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3 hidden costs of international business payments and what you can do about them

by Cambridge Global Payments | March 22, 2018

If you have overseas suppliers you know that making cross-border payments can be expensive. Here are our suggestions for removing hidden costs…

Any business that makes international payments knows that banks typically charge a fee for every international transaction. And if you’re making a lot of payments, the costs can really start to add up. But did you know there are other hidden costs? Those transaction fees could just be the tip of the iceberg.

Let’s take a look at how you can mitigate hidden costs when you make cross-border payments:

1. Cost of staff when processing international business payments

Have you thought about how long your accounts payable (AP) or finance team spends processing international business payments?

There are many manual tasks that eat up time, such as:

  • keying in payments
  • dealing with telephone payments queries
  • tracking down missing payments
  • adding new suppliers to the system
  • updating supplier details

Put it this way, if you have a team of two spending just one day a week on payment runs, this could be costing your business around £8,900 per year1.

Find out more about the cost of manual input in our white paper Evaluating your cross border payments cost and efficiency.


Hint: automate your manual processes

There are some very simple and effective ways of automating your manual keying processes. For example, most accounting and enterprise resource planning (ERP) systems offer the functionality to export a payment file, which contains key information including IBAN, SWIFT and BIC numbers. The file can be imported into your bank or payment provider’s platform, meaning your AP team spends less time on manual input.

In addition, using integration or payment file export / import can remove the need for manual keying so the likelihood of errors is reduced (see below for more on errors).

2. Cost of errors on international business payments

Payments go wrong; it’s an unavoidable fact. Whether it’s a mis-key when inputting bank details, or a compliance issue at the recipient bank, there’s a chance that some payments will not show in your supplier’s bank account. If you’re lucky, you might be informed quickly and be given the opportunity to make the necessary adjustments. Usually, however, the payment will be lost in the ether and you may need to pay for Proof of Payment / SWIFT receipts from your bank. You will likely waste time on the phone with investigations teams trying to track down the payment and rectify the issue.

Hint: use auto-verification

Some specialist cross-border payment providers have an auto-verification tool, which checks details against known banking codes when inputting new bank details. The person creating the payments will be alerted in real time so your business can avoid sending a mis-keyed payment.

If you’re working with a specialist provider they should understand compliance and regulatory requirements for different countries. As such, they can alert you of any supporting information you need to include with your payment, minimising the potential for failure once it’s sent.

3. Cost of foreign exchange losses on international business payments

If you make a foreign exchange (FX) payment and it is returned due to an error, you can lose out in a number of ways.

Here is a typical scenario showing how you can lose out:


On the day of purchase the interbank rate is 1.3763*

*For this example show, we have assumed all happens on the same day and the mid-market rate remains unchanged.

1. You make a $30,000 payment from your GBP account at an FX rate of 1.36 – a GBP cost of £22,058.

Your bank applies an FX spread of 1.2%.

2. The payment fails and is returned to you.

Your bank applies an FX spread of 1.2%.

3. The $30,000 is converted back to GBP at an FX rate of 1.3928 leaving you with £21,541.

4. You correct the payment details and resend $30,000 at an FX rate of 1.36, at a GBP cost of £22,058.

Your bank applies an FX spread of 1.2%.

Total loss to you: £517 – to resend $30,000.

Hint: use a multi-currency emoney account

If you use a multi-currency emoney account that is already funding in the currency you need to send, there is no currency conversion cost if you make an error. Depending on your business model, a multi-currency emoney account may be a practical and cost-effective solution.

Be savvy about the international payment services you use

As we have shown, staff costs, manual errors and foreign exchange losses could be making your cross-border payments processes inefficient and unnecessarily expensive.

Many of these costs are hidden and therefore easy to overlook. So, in summary, we recommend you:

  • Keep a close eye on staff costs and errors, and make it your mission to reduce them.
  • Monitor the foreign exchange (FX) spread to make sure you’re getting a fair price.
  • Regularly compare suppliers to see if it would be more cost effective to use someone else for your payments.


  1. Figures given in GDP, based on average UK salary of £20,000. Source: Glassdoor 

“Cambridge Global Payments” is a trade name, which in this document refers specifically to one or more of these legal entities: Cambridge Mercantile Corp., Cambridge Mercantile Corp. (U.S.A.), Cambridge Mercantile Corp. (Nevada), Cambridge Mercantile (Australia) Pty. Ltd.

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