BACK

Your Business Credit

How to cut your business’ foreign wire transfer fee costs

Summary

When selling overseas, you can’t make foreign wire transfer costs vanish, but you can negotiate their size, bundle your bills or bake them into your prices

The editorial content below is based solely on the objective assessment of our writers and is not driven by advertising dollars. However, we may receive compensation when you click on links to products from our partners. Learn more about our advertising policy.

The content on this page is accurate as of the posting date; however, some of the offers mentioned may have expired. Please see the bank’s website for the most current version of card offers; and please review our list of best credit cards, or use our CardMatch™ tool to find cards matched to your needs.

QuestionDear Your Business Credit,
I do some work for companies in Europe at my marketing firm. Is there any way to avoid the wire transfer fees when they pay me? On my last project, my invoice was for $400 and I ended up receiving $390 once the fee was subtracted. — Sandy

AnswerDear Sandy,
Those pesky wire transfer fees can add up over the course of the year if you do a lot of international work. I’ve been frustrated by them myself. The good news is that you can avoid some of these fees by planning ahead.

If you do a fair amount of overseas work, some clients will probably have policies in place in which they will pay you only by wire transfer. Choosing a bank that charges fees on the low end of the range for inbound foreign wire transfers (which average about $15 at larger banks) can save you a good amount of money over a year.

If you are a long-standing customer at your bank, ask if your banker can waive the fee for inbound wire transfers. While this isn’t a standard practice, a couple of entrepreneurs have told me their banker agreed to waive wire transfer fees in appreciation of their business.

Another solution is to ask your clients to pay the wire transfer fees when you are negotiating a gig. In lieu of this, some business owners simply charge higher prices when working with overseas clients, baking the wire transfer fees into their prices.

Or, for customers who have shown a good payment track record, you may want to invoice less frequently to reduce the number of times you are charged wire transfer fees. For instance, instead of sending five $1,000 invoices, send one for $5,000 — and pay one wire transfer fee instead of five.

You can also opt to accept credit cards, which will save you money in some cases. But in my own experience, large and midsize businesses generally don’t pay smaller creative services vendors by credit card. It’s more likely to be the very small clients that like this method.

In any case, for a small marketing firm that has only a few global clients who want to pay by credit card, I don’t think it pays to set up a merchant account, because you will have to pay fees to maintain it. You may be better off setting up an account through Square or PayPal.

Before you offer this option, do the math on the transaction to make sure you will actually save money this way. PayPal charges a 2.9 percent international transaction fee plus a 1 percent cross-border fee and/or 2.5 percent currency conversion fee.

Let’s look at your $400 job. The $10 you were charged was 2.5 percent of the $400. Using PayPal instead, you would pay up to 5.4 percent in fees, or $25.60. If you were at a bank that charges $30 for an inbound wire transfer, that rate would save you money, but given your bank’s $10 fee, PayPal would actually cost you more.

There are some new solutions popping up. I came across a startup in the U.K. called TransferWise that says it charges 0.5 percent to receive more than \xa3200 (about $325 at today’s exchange rate) and a \xa31 flat fee ($1.63) for smaller payments. Based on my own experience, it may be hard to persuade a large corporate customer to try a new service such as this. If you are serving very small businesses overseas, they may be more flexible. It could be worth testing this service on a smaller job.

See related:Options for accepting overseas payments expand for small business, How a Bangladeshi entrepreneur can pay for international purchases

 

What’s up next?

In Your Business Credit

Don’t travel? Opt for other business rewards

If you don’t travel much for business or pleasure, there’s no point in getting a small-business credit card that specializes in travel rewards. Instead, look for a cash-back card or one that earns rewards you can use.

Published: September 15, 2014

See more stories
Credit Card Rate Report Updated: May 19th, 2019
Business
15.61%
Airline
17.50%
Cash Back
17.60%
Reward
17.62%
Student
17.79%

Questions or comments?

Contact us

Editorial corrections policies

Learn more

Join the Discussion

We encourage an active and insightful conversation among our users. Please help us keep our community civil and respectful. For your safety, do not disclose confidential or personal information such as bank account numbers or social security numbers. Anything you post may be disclosed, published, transmitted or reused.

The editorial content on CreditCards.com is not sponsored by any bank or credit card issuer. The journalists in the editorial department are separate from the company’s business operations. The comments posted below are not provided, reviewed or approved by any company mentioned in our editorial content. Additionally, any companies mentioned in the content do not assume responsibility to ensure that all posts and/or questions are answered.