Payments in Pesos and Pounds

31 Flavors … More or Less We’ve all been tempted with beautiful displays of ice cream in colorful arrays – with newly-introduced flavors to entice unsuspecting customers. Such is the world of multicurrency payments where tradition, culture, and anti-counterfeit measures have made the exchange of the Danish Krone and the Uzbekistani Som very colorful. Reality check: starting with USD, try to get Rupiah to a one-off supplier in Indonesia. This ‘Neapolitan experience’ may literally have you speaking Italian before you’re through. Vanilla Approach Despite the colorful offerings I often choose vanilla – providing it’s the real thing. In payments to Pakistan, if local bank accounts (holding rupee) have not been established by your organization, the vanilla approach is to execute a USD wire transfer. However, this approach is challenging in many ways. Not all countries accept USD wire transfers The recipient must have a bank account Wire fees can be charged by the originating bank, correspondent bank, and receiving bank – making this option impractical for lower-value transfers, AND making it unrealistic to satisfy a foreign-currency obligation in the exact amount of the billing. Adding to this challenge is:... Currency conversion (foreign exchange) is performed by the recipient bank at varying exchange rates – often with baked-in fees for their services. In short, USD wire payments are best suited for settling with established foreign vendors (some may even hold USD accounts), and with higher-value transactions. But what about everyone else? Other Flavors Satisfying vendor obligations in countries where our organizations do not hold funds in local currencies requires some creativity. By the time a true ‘international ACH’ service is available, our children may be using their phones to pay anyone anywhere in the world with handheld devices. Though the Jetsons’ picture phones are commonplace today, it remains challenging to settle foreign obligations beyond the use of local-currency accounts and USD wire transfers. Avenues to move funds globally must be considered within each organization’s required environment of control. Perhaps one or more of the following flavors will satisfy your foreign fund settlements: Cards. Settling a foreign-funds obligation with a card payment is more than convenient. With built in FX, and your organization’s controls around card issuance, limits, usage, approvals, and reporting – it is a preferred tool for foreign settlement. The card-accepting vendor gets quick credit and the obligation is settled back home in USD. AP Card Settlement. While cards can be used at the point of sale (as above) you might receive and process an invoice and rather than send a payment, send a single-transaction card number for vendor processing and satisfaction in their own currency. Your organization will be charged in USD, just as if a physical card were used. Bank Foreign Exchange. A service offered by some banks is the delivery of a local-currency wire payment in the proper amount – with the charge back in USD calculated and drawn from the paying business account after FX and fees are determined. The controls and delayed posting of the exact obligation cost (in USD) must be managed by the paying organization. Bank Foreign Draft. When the foreign payee does not have a bank account, a bank foreign draft might be the answer. A limited list of countries and currencies are served by certain banks who receive instructions from their US-based customer to deliver an actual foreign-currency draft to a recipient. That individual receives the draft by mail, and takes it to the bank to redeem it for their goods or services. Western Union Business Solutions. WUBS permits a web-based, credentialed connection to order/approve (under dual control) and deliver local-currency payments to payees with established local bank accounts. Western Union Quick Cash. When payees are un-banked but have access to a Western Union office within their country, the quick cash process through WU serves a niche function. PayPal and Pals. That’s right – PayPal … you know, that utility you use when your college freshman runs out of money or you need to pay your babysitter. PayPal offers specific business services including invoicing and settlements around the globe. In time, payments through Venmo, Square Cash, Google Wallet, Apple Pay, and the like may increasingly service a slice of the foreign-payment pie. Your Favorite Sundae There are many issues to consider, including payment confirmations/acknowledgements from the financial partner and proper notifications to the payees. Timing of payments, countries and currencies covered by each mechanism, process controls/risks/mitigations, managing disbursing bank accounts, reconciling transactions, loading data to the general ledger – and many more. However, if you are reading this it’s likely your job is to manage the "issues" and effectively navigate "nuisance FX payments" as required by your business commitments. In a recent Peeriosity Poll I sponsored, 76% of the companies indicated a preference for Bank Foreign Currency Wires when needing to get local-currency payments made beyond the reach of established banking accounts (see Figure below). You may be interested in some of the poll comments made by the companies participating in the research: Our company occasionally uses our Treasury department in pay immediate situations (wire transfers) to pay foreign suppliers not set up in our payables system. We utilize an in-house bank through our treasury group to process wires for a limited pool of foreign currencies. If payment is required in a currency outside that limited pool, we can ask the in-house bank/treasury to make an exception or we will work with Procurement and the supplier to have them re-invoice in USD. Currently, the only method being used by our company is the bank foreign currency wire. By using this method, there are no hiccups unless the banking information was entered incorrectly. Quick cash would probably be my second choice, but I am not aware of the fees associated with sending payments via this method. The overall goal would be to ensure that monies were received by the vendor in a timely manner to prevent additional costs. Primary method is Bank Foreign Currency Wire. Secondary method is via Intl FCStone's proprietary software "FXecute". Currently, we can only pay local currency with a wire payment. We are in the process of changing banks and will soon be able to make payments via SEPA, BACS and international ACH, along with wire payments. Conclusion While there are other means to deliver local-currency payments to foreign vendors without holding local-currency bank accounts, those listed above are common for one-off or so-called nuisance payments. Someday, the convenience, currencies and controls to make foreign-currency payments in exact amounts with pre-agreed FX and charges will become a reality. In the meantime, enjoy the flavors most likely to fill your appetite in settling foreign payments to your satisfaction. [inlinead] [Note: if you liked this article, please use the buttons on the left side of the screen to share it across your LinkedIn groups – and contribute to this discussion by posting your thoughts in the comment section, below. Thank you for being part of SSON's community - Barbara Hodge]

Payments in Pesos and Pounds

To continue reading this story get free access

Global Business Services (GBS) Events

Future of Finance & CFO Select Executive Leadership Summit

Shared Services & Outsourcing Week

Shared Services & GBS Select

Shared Services & GBS Select

Shared Services & Outsourcing Week

Shared Services & GBS Select

Follow Us

Latest Webinars

Chasing Clarity, Not Cash: Where AR Teams Lose Their Week

The Unstoppable Momentum of Deductions and Disputes: Using Agentic AI to Stem the Rising Tide

When AI Does the Work: Designing the New Human + AI Operating Model for Accounts Payable

Recommended

GBS Workforce Skills for the AI Era: What Matters Most?

AI Requires a Rethink of Pricing Models: Outsourcing

Transformation Tips For Effective Outsourcing

From AI Readiness to Human Leadership: Editor’s Reflections from SSOW Autumn 202...

Securing the Boardroom Seat for GBS: Mastering the Language of Influence

Why GBS Transformation Needs a Special Kind of Leader

The Future of Business Services

Why Service Portfolio and Catalog Are the Gateway to GBS.ai

Fearless Leadership in Uncertain Times

When to Switch BPO Providers and When to Fix the One You Have

Why BPO Relationships Plateau After Go-Live – And How to Prevent It

Reflections on Shared Services and Outsourcing Week Europe 2026

FIND CONTENT BY TYPE

SSON COMMUNITY

ADVERTISE WITH US

JOIN THE SSON COMMUNITY

Payments in Pesos and Pounds

To continue reading this story get free access

Global Business Services (GBS) Events

Follow Us

Subscribe to our Free Newsletter

Latest Webinars

Recommended

FIND CONTENT BY TYPE

SSON COMMUNITY

ADVERTISE WITH US

JOIN THE SSON COMMUNITY