% markup	Embedded in rate, could be 0.3% to 1% markup	Card network FX fee, illustrative 2% to 3.5%
Other deductions	Intermediary and recipient bank fees, like USD $10 to USD $60 on a USD $20,000 invoice	Typically minimal on supported corridors	Possible supplier card surcharge, illustrative 1.5% to 3%
Supplier receives	USD $19,940 to USD $19,990 on a USD $20,000 invoice	USD $19,985 to USD $20,000	Full USD $20,000, since deductions are borne by the payer, not the supplier
Total effective cost to the business	Higher and less predictable, due to embedded FX margin plus possible intermediary deductions	Generally lower and more predictable on supported corridors	Generally highest, once FX fee and any surcharge are combined

The pattern that holds regardless of exact figures: the bank wire's total cost is the hardest to predict in advance because of the embedded FX margin and the possibility of intermediary deductions;

Common mistakes when paying overseas suppliers

Paying an overseas supplier can fail even when the payment method itself is reliable. Most problems come from details around the transfer: the wrong currency, incomplete beneficiary information, unclear bank-charge instructions, or an unverified request to change payment details.

1. Comparing only the visible transfer fee

This misses the FX markup and any intermediary deductions, which are often larger than the fee itself. Calculate the full cost using the formula above before assuming one method is cheaper than another.

2. Sending in the wrong currency

Paying in AUD when the supplier expects USD, or vice versa, can trigger an unplanned conversion on either side and may not match the invoiced amount exactly. Confirm the invoice currency before initiating the payment.

3. Failing to agree who pays bank charges

Without an explicit OUR, SHA, or BEN instruction (where the bank supports the choice), the supplier may receive less than expected and assume you underpaid. Agree this upfront, ideally in the supplier contract.

4. Entering incorrect beneficiary details

A single wrong digit in an account number or a mismatched beneficiary name can delay the payment by days while it's queried or returned. Double-check every field before submitting, especially for first-time payments.

5. Accepting payment-detail changes without verification

This is the entry point for most supplier payment fraud. Verify any change through an independently confirmed contact method, not by replying to the email that requested the change.

For Australian businesses, supplier-payment fraud and business email compromise are major risks. Treat any bank-detail change as a high-risk event until verified independently.

6. Omitting the invoice reference

Without it, the supplier may struggle to match the payment to the correct invoice, especially if multiple invoices or partial payments are involved. Always include a clear reference.

Best practices for paying overseas suppliers

A reliable supplier-payment process starts before the invoice reaches your finance team. The strongest controls are built into the purchasing workflow: agreeing payment terms early, verifying supplier records, calculating the full cost, and separating approval from execution.

1. Agree the currency and payment method before ordering

Settling this at the contract or purchase-order stage, rather than at invoice time, avoids last-minute disagreements about who absorbs conversion costs or which method the supplier expects.

2. Calculate total cost before approving the invoice

Run the full cost formula, not just the transfer fee, before signing off on the payment method for any invoice above a threshold your business sets.

3. Maintain a verified supplier record

Keep a single, current record of each supplier's confirmed beneficiary details, preferred currency, and payment history, so each new payment can be checked against it rather than re-verified from scratch.

4. Separate invoice approval from payment release

Having different people approve the invoice and execute the payment reduces the risk of a single compromised step resulting in a fraudulent or duplicate payment.

5. Use dual approval for high-value payments

Set a threshold where one person approves the invoice and another releases the payment.

Keep payment evidence in one place

Save the invoice, approval, exchange rate, payment receipt, SWIFT reference or platform reference, and remittance advice.

How Aspire simplifies overseas supplier payments

For Australian founders looking to pay their suppliers and contractors, fintech solutions like Aspire’s business account is a great way to send and receive money in multiple currencies.

You get multi-currency accounts, with currency accounts available in AUD, USD, HKD, EUR, and GBP. You also get to send transfers to a recipient's local bank account, which is free for supported currencies and destinations.

Frequently asked questions

What is the best way to pay overseas suppliers?

It depends on the payment amount, currency, frequency, and how urgently funds need to arrive. Large, formal payments often suit a bank wire or payment platform; smaller or occasional invoices often suit PayPal or a card; and regular payments in the same currency are usually cheaper through a multi-currency account or international payment platform that avoids repeated conversion costs.

Is a telegraphic transfer the same as a wire transfer?

Functionally, yes, in almost all practical contexts. Both terms describe an electronic, bank-to-bank transfer typically routed through the SWIFT network. "Telegraphic transfer" is more commonly used across Asia-Pacific, while "wire transfer" is more common in the US and parts of Europe.

What beneficiary details do I need for an international payment?

At minimum, the beneficiary's legal name, their bank's name, and their account number or IBAN. Depending on the destination, you may also need a SWIFT or BIC code, a routing number or sort code, the bank's address, and sometimes a purpose-of-payment code. Required details vary by country and currency, so confirm with your bank or platform before sending.

How long does an international supplier payment take?

It varies by method, destination, and currency, ranging from near-instant for card or PayPal payments to several business days for a SWIFT bank wire, depending on correspondent banks and compliance checks involved. The most reliable way to know is to confirm with the supplier when they actually receive cleared, usable funds, rather than relying solely on your own bank's tracking.

Sources

PayPal Open | PayPal IN - 13/07/2003
Swift - 13/07/2003

This blog is for general information only and does not constitute financial, legal, tax, or professional advice. Aspire’s services are subject to the terms outlined in our 'Terms of Service' and 'Pricing' pages. We make no guarantees as to the accuracy, completeness, or timeliness of the content, and past results do not indicate future performance. Always consult a qualified professional before acting on any information provided.