Common International Payment Methods Insights
November 15, 2017
2 min read

Working with suppliers in other countries means that you have to figure out the best way to pay them. There are a few common international payment methods; in some cases, you assume more risk than your supplier, and in others the supplier assumes more of the risk. 

Whichever method you decide to use, make sure you stick to an established payment channel with a provider you know and trust—any supplier that insists on being paid in an unconventional manner should be a cause for concern. 

Always check and double check you have the correct payment details before starting any transfer. 

Wire transfers

The simplest way of paying overseas suppliers is by wire transfer, electronically moving funds from your bank account into the supplier’s bank account. This type of transaction—like a standard credit or debit card payment—is classed as "cash-in-advance." Funds are sent quickly to recipients anywhere in the world.

Individual PIN numbers are assigned for wire transfers to authorized individuals, which makes it easier to root out fraud, and cash-in-advance payments have a high level of traceability. That said, it's impossible to stop a payment after it's been made and it can be difficult to get back if something goes wrong. Using this payment method, you assume most of the risk in the transaction.

Credit notes

Using a credit note (or letter of credit) is one of the safest ways to make a payment. 

Essentially, a buyer reaches an agreement with a bank to obtain credit. Once the terms of the credit note have been met and all relevant documentation has been verified by the bank, the bank agrees to pay the supplier. 

Credit notes prove to be popular because they balance the risks for buyers and suppliers—sellers know they will be paid for delivering the goods, while buyers are more confident that they will receive them. 

However, this method can be costly by the time interest and other expenses mount up, and suppliers will need to produce a lot of paperwork before they receive any funds. On, look for suppliers who list “L/C” as a payment method. 


Another alternative is to have payment held in escrow until the terms of your agreement have been met. It allows a third party to keep hold of the funds until both buyer and supplier are happy the order has been processed. 

The cost of escrow is often minimal compared to other payment methods, but it has other benefits as well. For example, buyers have some protection against non-delivery or fraud because the payment is not made until they have received their purchases. Sellers, meanwhile, have a sign of good faith: a buyer demonstrates they have the means and intention to pay.