Multi-currency payment processing removes the barriers between your business and global customers, turning international business expansion from a complex challenge into a streamlined growth opportunity.
This article explains how multi-currency payments work, walks through the payment process step-by-step, and shows how the right technology can save you money while strengthening vendor relationships.
What is multi-currency payment processing?
Multi-currency payment processing lets businesses send and receive payments in different currencies without manual conversion steps. Instead of forcing international vendors to accept USD payments that get converted at their bank, you can pay them directly in euros, pounds, yen, or their preferred currency.
This approach eliminates the uncertainty and fees that come with currency conversion at the recipient's end. Vendors receive the exact transaction amount they expect, and you avoid the intermediary bank charges that typically come with international USD transfers.
How does multi-currency payment processing work?
When the system processes multi-currency payments, it converts each payment from your home currency to the recipient's preferred currency using real-time exchange rates. This conversion happens up front, so both parties know exactly how much is being sent and received before the transaction occurs.
Modern platforms route these payments through local networks in the destination country rather than traditional correspondent banking systems. So, a payment to a vendor in Germany travels through German banking infrastructure, making it faster and cheaper than sending USD payments that require multiple bank intermediaries.
The key is to use a payment system that lets you choose to pay in local currency through multi-currency payment processing. Depending on the platform you choose, your payments can even sync with your accounting software, automatically recording transactions in the correct currencies and maintaining accurate books without the work of manual reconciliation.
Use cases for multi-currency payments
Multi-currency payment processing serves businesses across industries and sizes, from startups working with overseas freelancers to established companies managing complex international supply chains.
Paying international suppliers and vendors
Manufacturing and retail businesses often work with suppliers across multiple countries. A clothing retailer working with manufacturers in Vietnam, Bangladesh, and Mexico can pay each supplier in their local currency rather than forcing them to handle USD conversions. This approach often translates into better pricing, faster payment processing, and stronger vendor relationships.
E-commerce businesses with global customers
Online retailers selling internationally can accept payments in customers' preferred currencies, reducing cart abandonment and improving conversion rates. When customers see prices in familiar currency, they're more likely to complete purchases without worrying about unexpected conversion fees.
This approach works especially well for subscription services, where customers appreciate seeing consistent billing amounts in their local currency rather than fluctuating charges based on exchange rates.
Companies with international offices or subsidiaries
Businesses operating across multiple countries need efficient ways to move money between locations for payroll, operational expenses, and intercompany transfers. A technology company with offices in the US, UK, and Australia can send funds to each location in local currency, making it easier for regional teams to manage expenses and payroll while reducing costs compared to traditional wire transfers
Service providers working with global clients
Consulting firms, marketing agencies, and other service providers often work with clients worldwide. Accepting payments in multiple currencies can make it easier to work with international clients. When clients can pay in their preferred currency, they're more likely to pay promptly and may be willing to work on larger projects without worrying about currency conversion costs.
Import and export businesses
Companies regularly buying or selling goods internationally can benefit significantly from multi-currency payments. Exporters can quote prices in buyers' local currencies to win more business, while importers can pay suppliers directly in local currency to negotiate better terms.
These businesses often handle many transactions each month, making the cost savings and efficiency gains even more valuable over time.
Steps involved in making a multi-currency payment
Understanding the payment flow can help you choose the right approach for your business, optimizing outcomes for your own cost savings as well as your vendor relationships.
Step 1: Choose your payment currency (USD vs. local currency)
This first decision, whether to pay in your home currency or the vendor's local currency, determines the total cost of your payment transfer and your vendor's experience, too.
Paying in the vendor's local currency eliminates intermediary bank fees that can add up considerably as you make more international payments. It also prevents vendors from padding their invoices with things like "international processing fees" to protect against unfavorable exchange rates at their bank.
When vendors know they'll receive the exact amount of their invoice, in their own local currency, they may offer more competitive quotes, which could result in lower overall costs for your business.
Step 2: Select payment method and processing route
Traditional wire transfers move through correspondent banking networks, taking 3-5 business days (or more) and incurring multiple fees along the way. Local Transfer technology uses the destination country's domestic payment infrastructure instead, delivering funds up to 4 days faster and often arriving the same business day, depending on the region where you're sending your payment.
This method treats your international payment like a domestic transaction in the recipient's country, bypassing the delays and costs of the traditional wire system. International vendors tend to prefer these transactions, not just because they arrive in their local currency but also because they tend to be fast and reliable, giving your vendors more control and predictability over their cash flow.
Step 3: Currency conversion and rate calculation
Exchange rates get locked in when you schedule the payment, providing transparency for both parties. Unlike USD payments, in which conversion happens at the recipient's bank using less favorable rates, local currency payments use competitive exchange rates that are clearly displayed upfront.
With traditional international payments, the exchange rate can also be unpredictable due to the lag between the day the payment is initiated and the day it arrives. If exchange rates take an unfavorable turn during that time, your vendor could receive less than either of you expected.
The speed and transparency of Local Transfer payments can help with cash flow planning and eliminate surprises for both you and your vendor.
Step 4: Payment execution and delivery
Local Transfer payments move through domestic clearing systems in the destination country, following the same efficient routes as local business payments. As more of these local networks are built out and connected, Local Transfer payments can reach more regions of the world.
By contrast, traditional wires navigate through multiple correspondent banks, each potentially adding delays and fees. These international wires are still reliable, and many companies use them today, especially when they need to pay a vendor in a part of the world where Local Transfer isn't an option yet.
Still, the streamlined routing of payments through Local Transfer networks means vendors can receive funds and confirm receipt quickly, improving working relationships and potentially even qualifying your business for early payment discounts.
Automate multi-currency payments with BILL
The BILL International Payments solution transforms international vendor payments from a complex, expensive process into a simple extension of your domestic payment workflow. The platform covers 130+ countries and automatically syncs all payment details with major accounting software, including QuickBooks, Xero, Sage Intacct, Oracle NetSuite, and Microsoft Dynamics 365 Business Central.
The Local Transfer feature delivers payments up to 4 days faster than traditional wires, often arriving the same business day. You pay zero wire transfer fees for payments in local currencies, and competitive exchange rates ensure you're getting fair conversion terms. Vendors receive full payment amounts without deductions for intermediary bank fees, strengthening business relationships and often resulting in better pricing on future contracts.
And, you can still choose to send your payment by traditional international wire when you need to, letting you make any payment, whether domestic or international, through one convenient platform.
The unified system automates your accounts payable process for both domestic and international payments through the same approval workflows and security protocols you already use. This consistency reduces training time, minimizes errors, and gives you complete visibility into cash flow across all currencies and countries.
Ready to see how much time and money you can save on international payments? Schedule a live demo to explore BILL's multi-currency capabilities and see the platform in action.
Frequently asked questions
Here are quick, easy answers to some of the most commonly asked questions about multi-currency payments and multi-currency payment processing.
What is a multi-currency payment gateway?
A multi-currency payment gateway is a payment processor that lets businesses accept payments in multiple currencies from international customers across different countries. Unlike traditional payment gateways that only process payments in one currency, these global payment systems can handle multi-currency transactions without forcing customers to pay in foreign currency.
This eliminates the need for customers to deal with currency conversion on their end, making it easier for global businesses to expand into international markets.
What are currency conversion fees?
Currency conversion fees are charges that financial institutions apply when converting payments from one currency to another using current exchange rate calculations. These conversion fees can include both visible charges and hidden fees built into less favorable conversion rates.
Many payment processors charge these extra fees when handling foreign currency transactions, though some platforms eliminate conversion fees for cross-border payments made in the recipient's local currency.
What is a multi-currency merchant account?
A multi-currency merchant account allows businesses to hold and process payments in multiple currencies through connected bank accounts, rather than converting everything to a single base currency. This type of merchant account lets global businesses accept payments from international customers in their preferred currencies while reducing the administrative burden of managing cross-border transactions.
Multi-currency merchant accounts are particularly cost-effective for businesses with many international suppliers or those targeting global customer bases, as they minimize the impact of currency fluctuations and the additional fees associated with frequent currency conversions.
Are there security concerns around international payments?
International payments are generally secure when processed through established card networks and reputable payment processors, but online businesses should understand key features that protect both their operations and customer experience.
Dynamic currency conversion at the checkout page can create transparency issues if rates aren't clearly displayed, potentially affecting trust with your target market. For e-commerce businesses, the most secure approach involves using platforms where conversion rates are automatically adjusted and clearly shown, eliminating the need for manual intervention that could introduce errors.
Modern multi-currency systems integrate with major card networks to maintain the same security standards across other currencies, ensuring that expanding into international markets doesn't compromise payment security or create additional vulnerabilities.
