Key Takeaways
- Business payments to Europe can be expensive, especially due to FX costs.
- You can reduce fees by choosing a payments platform with full support for EUR-USD transfers, multi-currency balances, and transparent FX rates.
- Modern trading platforms like Payset can help you lower your costs.
Introduction
US businesses pay European suppliers whenever they import goods or services, which is an increasingly common arrangement with the rise of global supply chains.
Until now, your business has likely focused on the cost of transfer fees in these transactions. However, significant expenses often come from converting funds between euros and US dollars — a cost that’s part of every USD-to-EUR business payment.
The true cost is driven by foreign exchange (FX) markups and exchange rate spreads, including hidden fees, non-transparent pricing, and unpredictable rate changes, plus intermediary banking charges that are indirectly passed on to end users.
In a single payment, this might not be noticeable. But over time, inefficient FX pricing can steadily erode your revenue and profit margins.
At Payset, we address this challenge with access to transparent FX rates and a variety of other services, helping you pay European suppliers from the US with ease.
Why US Businesses Overpay On European Supplier Spending
Currency conversion is often unavoidable. American and European businesses tend to use their local currencies, the US dollar and the Euro, for local payments.
This means that if your US company starts with USD on hand, it needs to convert funds to EUR before or during international supplier payments to/from Europe.
Costs can skyrocket when changing currencies because you don’t get the true mid-market exchange rate. Instead, many traditional banks charge high markups and spreads, and you receive fewer Euros for every Dollar that you spend.
Some European suppliers accept USD as a form of payment, meaning any conversion costs fall on the supplier, not the payer. However, this is fairly rare, and you should generally expect to pay conversion costs if you work with international suppliers.
That means your US business should seek out payment providers with the most affordable FX rates, which will let you convert USD to EUR with minimal loss.
FX Rates vs Transfer Fees: What Actually Impacts Costs?
Transfer fees are a highly visible cost, but FX rates aren’t always easy to see. Let’s look at how this works in a cross-border SWIFT wire transfer.
Basic international wire transfer costs are usually billed as a flat rate. For example, if you’re performing a SWIFT transfer to Europe, you might pay 10-50 USD or more.
The wire transfer may also require currency conversion. You can expect to lose around 1% to 3% of the transfer value to FX spreads. This means that a $10,000 payment could cost an additional $100 to $300, or even more for larger transactions.
If the bank converts during the transaction, those FX costs may not be visible. You’ll only see the USD that comes out of your account — and the recipient will only see the EUR they receive. There’s often no line item showing the conversion cost.
You may be able to estimate conversion fees by referring to your bank’s rate calculator, but this does not always provide the precise FX fees applied to the transfer.
Traditional Banks vs. Modern International Payments
Fortunately, traditional banks and their wire transfer services are no longer your only option. There are better ways to make EUR payments for US businesses.
Modern alternatives tend to offer more ways to make cross-border business payments. You’ll get access to multi-currency business accounts, local European networks like SEPA, and strong FX tools that give you more insight and control over exchange rates.
Here’s a full breakdown of what you can typically expect from each service type:
| Traditional banks | Modern payment platforms | |
| FX transparency | Partial – Rates are usually not transparent at trade time | Strong — Often provide real-time FX rates during trades; may offer tiered rates |
| International payment speed | Standard times – Generally route US-EUR transfers via SWIFT (approx. 1-3 days) | Faster payment rails – May support faster transfer methods like SEPA for euros (not just SWIFT) |
| EUR payment support | Limited – USD is converted to EUR during transfer; may offer second EUR account | Diverse – Single multi-currency business account can convert, hold, or spend EUR balance |
| Other multi-currency features | Limited – May offer secondary EUR accounts or foreign currency accounts | Strong – Generally offer support for several currencies |
| Onboarding process | Intensive – May require in-person branch visits and plenty of documentation | Streamlined – Can usually be completed fully online with basic documentation |
| Account approval times | Longer wait times – Potentially days or weeks | Fast – Typically 1-3 days |
Why US Businesses Often Use Multi-Currency Accounts
US businesses frequently use multi-currency accounts when paying European suppliers because they allow for more flexible use of funds.
Whereas most US dollar bank accounts typically convert inbound EUR to USD upon receipt, multi-currency accounts give you the option of holding and spending EUR without conversion. This saves on FX fees when you transact in the European market.
Multi-currency accounts also give you the ability to convert between EUR, USD, and other currencies as needed — giving you greater control over the timing and structure of your trades and potentially providing access to better FX rates.
Broadly, this allows your company to pay European suppliers from the US with fewer costs and challenges. That means easier invoicing, simpler cash flow, and streamlined day-to-day operations on top of potential savings from better FX rate models.
How US Businesses Can Reduce FX Costs When Paying European Suppliers
Your business can reduce foreign exchange costs with several strategies. In most cases, the goal is not to eliminate FX costs entirely, but to reduce how often you convert currency and to execute conversions with a greater level of control.
Plan Out and Group Your FX Trades
One of the most reliable strategies is planning your trades. Grouping your FX conversions can help you perform fewer, but larger, transactions overall.
This can avoid flat fees on each transaction, and it can also help you meet trading volumes and qualify for discounted rate tiers offered by companies like Payset.
And if you make EUR-USD trades in both directions, performing fewer conversions will save on spread costs that cut into the amount you get on every trade.
Hold and Spend Inbound Euros
Another way to save money on FX trading is to hold and spend euros that you receive without converting the amount to US dollars.
It’s a highly efficient way to avoid currency conversion costs, and it’s simplified by multi-currency business accounts that support EUR balances. However, it works best if you have a source of inbound euros from buyers, not just suppliers.
Time Your FX Trades and Transactions
Converting USD to EUR at transaction time isn’t always the most cost-effective strategy. Timing your transfers can help you save money on each conversion.
This may allow you to exchange currencies when rates are most beneficial. While it’s difficult to time the market consistently, your business may be able to get more efficient FX rates when one currency is clearly in a stronger position.
Use the SEPA Network
Multi-currency business accounts often provide access to SEPA, which doesn’t support USD but allows for Euro transfers at a lower cost than SWIFT.
This feature is available at Payset. We allow users to hold Euros in their accounts, and we automatically route funds via SEPA or local options when possible. Note that this reduces your transfer costs and does not necessarily reduce FX costs.
How Payset Supports Global Supplier Payments
At Payset, we support global supplier payments by providing multi-currency accounts, access to top networks like SWIFT and SEPA, and competitive FX pricing.
Our service model includes transparent FX pricing and tiered rates so that you get better pricing the more you trade, calculated from your 90 day average volume. We’ll even lock in your premium rate for 30 days once you qualify for any tier.
Transact like a local with Payset. Send and receive money in 180+ countries, exchange 38 currency pairs instantly, and hold 34 currencies in your account.
FAQ
What are FX fees in international payments?
FX fees are the costs you pay to exchange USD for EUR (or other currencies), including the spread, markup, embedded costs, and other expenses.
What are FX markup fees?
FX markup fees are the additional costs built into the exchange rate set by your bank or account provider. You can save money by finding a service with low markup fees.
How can you reduce FX costs for businesses?
You can reduce FX costs with several methods, such as arranging payments to qualify for rate tiers or holding foreign currencies to reduce your overall trading activity.
Should US businesses use multi-currency accounts for supplier payments?
It’s often a good idea to use a multi-currency account if your suppliers are in another country or do not use the US Dollar. Multi-currency accounts can make conversion and spending more affordable and flexible, allowing you to save on FX if used effectively.
