Digital payments for business: methods, costs and how to choose
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Payment method, exchange rate and conversion timing all affect what a supplier payment costs by the time funds arrive. Yet many established importers rely on default bank setups without considering whether a better option exists for each corridor or currency.
As you pay the same suppliers month after month, FX margin and routing decisions become a recurring cost worth reviewing.
This article covers what UK importers need to know about digital payments for business, including the main payment methods, what each one costs and how to choose the right option for each transaction.
Key takeaways:
Not all payment methods suit every transaction, and Faster Payments, BACS, CHAPS, SEPA and SWIFT each serve different corridors and use cases at different costs and speeds
The FX margin is often the biggest factor in a cross-border payment, not the transfer fee, and it’s embedded in the rate rather than shown as a separate charge
SEPA is often faster and cheaper than SWIFT for EUR payments to European suppliers, but many UK importers default to SWIFT without checking if there is a more suitable option
Converting currency twice on the same trade cycle is avoidable, and holding balances in the original currency and paying suppliers directly from them cuts unnecessary FX costs
WorldFirst’s World Account lets UK importers hold, convert and pay in 20+ currencies, with FX margins of up to 0.5% on major currencies
Digital payments for business cover every non-cash method a company uses to send and receive money.
For UK importers, that includes domestic transfers to UK-based freight forwarders and warehouse operators, as well as cross-border payments to overseas suppliers in euros, US dollars or Chinese yuan.
The method you choose affects how quickly your supplier gets paid and what the transfer costs. A Faster Payment to a UK freight forwarder clears in seconds, while a SWIFT transfer to a supplier in China or Italy can take several days and involve fees you won’t always see upfront.
Payments also move in both directions. Supplier refunds, credit notes and marketplace payouts are paid back to you, and the currency they land in affects what your next outbound payment costs.
Main types of digital business payment methods in the UK
The payment method you use depends on whether you’re paying domestically or cross-border, what currency your supplier needs and how quickly funds need to arrive.
Payment method
Best for
Typical speed
Cost signal
Faster Payments
Domestic UK supplier payments, payroll
Near instant
Low to zero
BACS
Scheduled UK payments, direct debits
Three working days
Low
CHAPS
High-value same-day domestic transfers
Same day
Fixed fee
(~£20 to £35, indicative)
SEPA Credit Transfer
EUR payments to European suppliers
One working day (SEPA Instant: seconds)
Low
SWIFT
International payments in most currencies
One to five working days
Variable; intermediary fees apply
Open banking (A2A)
Domestic B2B invoice settlements
Often same day
Low
Virtual cards
Online supplier purchases, subscriptions
Instant at point of payment
FX fees on foreign currencies
Faster Payments
Faster Payments is the default rail for most routine UK business transfers. Pay.UK operates the scheme, and payments move between UK bank accounts in seconds, around the clock, with no fixed transfer fee on most business accounts.
Domestic supplier invoices to freight forwarders, packaging suppliers or UK-based logistics partners typically go through Faster Payments, and it’s usually the least expensive option.
BACS
BACS handles scheduled, recurring UK payments: payroll, standing orders and regular supplier runs. Settlement takes three working days, so it suits payments where timing is flexible.
CHAPS
CHAPS is the UK’s same-day high-value rail, operated by theBank of England. Suppliers that need cleared funds on a specific date can receive them the same day, provided the payment reaches your bank before its same-day payment deadline. This varies by bank but is typically between 2pm and 5pm.
There is no upper payment limit, which makes it the right option when a transfer exceeds your bank’s Faster Payments cap.
SEPA Credit Transfer
SEPA (Single Euro Payments Area) covers euro payments across 41 countries and territories. Paying German, French, Italian or Spanish suppliers in EUR via SEPA is often faster and cheaper than routing the same payment via SWIFT.
Standard SEPA transfers settle within one working day, whereas SEPA Instant settles within seconds where available.
The UK remains within SEPA’s geographical scope as a non-EEA member, but your payment provider controls the routing. Check with your provider before defaulting to SWIFT for European EUR transfers. On repeat orders, the difference in cost and speed can be significant.
SWIFT
SWIFT is the messaging network behind most cross-border international payments. It covers currencies outside SEPA’s reach, including USD, Chinese yuan (CNH), JPY and AUD, and connects banks across more than 200 countries.
Payments can pass through one or more correspondent banks along the way, each of which may deduct a fee before funds reach your supplier. Those deductions aren’t always disclosed before you confirm the payment, so the amount your supplier receives may differ from what you sent.
Open banking (account-to-account)
Open banking payments move funds directly between bank accounts, bypassing card networks. The Payment Systems Regulator supports the UK infrastructure.
Settling domestic supplier invoices this way can be faster and more cost-effectivethan paying by card. Cross-border use is still limited, so it works best when both you and your supplier hold UK accounts.
Virtual cards
Virtual cards are issued to a specific transaction, supplier or spending category. They work well for:
Paying online suppliers or platforms where a card is the only accepted method
Controlling spend by category or team member
Reducing exposure from sharing physical card details with international vendors
When the card currency differs from the transaction currency, FX fees apply. Check how your provider handles foreign currency spending before using a virtual card for overseas supplier payments.
What digital business payments actually cost
When you send a cross-border payment, the cost doesn’t always show up as a single charge. A typical international supplier payment can involve a transfer fee, an FX margin, intermediary bank deductions and a receiving bank fee at the other end.
Cost component
What it is
Typical range
Transfer fee
Fixed charge to send the payment
£0 to £35 per transfer
FX margin
The difference between the mid-market rate and the rate you’re quoted
0% to 3%+ of the transfer value
Intermediary bank fees
Deductions applied by correspondent banks mid-route
£5 to £35 per bank in the chain
Receiving bank fee
Charge applied by the supplier’s bank on arrival
£0 to £20
Note: Ranges are indicative and vary by provider, corridor and payment volume.
Domestic UK payments involve few or none of these costs, while SWIFT international transfers can involve all four.
Of the four components, the FX margin typically has the biggest impact on what you pay. A bank may advertise a low or zero transfer fee but apply a 2% to 3% margin to the exchange rate. For instance, a 2.5% FX margin on a £50,000 supplier payment adds £1,250 to the cost.
The Financial Conduct Authority has noted that many providers embed FX markups in the quoted rate rather than disclosing them as a separate charge. That guidance covers retail customers—business payments fall outside it, which means the importer has to do the benchmarking. Comparing your provider’s rate against theBank of England’s exchange rate data is the most reliable way to identify this cost before you approve the transfer.
Before sending a cross-border supplier payment, check:
The mid-market rate from a neutral source
The rate your bank or provider is quoting
The difference between the two, multiplied by your payment amount
The transfer fee and any expected intermediary charges
The difference between a bank’s rate and the mid-market rate may look manageable on a single invoice. Across repeat orders, deposits and seasonal stock runs, however, it adds up in ways that directly affect your landed cost and margin.
The video below explains how international transfer costs are structured and where the margin is typically applied.
Choosing the right payment method for your business means asking the same questions every time, regardless of which supplier or currency you’re paying in.
Before confirming each payment, check:
Is this domestic or cross-border? Domestic UK transfers go via Faster Payments for speed or BACS for scheduled runs. Cross-border payments need a separate assessment based on currency and corridor.
Which currency does your supplier invoice in? EUR payments to European suppliers may route via SEPA rather than SWIFT, which is faster and more affordable for the same destination. USD payments typically need SWIFT or a provider with access to US local rails.
How time-sensitive is this payment? A multi-day SWIFT transfer creates a supply chain risk if your supplier holds a shipment until cleared funds arrive. A provider with same-day local clearing in that market can help you avoid the delay.
What is the total cost, including the FX margin? Two providers with the same headline fee can differ by hundreds of pounds on a single payment because of the rate each applies.
Do you need payment tracking or invoice references? Some rails transmit limited remittance data. Check what your provider actually sends through before the payment goes out.
The double-conversion trap
Some of the most avoidable FX costs for UK importers come from converting currency twice within the same trade cycle.
A typical example: you receive US dollars from a marketplace payout or a US client. Your bank converts them to GBP automatically, because that’s your account’s base currency. A few weeks later, you need to pay a supplier in EUR or CNH. You convert from GBP again, paying FX costs on funds that only needed to move once.
The same pattern appears when a supplier issues a credit note in EUR, and you convert it to GBP, only to need EUR again for the following order. On a €4,000 credit note, a 2% to 3% conversion in each direction could add£140 to £210 before the invoice is settled.
Holding the balance in the original currency and paying the next supplier invoice directly from it removes both conversions entirely. On a €4,000 credit note, that’s up to £210 back in your margin rather than lost to unnecessary conversion. A multi-currency account is all you need.
Common digital payment mistakes UK importers make
A payment setup that worked when you started may not be the most cost-effective one now. The following patterns are worth reviewing:
Defaulting to SWIFT for all cross-border payments, even when a faster and cheaper alternative exists for that corridor
Accepting the bank’s quoted FX rate without checking it against a mid-market benchmark
Converting every incoming foreign payment to GBP immediately, which creates avoidable double conversions when the same currency is needed again within weeks
Paying CHAPS fees for non-urgent domestic transfers when Faster Payments would clear in seconds at no cost
Skipping payment references or invoice numbers, which makes it harder to match payments to invoices and creates reconciliation problems on repeat orders
How WorldFirst supports digital business payments
WorldFirst operates as an FCA-authorised Electronic Money Institution for businesses managing money across currencies and markets. It helps UK businesses send and receive payments across borders through international transfers, multi-currency accounts and FX.
With a World Account, you can receive and hold funds in 20+ currencies and pay suppliers in 100+ currencies to 210+ countries and territories where supported. FX margins on major currencies are up to 0.5%, and the account is free to open with no monthly fee.
Say you run a UK importing business that buys textiles from a Turkish supplier invoiced in EUR and components from a Chinese manufacturer invoiced in CNH. Each month, you fund your HSBC Business account in GBP, request SWIFT transfers and accept the bank’s FX rate.
On an illustrative €40,000 Turkish invoice at a bank FX margin of 2.5%, the currency cost alone is around £870 above mid-market. On a CNH 350,000 component invoice at the same margin, it’s around £950 more. Across those two payments alone, the FX cost above mid-market is around £1,820.
At a WorldFirst FX margin of up to 0.5%, the same two payments would cost around £364 in conversion fees, a saving of approximately £1,456.
With a World Account, you could hold EUR and CNH balances, pay each supplier directly from the matching currency and use local payment rails where available. This keeps conversion costs down and removes the need to fund each payment separately from GBP.
WorldFirst charges zero transfer fees on local payments and transfers to key destinations where supported. You can also connect with Xero or NetSuite to keep payment records aligned with your accounting.
Open a World Account for free and manage your international supplier payments with clearer costs and greater control.
1. What information do I need to send a cross-border payment to a supplier?
You’ll typically need the beneficiary name, IBAN or account number, BIC/SWIFT code, bank name and address, payment currency and invoice reference. For SEPA payments within Europe, the IBAN usually covers the main account details, though some providers may still ask for a BIC.
2. Are digital business payments secure?
Payments processed through FCA-authorised providers and established rails (Faster Payments, CHAPS, SWIFT) operate within a regulated framework with fraud controls and transaction monitoring. Funds held with an Electronic Money Institution are safeguarded rather than covered by the Financial Services Compensation Scheme. Always verify supplier bank details before sending, particularly if they have changed recently.
3. Do I need a business bank account to make digital payments?
You need a business payment account, but it doesn’t have to be a traditional bank account. FCA-authorised Electronic Money Institutions can hold funds, make payments and manage FX in multiple currencies. Funds are safeguarded under the Payment Services Regulations rather than covered by the Financial Services Compensation Scheme.
4. What is the difference between SEPA and SWIFT?
SEPA handles euro payments across 41 countries and territories, typically settling within one working day at low cost. SWIFT is a global messaging network covering most other currencies and corridors, but payments can pass through multiple correspondent banks, each potentially deducting a fee before funds arrive.
5. How can I reduce the cost of paying overseas suppliers?
The two main levers are the FX margin your provider applies and the payment rail you use for each corridor. Comparing your provider’s quoted rate against the Bank of England’s mid-market rate before each payment, and using local rails such as SEPA where available, can reduce costs significantly on repeat orders.
