7 hidden costs of paying overseas suppliers through banks

1. Bank transfer fees are only a portion of the total cost

International wire fees are generally presented as flat amounts. Public U.S. business fee schedules list Wells Fargo digital wires at $25, Chase online international USD wires at $40, and U.S. Bank international USD wires at $35–$45, depending on the service.

Those figures are only the fees charged by the sending bank. Other financial institutions involved in processing may apply separate charges. A ‘$25 international wire fee’ therefore does not represent the total cost.

Wells Fargo Business Online Wires ↗Chase Business Fee Schedule ↗U.S. Bank Enhanced Payments ↗

2. The margin embedded in the exchange rate must be calculated separately

When a bank converts currency, it generally applies its customer rate rather than the reference rate visible in the market. The difference is the exchange-rate margin, or FX spread.

For example, if there is a 0.7% difference in the applied exchange rate while exchanging money worth 20,000 dollars, the exchange cost is about 140 dollars. If the transfer fee is $25, the actual direct cost is already $165.

The actual spread varies by bank, currency, payment amount, relationship and negotiated terms, so use the live quote for the transaction. A bank may waive its wire fee while retaining an FX margin. ‘No wire fee’ is not the same as ‘no transaction cost.’

Wells Fargo Business Account Disclosures ↗Bank of America Business Fees ↗

3. Intermediary and receiving-bank deductions can leave the supplier short

One or more intermediary banks may sit between the sending bank and the receiving bank. The three common charge options are OUR, SHA and BEN.

• OUR: The sender bears the fee.
• SHA: The sender and recipient each bear the fees incurred.
• BEN: Recipient bears the fee

In SHA or BEN arrangements, fees may be deducted from the amount the supplier receives. Even when the invoice is $20,000, less than that may reach the supplier’s account.

Choosing the OUR option does not guarantee that the full contract amount will arrive on every route. HSBC notes that some payment systems may not recognize an OUR instruction and that intermediary or receiving-bank fees may still be deducted from the transfer amount.

This may result in tasks such as confirmation of receivables, remittance of the difference, correction in the next transaction, and confirmation of responsibility between the sender and recipient.

HSBC International Transfer Charges ↗

4. Reaching the receiving bank is not the same as reaching the supplier

International wires do not always take several days. SWIFT reported in 2025 that 75% of payments moving across its network reached the beneficiary bank within 10 minutes.

The problem occurs after arrival at the receiving bank. SWIFT analyzed that an average of 80% of the total international payment journey time occurs in the ‘last mile’ after leaving the network. This includes the receiving bank's internal processing, local payment infrastructure, regulatory checks and direct deposit procedures.

The point in time for the importer to check is not when the remittance instruction reaches the receiving bank, but when the funds are actually available to the supplier. This timing may vary depending on country, currency, banking hours, public holidays, regulatory review and accuracy of information entered.

SWIFT Spotlight on Speed 2025 ↗

5. Payment exceptions create disproportionate time and labor costs

Most international transfers are processed without issue, but transactions that are subject to errors or regulatory checks may require significant time to resolve. According to 2025 data from SWIFT, inquiries or investigations may occur in approximately 1-3% of international payments.

• Missing payment information or error in recipient information
• Request additional information for regulatory compliance
• Check related to sanctions or anti-money laundering
• Inconsistency between remittance amount and invoice information
• Additional confirmation by intermediary bank

SWIFT explains that the average elapsed time to resolve one payment inquiry is approximately 200 hours. Complex international payment incidents can take an average of 14 days to resolve. This does not mean the employee will work for 200 hours straight, but rather the time from initial inquiry to final resolution.

In the meantime, the importer must contact the bank, explain the situation to the supplier, and retrieve the remittance confirmation and invoice data. Even if the probability of occurrence is low, the impact is not small if the transaction amount is large and the supply schedule is at stake.

SWIFT Exceptions and Investigations Report ↗

6. Settlement delays impact working capital and supplier relationships

Overseas suppliers often pay for product production, purchase of raw materials, shipping and labor costs first and then wait for payment. If the importer's payment arrives late, the supplier's working capital will be tied up longer.

OECD explains that international transactions typically take longer and involve more intermediaries than domestic transactions, and a lack of transparency can lead to payment delays and increased risk. In particular, small and medium-sized businesses with insufficient working capital capacity may be more affected.

• Supplier's production or shipment on hold
• Lost early payment discount opportunity
• Strengthening prepayment conditions for next order
• Deterioration of supplier credit conditions
• Repeated contact to confirm payment
• Increased need for safety stock and working capital

This cost will not show up as a transfer fee on your bank statement, but it will affect your actual trade operations.

OECD — Trade Finance for SMEs in the Digital Era ↗

7. Recurring payment administration is itself a cost

If there are multiple overseas suppliers, the person in charge can repeat the following tasks every month.

• Check supplier payment information
• Enter receiving bank and intermediary bank information
• SWIFT/BIC, IBAN and account number verification
• Compare invoice amount and payment amount
• Download payment approval request and remittance completion data
• Send proof of remittance to supplier
• Linking transaction details and accounting data
• Response to inquiries regarding non-arrival or deducted fees

It takes 45 minutes to prepare, confirm, and organize one remittance, and if you process 20 transactions per month, 15 hours per month are spent on payment work.

If your address book, recurring payment information, notifications, transaction history, and receipts are distributed across multiple systems, not only processing time but also the possibility of errors increases.

How to calculate the total cost of a bank wire

The actual cost of a bank transfer can be calculated by adding up the following items:

Hypothetical $20,000 supplier payment example

This example is not intended to determine actual bank prices. Because each company has different banking contracts, currencies, transaction amounts and remittance routes, you should use actual statements and exchange rate quotes. If you only look at the $40 transfer fee, the cost rate is 0.2%, but if you include other costs, the results may vary.

Bank wires are not always the worse option

There are certainly cases where bank transfer is more appropriate.

• When receiving preferential exchange rates and low fees from your bank
• When both the remitter and the supplier have USD accounts
• If there is a remittance route that is processed directly without an intermediary bank
• When a low-cost and integrated local payment network like SEPA is available
• When letter of credit, escrow or trade finance functions are required
• When the supplier is unable to receive or store USDC
• Cases where the on-ramp and off-ramp costs of alternative payment methods are higher

The World Bank reported that since the introduction of SEPA in the Western Balkan countries, the cost of international payments for some businesses has decreased significantly compared to the existing correspondent banking method. If a good bank or local payment network already works cheaply, there is no reason to force yourself to switch. The purpose of the comparison is not to rule out banks, but rather to see which method is more advantageous for a particular transaction.

World Bank — Cheaper and Faster Payments through SEPA ↗

10 things importers should check before sending money abroad

Please record the items below before making your next supplier payment.

1. How much is the transfer fee indicated by the bank?
2. How different is the actual applied exchange rate from the standard exchange rate?
3. Are brokerage bank fees incurred?
4. Is there an additional deduction from the receiving bank?
5. What is the fee burden method: OUR, SHA, or BEN?
6. Does the supplier receive the full invoice amount?
7. How long will it take before the funds are actually available to suppliers?
8. How many minutes do you need to prepare and confirm one transfer?
9. Are payment proofs and transaction details managed in one place?
10. Can you immediately check the current status when a problem occurs?

If you cannot answer this item, it is highly likely that you do not accurately understand the actual cost of overseas remittance.

Conclusion: compare the final outcome, not the advertised wire fee

The biggest loss in settling trade payments through banks is not the visible remittance fee.

• It is difficult to determine the total cost in advance
• The amount the supplier actually receives may vary.
• It is difficult to predict when settlement will be completed.
• Repeated payments and documentary management take time.
• When a problem occurs, it takes a long time to check and resolve it.

The Financial Stability Board defines the core goals of improving international payments as cost, speed, accessibility, and transparency. The 2025 report assessed that despite improvements in policy and infrastructure, global improvements felt by end users are still limited.

FSB — G20 Cross-border Payments Progress Report 2025 ↗

What are the total costs and time borne by our company and the supplier until the supplier receives the promised funds?

After answering these questions, you can decide whether bank transfer, local payment networks, or USDC-based payments are better for you.