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For a growing number of businesses, the ability to make smooth and secure international payments is essential. Whether you're paying overseas suppliers, or working with remote teams, the way you process international payments can make all the difference.
The method you use determines where you can send money and how long it takes for the recipient to receive payment. By understanding which payment methods are required for which international invoices, you can predict payment schedules and expenditure. It also allows you to set clear expectations with overseas suppliers, arranging payments in advance to guarantee timely transactions.
Contents of this guide:
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The international payment method will be depend on where you’d like to send money, and in which currency:
Please note, if you are using Telleroo to make international payments - these payment methods are automatically chosen based on your requirements when you are sending a payment. You are always shown the costs before sending.
When working with a new supplier or remote team member, you might have the ability to choose the currency you’ll pay them in. Here are key factors to think about when deciding whether to pay in local currency:
| Method | Location | Currency | Speed | Costs |
Here are some examples:
Benefits of SWIFT
Drawbacks of SWIFT
Benefits of SEPA
Drawbacks of SEPA
Benefits of ACH
Drawbacks of ACH
SWIFT stands for the Society for Worldwide Interbank Financial Telecommunication.
Founded in 1973 by 239 banks from 15 countries, the SWIFT banking system was established as a global cooperative to address a persistent issue: how to securely send financial information for cross-border payments1.
The SWIFT network is a system that allows banks to communicate securely via its financial messaging services. It's a global solution that now connects over 11,000 financial institutions in more than 200 countries1.
But what does this actually mean?
SWIFT itself does not take or transfer your money. The SWIFT network lets banks send instructions to each other to send money internationally between accounts.
For example, if you wanted to send money from your HSBC account to someone with a BNP Paribas account, the SWIFT network lets the two banks communicate to facilitate the payment.
There is a difference between who has access to the SWIFT system and those that can benefit from SWIFT payments.
You can join SWIFT2 as a:
However, businesses and individuals can use SWIFT as a payment method via:
Although SWIFT connects over 200 countries, it's important to check with your bank or payment provider to see which countries you can send money to.
They may have a list of approved countries to which you can make payments. You can find approved countries per currency here for Telleroo.
When you make a payment, the SWIFT network sends payment orders (instructions) to the required banks, using SWIFT codes.
When you're using SWIFT as an international payment method, you'll need to provide SWIFT or BIC codes. This code details which account you're wanting to send money to.
You might see different names for these codes; SWIFT code, SWIFT BIC or SWIFT ID. They all mean the same thing!
A BIC code consists of 8-11 characters and identifies your country, city, bank, and branch3.
As standard, you'll see an 8 character code consisting of:
An 11-character SWIFT/BIC code identifies a specific part of a business, like a particular location, department, service, or unit within the same country. After the 8 characters above, there are 3 extra characters:
Your bank will hold details of your SWIFT code. You can also use one of the various online SWIFT search tools.
SWIFT payments usually take 1–6 working days to reach their destination, however, it is possible that they can take longer due to time differences between the sending and receiving country, or multiple intermediary banks involved with delivering your money.
It is important to be aware that SWIFT payments often incur fees and can be subject to varying exchange rates. Fees can include charges imposed by the sending bank, intermediary banks, and the receiving bank. Additionally, the exchange rate applied to the transaction may differ from the mid-market rate, potentially affecting the total cost. Therefore, it's advisable to check with your bank regarding the fees and exchange rates beforehand to avoid any surprises.
When you make a SWIFT payment with Telleroo, there is a £15 transaction cost that will be included on your usual monthly invoice. This is to pay the corresponding bank fees upfront, thus reducing the likelihood of any bank taking money from the transfer along the way.
As an example, here are the steps to make a SWIFT payment using Telleroo.
For every international currency, we will always flag on the page when you're making a payment using SWIFT. For every SWIFT payment, you can see how much you're paying in advance before you send a payment.
Discover more about Telleroo's SWIFT payment feature here. You can also allow team members to approve international payments, and see the status of your payment within Telleroo.
SEPA stands for Single Euro Payments Area.
SEPA was an idea that started in 1999, and was brought into reality in 2008 by the European Payments Council4. The aim being to make it easy and convenient to send Euro payments across Europe, similar to how you can make payments within your own country5.
The SEPA system allows you to make one-off and direct debit payments. These are split into three types; credit transfers, instant credit transfers and direct debit.
You can make a SEPA payment as a business or individual via:
As of January 2023, you can send to 36 countries using SEPA6. Here is a SEPA countries list:
It's important to check with your bank or payment provider to see which countries you can send money to. They may have a list of approved countries to which you can make payments. You can find approved countries per currency here for Telleroo.
Every bank account in a SEPA country is assigned an IBAN code. To send a SEPA payment, you need the IBAN codes of all accounts involved.
IBAN stands for International Bank Account Number. It’s an extra number linked to your account, enabling international banks to accurately identify it.
An IBAN code consists of 34 characters and identifies your country, check number, bank code, sort code and UK account number7.
The 34 characters consist of:
Your bank will hold details of your IBAN code. You can also use one of the various online IBAN search tools.
SEPA payments usually take 1 working day. However, it is possible that they can take up to 2 working days.
To comply with regulations, banks must charge you the same rates for domestic and cross-border Euro payments. In addition, countries like Sweden and Romania have opted in to apply this to their national currency. They must also inform you about the costs of converting a currency upfront, before you make a payment8.
You may find that sending SEPA payments within your bank account is free. It depends on your banking institution and account.
If you are using a payments provider, like Telleroo, you will also see separate charges for SEPA payments.
As an example, here are the steps to make a Swift payment using Telleroo.
For every SEPA payment, you can see how much you're paying in advance before you send a payment.
To make SEPA payments in bulk, you can select Xero invoices in Telleroo and create a pay run.
Discover more about Telleroo's international payment feature here. You can also allow team members to approve international payments, and see the status of your payment within Telleroo.
ACH stands for Automated Clearing House.
ACH was launched in 1974, and is governed by Nacha (National Automated Clearing House Association)9. The aim being to provide secure, fast payments across U.S. bank and credit union accounts10.
ACH is a US-based network for processing electronic payments, including direct deposits and direct payments. It's commonly used for domestic transfers within the United States.
In 2023 alone, 31.5 billion payments were sent via the ACH network, totalling $80.1 trillion10.
Nacha does not process the payments itself. It governs the ACH network to ensure payments are compliant with Nacha Operating Rules and Guidelines11.
You can send money to U.S. bank and credit union accounts.
When making an ACH payment, there are five parties and steps involved11:
This process is the same for debits. For example, a Gym provider would be the 'Originator'. Their request for your gym membership would pass to their bank, and subsequently the ACH Operator. Your bank, as the Receiver, would withdraw the money from your account.
Every bank in the U.S. is assigned routing numbers, and to make ACH payments you will need the bank's routing number.
There are four different routing numbers, for different payment types. They are nine-digit codes.
Your bank will hold details of their routing numbers. You can also use one of the various online ACH Routing Number search tools.
ACH payments can be received on the same-day they are made, but in some cases can take up to two days. Nacha estimates that 80% of ACH payments are processed within one banking day or less11.
The Association of Finance Professionals (AFP) found that the median cost for businesses to send and receive ACH payments is between 26 to 50 cents12. If you are using a payments provider, like Telleroo, you will also see separate charges for ACH payments.
As an example, here are the steps to make an ACH payment using Telleroo.
For every ACH payment, you can see how much you're paying in advance before you send a payment.
You can also allow team members to approve international payments, and see the status of your payment within Telleroo.
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