Key takeaways:
- International business payments cover everything from paying overseas suppliers to receiving money from clients abroad, and each route (SWIFT, SEPA or a third-party provider) comes with its own costs and timings.
- The advertised transfer fee rarely tells the full story - exchange rate margins and correspondent bank charges often make up the bigger part of the real cost.
- Sending money overseas can carry VAT and tax reporting implications, so it's worth checking your position with an accountant if your set-up is complex.
- As your international activity grows, it's worth checking your business account actually supports it - from receiving multiple currencies to keeping fees down.
What are international business payments?
International business payments cover any money that crosses a border for business purposes. That could be paying an overseas supplier for stock, receiving payment from a client based abroad, or transferring funds to a subsidiary or partner overseas.
As UK businesses trade more globally, these payments become a regular part of running things day to day rather than a one-off. That makes it worth understanding how they actually work, what they cost, and what your business bank account needs to support as your international activity grows.
If you use our Business Rewards Account, you can make international payments in US dollars (USD) and euros (EUR) with no extra charge from Allica.1
How do international business payments work?
SWIFT transfers
SWIFT is the network most banks use to send money internationally. It's reliable and widely accepted, but it can involve one or more correspondent banks along the way - and each one can add its own fee or eke out a little bit of margin. That's why a SWIFT payment can sometimes take a few days to land, and why the amount that arrives isn't always what you'd expect from the amount sent.
Domestically, most UK businesses are more used to BACS payments, which settle within a few days between UK accounts. SWIFT works on a similar principle, just with more banks involved along the route.
SEPA payments within Europe
SEPA (the Single Euro Payments Area) allows businesses to send euros between participating European countries, usually quickly and at low cost. Since Brexit, UK businesses can still use SEPA, though it's typically only relevant when you're paying or receiving in euros with a business based in a SEPA country. If most of your trade is outside the eurozone, you're more likely to be relying on SWIFT.
Third-party international payment providers
Providers like Wise have become a popular option alongside - or sometimes instead of - a business's main bank, particularly for businesses that send money overseas often. They can offer competitive exchange rates and clear, upfront fees, which is why some banks now build this kind of technology directly into their business accounts rather than leaving customers to manage a separate provider.
The real cost of international money transfer for businesses
The fee you see advertised is rarely the full cost of an international transfer. Three things usually make up the real total:
- Exchange rate margins - the difference between the rate you're given and the true market rate.
- Transfer fees - a flat charge, a percentage of the amount sent, or both.
- Correspondent bank charges - extra fees added by banks along the SWIFT network, which aren't always visible upfront.
For a business making occasional international payments, this might only add up to a small amount. For one making regular overseas payments, these costs can add up significantly over a year.
Exchange rates and foreign exchange (FX) risk
There's a difference between the mid-market rate (the true, real-time rate you'd see on Google) and the commercial rate a bank or other financial provider gives you. That's because their rate usually includes a margin.
If your business sends or receives money overseas regularly, exchange rate volatility can affect what you actually pay or receive month-to-month, which is worth factoring into your both your pricing and budgeting.
Transfer fees and hidden charges
Fees can be charged as a flat amount, a percentage of the transfer, or both - and that's before any charges the receiving bank applies at the other end. It's worth asking your provider for a clear breakdown rather than relying on the headline fee, since that's rarely what ends up coming out of your account.
Tax implications of sending money overseas as a UK business
Sending money overseas as a UK business can bring VAT and tax complications, depending on what you're paying for and where the money's going. This might include how VAT applies to international transactions, whether withholding tax applies in the recipient's country, and what you need to report to HMRC.
Rules will vary depending on your situation, so if your business has more complex international arrangements, you should develop a proactive plan with your accountant. It's also worth checking directly with HMRC, rather than assuming the same approach applies to every payment.
What to look for in a business account for international payments
As your business starts trading internationally, it's worth checking your account can keep up. There's a wide range of business bank accounts you can compare. The gap between what a traditional bank and a challenger bank offers on international payments can be bigger than you'd think.
1. Making international payments efficiently
On the outgoing side, look for same-day processing where possible, competitive exchange rates, and the ability to send payments without leaving your usual banking platform. Integration with your accounting software and clear limits also make a real difference to how much admin international payments create for your team.
2. Receiving international payments into a UK business account
If you're regularly paid by clients overseas, check what currencies your account can receive, how conversion works, how long it typically takes, and whether there's a fee for receiving money from abroad. These details vary more between providers than businesses often expect.
3. What businesses often get wrong when choosing a business account for international payments
It's easy to focus purely on price when comparing accounts, but businesses often overlook things like how quickly payments actually settle, whether the account can keep up as international volume grows, or how much support is available if something goes wrong with a transfer. If you're opening a new business bank account, it's worth checking what documents you'll need in advance, particularly if your business has international ownership or trading relationships.
Bonus point: international card spend
If you travel abroad for business, a quick trip can become a big expense if your card isn't equipped for international payments. Some banks will charge an international usage fee on each transaction.
Our Business Rewards Account doesn't charge any fees for spending on your card abroad. Your payments are made using the Visa exchange rate, which you can compare against the European Central Bank rate to see how it stacks up.
If you're withdrawing cash, you should check whether the machine charges its own fee and whether it encourages you to use its own (often much more expensive) currency conversion. It's best to use the local currency for payments abroad, as you can be sure we won't charge a fee.
How Allica Bank supports international business payments
Our Business Rewards Account handles international payments through Wise, giving established businesses a straightforward way to send and receive money abroad without needing a separate provider.
There are no fees for spending on your card abroad, and you'll have a dedicated relationship manager on hand if you need support with how it all works for your business. Find your local Allica relationship manager here.
If you're thinking about switching business bank accounts, our team can help you understand exactly what to expect before you make the move.
International business payments FAQs
What is the best business bank account for international payments in the UK?
There's no single answer, since it depends on how often you pay or receive money abroad, which currencies you deal in, and how much support you need. Look for competitive exchange rates, transparent fees, fast processing, and an account that can grow with your business, rather than picking based on one headline feature alone.
Do I need a separate international business bank account?
Not necessarily. Many businesses can manage international payments through their main business current account, especially if overseas activity is occasional. If you're sending or receiving money abroad frequently, or in multiple currencies, it may be worth checking whether your current account can genuinely support that volume before assuming you need something separate.
Can I hold foreign currency in a UK business bank account?
Some providers offer multi-currency functionality, allowing you to hold balances in currencies other than pounds. If this matters to your business, it's worth asking any prospective provider exactly which currencies they support, how conversion is handled, and whether there are any extra costs involved.
How long do international business payments take?
It depends on the route. SWIFT payments can take a few days, particularly if multiple correspondent banks are involved. SEPA payments within Europe are usually quicker. Third-party providers can sometimes be faster still, depending on the currency and destination. If timing matters for a specific payment, it's worth checking processing windows with your provider in advance.
What information do I need to make an international business payment?
You'll typically need the recipient's IBAN (or local account number), their BIC/SWIFT code, their full name and address, and the amount and currency you're sending. Some countries or currencies have additional requirements, so it's worth checking with your bank or provider before sending a payment for the first time to a new destination.
Ready to see how your business banking could work harder for you internationally?
Find out more about our Business Rewards Account, which includes USD and EUR payments.1
1 International payments are processed by Wise. Wise transfer fee and exchange rate applies. No Allica Bank fees. Allica won't charge any additional fees. Fees will be higher if sending via SWIFT network – see more about our account fees and limits.
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Disclaimer: This is information – not financial advice or recommendation.
The content and materials featured in this article are for information and education only, and are not intended to take into consideration any particular recipient’s financial situation. The product details referred to are correct at the time of writing. The information does not constitute financial advice or recommendation and should not be considered as such.
