How Businesses Can Reduce Costs on International Payments

If you’re a business that operates or plans to go beyond borders, it’s natural to think about how to reduce overseas transfer costs. Payment costs aren’t fixed. They’re a product of the route they take and the structure they follow. Do you want to know more?

Keep reading!

What Are International Payments?

As the name suggests, international payments occur when the sender and recipient are in different countries. Naturally, these transactions require currency conversion and clearance through different regulatory banking systems.

Handling different currencies can be complex. Platforms like Antom make this easy with their unified payment solution. It is designed to support local currencies around the world. Eventually, it becomes easier to reach a wider radius when you sign up with such platforms.

Why Do International Payments Cost More Than Domestic Payments?

Domestic transfers are simple. Your bank talks to their bank, and you're done. But send money across borders, and your cash basically travels through an expensive route.

According to JPMorgan, cross-border transactions may reach up to $320 trillion by 2032. That’s a big number. It shows that learning to handle international transactions is the need of the hour for businesses these days.

Before money reaches the recipient’s account, a few things happen behind the scenes that must be taken into account:

• Currency Conversion Margins: Payment providers rarely use the mid-market exchange rate. Instead, they apply a retail markup to the conversion, embedding a profit margin into the rate itself.
• Outbound Transaction Fees: This is the core administrative charge. It is applied by the initial financial entity, the one that starts the payment.
• Correspondent Banking Costs: When money cannot travel directly from bank to bank, it goes through intermediary networks. Each institution takes its cut along the way.
• Inbound Recipient Fees: The beneficiary's bank may charge a handling fee for crediting foreign funds to the account (depending on local banking regulations).
• Regulatory Auditing Costs: Cross-border capital movement requires rigorous screening. Financial institutions have to bear the costs of running automated anti-fraud and anti-money laundering (AML) compliance checks.

Traditional bank wires are usually the slowest and most expensive way to go. If you want to keep more money in your pocket, skipping the conventional banks and using modern fintech platforms that tap into local networks is usually the smartest move.

6 Types of International Payments

Not all cross-border payments are equal. Some are slow, some may charge more, and others may not suit your business model. If you’re in this fix and need a way out, the table below might help. It breaks down six common international payments and the features that tag along:

And if you’re concerned about how each method stands (in terms of speed, global reach, and adoption), the chart below might help:

Key: 🟢 = High/Strong, 🟡 = Moderate, ⚪ = Low/Limited.

The data above reflects how payment methods today are diverse. Remember, your business needs a smart solution, not trial and error. So, take your time and analyse what fits.

Some modern payment platforms also help businesses reach international customers by supporting a large number of local payment methods. For example, Antom allows access to over 300 payment methods worldwide. Businesses can provide familiar methods to their partners and customers across different markets. This level of flexibility can build stronger relationships with global partners.

Ways to Lower the Cost of International Payments

Listed below are some strategies businesses can adopt to cut costs on international transfers:

Choose Online Payment Gateways

Online payment gateways can help reduce the cost of international payments. They have a simple payment process. It reduces reliance on traditional banking networks.

Currently, many modern gateways support multiple currencies and local payment methods. As a result, there are fewer delays and extra charges.

The transparency around fees and exchange rates makes them one of a kind. Traditional cross-border payments involve intermediary banks, foreign exchange markups, and additional processing charges. In fact, nearly one-third of cross-border payments still incur costs exceeding 3% of the transaction value, according to the European Central Bank.

The gateways keep international payment costs under control. Instead of incurring multiple banking fees and currency conversion charges, businesses typically pay a single transaction fee based on the payment amount. They also integrate with other business tools and work around various payment methods (including credit and debit cards, digital wallets, etc.).

Payment management becomes much easier for businesses this way.

Open a Multi-Currency Account

If your business regularly sends or receives money from abroad, a multi-currency account can be a good cost-control measure. These accounts let you hold, send, and receive funds in different currencies without immediately converting them to your home currency.

According to a survey, currency conversion fees and related charges can add 10–20% to the total cost of an international transaction. A multi-currency account lets you bypass these costs.

Many modern payment providers now support multi-currency settlement. For example, Antom allows businesses to accept payments in local currencies and settle funds in multiple currencies. The risk of foreign exchange and conversion is lower when you have such accounts.

Know that holding funds in foreign currencies exposes businesses to exchange rate fluctuations. The value of these currencies may fluctuate. This may affect the amount you receive upon withdrawal.

Consolidate International Payments

Standard international transfers quickly rack up individual fees, particularly when sending money across multiple borders. When you switch to batch payments, your business can bundle these transactions together. This brings an advantage of bulk processing rates and fewer (or none) per-transfer penalties.

For example, group several payments into a single payment run. This can reduce banking and processing costs. Plus, there’s a huge reduction in admin work involved when tracking and managing multiple transactions. Such payment patterns are useful for businesses that regularly pay international vendors, contractors, or remote teams.

This streamlines the payment process. Businesses get a clear view of their cash flow and can tweak the payment structure whenever they feel it’s affecting their budget. Still, it’s important to check that your payment schedules align with supplier agreements and cash flow needs. At times, payments need instant processing, and you can’t delay them.

Use Real-Time Payment Networks

Traditional international payments often move through correspondent banking networks. Several banks are involved in this process before the money reaches the final recipient. Even though it’s reliable, the process adds delays and increases fees.

Real-time payment networks are a faster alternative. They don’t take several days to settle, and payments are completed within seconds or minutes. Businesses get the money when they need it, without spending hours (or days) tracking their payments.

The World Bank recently found that the global average cost of sending money internationally remained around 6.36% in 2024. This underscored the need for a more efficient payment infrastructure.

Many modern payment providers are also investing in faster payment capabilities. For example, Antom connects businesses to several local payment methods and real-time payment options. Merchants can enjoy fast, seamless payments across markets.

So, if you’re a business that frequently sends international payments, networks like Antom are providing ways to reduce delays and potentially lower processing costs over time.

Conclusion

The discussion above shows that international payments don’t have to be slow and expensive. Given today's options, a business can easily find a cost-effective payment transfer solution. Take some time to explore all the available options and choose the one that seems to be the right fit.

Remember, your payment system will affect your profits and business reputation. So, it’s important to choose wisely. Even if it takes some time and money to set up, always prefer an option that improves your cash flow and global reach.

Frequently Asked Questions (FAQs)

What is the pocket-friendly way to send international payments?

Online payment gateways, fintech platforms, and real-time payment networks are usually more cost-effective than traditional bank transfers. They have better exchange rates and lower intermediary fees. Such features make them a cost-effective option for businesses.

What makes international payments so expensive?

International payment costs increase due to multiple factors. These include bank charges, foreign-exchange markups, intermediary banks, and processing fees. Sometimes they are hidden, but together, they all make traditional cross-border transfers expensive.

Can businesses completely bypass currency conversion fees?

Not always. However, there are some ways to cut down these charges. For instance, a business can use multi-currency accounts, local payment methods, or consolidate the payments.