You hired a developer in Kraków, your packaging comes from a factory outside Ho Chi Minh City, and the Shopify agency that built your storefront sits in Cebu. Three vendors, three currencies, three different ways the money has to move. For many small businesses, paying overseas suppliers, contractors, and agencies is now part of regular operations.

This page covers what a cross-border payment actually costs, how long it takes, what information you need to send one, and how to pay foreign contractors without creating a tax problem for yourself. It is informational only and is not financial, legal, or tax advice; consult your own advisors before acting on anything below.

What Counts as an International Business Payment

An international business payment is any transfer where the sender and recipient are located in different countries and usually deal in different currencies. The mechanics differ from a domestic ACH or wire in three ways that matter for your bottom line:

1. Currency conversion. Unless you and your supplier both hold the same currency, somebody is converting USD into VND, PLN, PHP, or whatever the recipient banks in. The exchange rate used is rarely the rate you see on Google.
2. Intermediary banks. Money rarely travels directly between a US bank and a Vietnamese bank. It hops through one or two correspondent banks that have relationships with both. Each one can take a cut.
3. Longer settlement. Domestic ACH clears in one to three business days. A cross-border wire can take one to five, and an international ACH can take longer. Time zones, weekends, and compliance checks all extend the window.

Everything else on this page (methods, costs, timing, paperwork) flows from those three differences.

What Are the Main Methods for Sending International Business Payments?

There are four ways small businesses actually move money across borders. Each has a use case.

International wire (SWIFT)

A SWIFT wire is the default for larger or one-off payments. SWIFT itself is a messaging network, not a money-movement system: the message tells the receiving bank what is coming, while the actual settlement happens through correspondent bank accounts. International wire transfers typically settle in 1-5 business days and route through the SWIFT messaging network. They are fast and reliable, but they are also the most expensive option per transfer.

International ACH (Global ACH, IAT)

International ACH is also called Global ACH or IAT, which stands for International ACH Transaction. It is the cross-border cousin of the domestic ACH you already use for payroll. International ACH is generally cheaper than a SWIFT wire but slower, typically settling in 3-5 business days. Not every country and not every receiving bank supports inbound IAT, so confirm with the recipient before you set up a recurring run.

Third-party platforms

Third-party platforms such as Wise, Payoneer, and PayPal may use local banking partners, wallet balances, or other payment rails instead of sending every transfer through the traditional SWIFT correspondent chain. Pricing models differ by provider: some publish a separate transfer fee with a mid-market exchange rate, while others bake margin into the rate. For a small recurring payment, such as a $1,200 monthly freelancer retainer, these platforms may cost less and arrive faster than a wire, depending on provider and corridor. Some fintech platforms (including Novo) build these rails directly into the dashboard, so you do not have to manage a separate account.

Cards

For SaaS subscriptions, small one-off purchases from international vendors, or online ad spend, a business debit or credit card is the simplest route. Depending on your card, you may pay a foreign transaction fee, often around 1-3%, and the card network handles the conversion. Check your cardholder agreement before using a card for recurring international purchases. Cards do not scale for paying suppliers or contractors, but they are fine for a $40 software bill.

Paper checks and money orders exist, but they are slow, hard to track, and frequently rejected by receiving banks.

What Does an International Business Payment Cost?

The sticker price your bank shows you is not the full cost. A cross-border payment has four cost layers.

1. Outgoing wire fee

This is the line item your bank tells you about. Large US banks commonly charge $35-$50 per outgoing international wire, plus an FX markup added on top of the mid-market exchange rate.

2. FX markup

The biggest hidden cost on most international payments is the spread between the mid-market exchange rate (the rate two banks use with each other, visible on xe.com) and the rate your bank quotes you. A 2% markup on a $5,000 payment is $100, which dwarfs a $45 wire fee.

3. Intermediary bank deductions

Intermediary (correspondent) banks can deduct fees in transit on a SWIFT wire, so the recipient may receive less than the sender sent. Each correspondent in the chain can take $15-$30. A payment routed through two intermediaries can arrive $50 short or more, and your supplier will ask why.

4. Receiving bank fees

The recipient's bank may also charge an inbound fee. This is out of your control, but worth knowing about so you can agree upfront on who absorbs it.

Worked example: a $5,000 supplier payment

You send a $5,000 principal payment from a large US bank to a manufacturer in Vietnam, and your bank charges the wire fee separately to your account.

• Wire fee charged separately by your bank: $45
• FX markup of 2% applied to the $5,000 conversion: $100
• Intermediary bank deduction in transit: $25
• Recipient bank inbound fee: $10

After the FX markup and the two deductions inside the payment path, the supplier receives the VND equivalent of roughly $4,865. Your total cost to move the money is $180: $45 paid separately to your bank, plus $135 lost inside the transfer. That is about 3.6% of the principal. On a recurring monthly payment, that is over $2,100 a year per supplier.

How Long International Payments Take

Wires are the fastest of the bank-rail options. A wire to a major European or Asian financial center can land same-day or next-day. A wire to a smaller economy with fewer correspondent relationships can take the full five business days.

International ACH takes 3-5 business days as a baseline, sometimes longer when the receiving country's local clearing system is slower or has a national holiday.

Common reasons a payment stalls:

• Time zones. A wire initiated at 4pm New York time on a Friday will not start moving until Monday morning in Asia.
• Compliance review. Large or first-time payments get flagged for AML screening at the sending or receiving bank.
• Wrong SWIFT/BIC or IBAN. A single transposed digit can send the payment into a manual review queue for days.
• Holidays. US holidays, recipient-country holidays, and intermediary-country holidays all stop the clock.

If your bank supports SWIFT gpi tracking, ask for the UETR (Unique End-to-end Transaction Reference), the 36-character code used to trace where a SWIFT payment is in the correspondent chain.

What Information Do You Need to Send an International Payment?

Gather these from the recipient before initiating the payment. Sending a wire missing one field is the most common cause of a multi-day delay.

• Recipient's full legal name and address as it appears on their bank account. "Nguyen Manufacturing" will fail if the account is registered to "Nguyen Manufacturing Co., Ltd."
• Recipient bank name and address.
• SWIFT/BIC code, the 8 or 11-character identifier for the recipient's bank.
• IBAN or local account number. Most of Europe, the Middle East, and parts of the Caribbean use IBAN. The US, Canada, Australia, and most of Asia use local account numbers plus the SWIFT/BIC.
• Purpose of payment code or description. Many countries (India, China, the Philippines, much of Latin America) require a stated reason for the payment for compliance.
• Your business details: legal name, address, and EIN.

To send an international payment, you typically need the recipient's SWIFT/BIC code and either an IBAN or a local account number, depending on the destination country.

International Wire vs ACH: Which Is Cheaper?

The short answer: international ACH is cheaper, international wire is faster.

A SWIFT wire usually costs $35-$50 at the sending bank plus FX markup and possible intermediary deductions. International ACH is often cheaper than a SWIFT wire, but the exact fee depends on the provider and destination country. It generally avoids SWIFT correspondent-bank deductions, though provider, receiving-bank, or local network fees may still apply.

Use a wire when:

• The payment is time-sensitive (closing a deal, paying a deposit to hold inventory).
• The receiving bank does not accept IAT.
• The amount is large enough that 2-4 day settlement risk matters.

Use international ACH when:

• It is a recurring payment to the same recipient.
• The recipient confirms their bank accepts IAT.
• The amount is under a few thousand dollars and you do not need it there tomorrow.

For monthly contractor retainers and standing supplier payments, the math on international ACH can compound. In a hypothetical example, a $40 difference per transfer across 24 monthly payments would total nearly $1,000 over a year. Actual savings depend on provider, destination, and amount.

How to Pay International Contractors

Paying a developer in Poland is operationally similar to paying a developer in Portland, with two extra steps: the money has to cross a border, and the paperwork has to satisfy the IRS.

Get the tax form first

Before the first payment, collect:

• W-9 from US-person contractors (US citizens, residents, or US entities).
• W-8BEN from non-US individual contractors. W-8BEN-E for non-US entities.

The W-8BEN is the foreign contractor's declaration that they are not a US person and not subject to US tax withholding on services performed outside the US. Keep the W-8BEN or W-8BEN-E with your contractor records, and confirm the current IRS validity and retention rules with your tax advisor.

Know what you have to report

US businesses must issue Form 1099-NEC to US-person contractors paid $600+ in a tax year; payments to non-US contractors generally require a Form W-8BEN on file instead, and typically do not generate a 1099-NEC. The IRS is interested in money paid to US taxpayers; payments to non-US persons for services performed abroad sit outside that reporting regime, provided you have the W-8BEN to prove it. Confirm your specific reporting obligations with a tax professional.

Pick the right rail

For recurring international contractor payments under $5,000, a platform-integrated or third-party transfer service may cost less than a SWIFT wire, depending on provider and corridor. Wires make sense for larger one-off payments. For 10+ contractors on monthly payroll, what matters more than the per-transfer fee is whether your platform supports saved recipients and batch sends, so you are not re-entering SWIFT codes every month.

Keep records

Cross-border payments draw more scrutiny in an audit than domestic ones. For each contractor, keep the W-8BEN or W-9, signed invoices, and the payment confirmation showing the amount sent and the FX rate used.

How Can You Send International Payments From a Novo Account?

Novo business checking accounts (provided by Middlesex Federal Savings, F.A., Member FDIC) can send international payments to 80+ countries directly from the Novo dashboard, with the FX rate and per-transfer fee shown upfront before the sender confirms. The exchange rate, transfer fee, and recipient amount appear on the confirmation screen before you authorize the payment.

What that looks like in practice:

• Upfront FX and fee. Before you confirm, the dashboard shows the exchange rate, the per-transfer fee, and the amount the recipient will receive in their local currency.
• 80+ countries supported from the same Novo dashboard you use for domestic ACH, bill pay, and reconciliation.
• $0 monthly fee on a Novo business checking account. Novo integrates with Stripe, Shopify, and QuickBooks, which keeps payment activity and bookkeeping records connected.
• Wise powers the cross-border rails in the background. You initiate, track, and reconcile everything inside Novo.

One important limitation: Novo does not accept cash deposits. For businesses that primarily sell online or pay suppliers and contractors by bank transfer, the lack of cash deposits may not affect day-to-day payment operations. If your business also takes cash at a register, you will need a separate plan for that side of the operation.

To avoid hidden FX markups, compare the quoted exchange rate to the mid-market rate at send time and confirm any per-transfer fee is shown separately rather than baked into the rate.

Frequently Asked Questions

Can I send international payments from a US business checking account?

Yes. Most US business checking accounts support outgoing international wires, and many now support international ACH or platform-based transfers. The differences are cost, country coverage, and fee transparency. Novo, for example, supports outgoing payments to 80+ countries directly from the dashboard with the rate and fee disclosed before you confirm.

What's the difference between a SWIFT/BIC code and an IBAN?

A SWIFT/BIC code identifies the recipient's bank (8 or 11 characters, e.g., DEUTDEFF for Deutsche Bank in Frankfurt). An IBAN identifies the recipient's specific account within that bank (up to 34 characters, starting with a 2-letter country code). Most European, Middle Eastern, and some Caribbean destinations require both. The US, Canada, Australia, and most of Asia use SWIFT/BIC plus a local account number.

How do I avoid hidden FX markups on business payments?

Check the quoted rate against the mid-market rate (visible on xe.com or Google) at the moment of sending. If the rate you are offered is materially worse than mid-market, the difference is markup. Then confirm that any per-transfer fee is listed as a separate line, not buried in the rate. A provider that shows the exchange rate and transfer fee separately makes it easier to compare the quoted rate with the mid-market rate and identify any markup.

Do I need to report payments to foreign contractors to the IRS?

In general, you do not issue a 1099-NEC to non-US contractors performing services outside the US. Collect Form W-8BEN from non-US individual contractors or Form W-8BEN-E from non-US entities before the first payment so you can document their foreign status and determine whether reporting or withholding applies. Without the right documentation, you may need to evaluate whether nonresident withholding rules apply; consult a tax professional before paying a foreign contractor without a W-8BEN or W-8BEN-E on file.

Are international business payments tax-deductible as a business expense?

Payments to international suppliers and contractors for legitimate business purposes are generally deductible on the same basis as domestic ones. The wire fee, FX markup, and intermediary deductions are typically part of the cost of doing business and deductible as bank fees or part of the cost of goods sold, depending on what the payment was for. Keep the invoice, the payment confirmation, and the W-8BEN (for contractors) to substantiate the deduction, and confirm treatment with your tax advisor.

Disclosures

Novo Platform Inc. ("Novo") is a fintech, not a bank. Banking services provided by Middlesex Federal Savings, F.A., Member FDIC. Eligibility subject to final Novo determination.

Novo Platform Inc. ("Novo") strives to provide accurate information but cannot guarantee that this content is correct, complete, or up-to-date. This page is for informational purposes only and is not financial or legal advice nor an endorsement of any third-party products or services. All products and services are presented without warranty. Novo Platform Inc. does not provide any financial or legal advice, and you should consult your own financial, legal, or tax advisors.