10 Best Ways to Pay International Contractors and Employees

Managing payments for international teams is challenging due to currency exchange, fees, and compliance requirements. Here's a breakdown of the 10 best payment methods to help you save time, reduce costs, and ensure compliance:

1. International Bank Transfers: Secure but slow and costly with high fees and exchange markups.
2. Digital Wallets (e.g., PayPal, Wise, Payoneer): Faster and cheaper than banks, with built-in currency conversion and compliance tools.
3. Cryptocurrencies: Decentralized, fast, and low-cost, but volatile and less regulated.
4. Stablecoins: Crypto-like speed with stable value, offering lower fees and real-time transfers.
5. Global Payroll Software (e.g., Rippling): Automates payroll, taxes, and compliance for multiple countries.
6. Employer of Record (EOR) Services (e.g., RemoFirst): Fully managed compliance and payment solutions for global teams.
7. Currency Management Strategies: Multi-currency accounts, forward contracts, and automated tools to reduce exchange risks.
8. Automated Payment Solutions: Streamlined tools for faster, error-free global transactions.
9. Centralized Treasury Management: Unifies payments and currency handling for better control and cost savings.
10. Compliance and Regulatory Tools: Ensures adherence to tax, labor, and data protection laws.

Quick Comparison

Payment Method	Speed	Fees & Costs	Compliance Features	Best For
Bank Transfers (SWIFT)	1-5 days	High	Built-in	Large, secure transfers
Digital Wallets	Instant-24 hours	Low	Automated	Small to medium payments
Cryptocurrencies	Minutes	Low	Limited	Tech-savvy recipients
Stablecoins	Minutes	Low	Emerging	Stable, fast payments
Global Payroll Software	2-3 days	Subscription-based	Advanced	Automated payroll management
EOR Services	2-4 days	8-15% of salary	Full compliance	Fully outsourced solutions
Currency Management Tools	Variable	Varies	Integrated	Cost control for FX risks
Automated Payment Platforms	Same/next day	Varies	Advanced	High-volume transactions
Centralized Treasury	1-3 days	Setup costs apply	Advanced	Unified financial operations

Choose the method that fits your needs based on speed, cost, and compliance. For smaller payments, digital wallets are ideal. For larger or recurring transactions, explore payroll software or centralized treasury tools. Combine methods to optimize costs and efficiency.

How to Pay Contractors Internationally with Low Fees

1. International Bank Transfers

International bank transfers, facilitated by the SWIFT (Society for Worldwide Interbank Financial Telecommunication) network, are a widely-used method for paying contractors and employees across borders. This system connects over 11,000 financial institutions in 200 countries, offering extensive global coverage ^[1].

Though secure and reliable, international bank transfers come with some challenges businesses should keep in mind:

• Time and Fees: Bank transfers involve multiple charges, such as sender fees ($15-50), receiver fees ($10-20), SWIFT network costs ($25-40), and currency conversion markups of 2-5% ^[4].
• Exchange Rates: Banks often apply a 2-5% markup to exchange rates, which can reduce the amount the recipient receives ^[1]. Comparing rates from different providers can help cut down on these costs.
• Security and Accuracy: The SWIFT network uses strong security measures and complies with global banking standards ^[4]. To avoid errors or delays, double-check SWIFT/BIC codes and IBANs, maintain payment records for tax purposes, and schedule payments early. Consolidating transactions can also help reduce fees ^[3].

While international bank transfers are dependable, they are often slower and more expensive than newer digital payment platforms. Businesses that prioritize traditional banking relationships and security may still find them a suitable option, but those looking for quicker or cheaper methods might consider digital wallets as an alternative.

2. Digital Wallets (e.g., PayPal, Payoneer, Wise)

Digital wallets provide a quick and affordable way to handle cross-border payments, making them a popular choice for paying contractors and employees. These platforms offer secure electronic payment systems and often outperform traditional bank transfers in terms of speed and cost.

Here’s a comparison of three well-known digital wallet platforms:

Platform	Transaction Fees	Processing Time	Key Features
PayPal	2.9% + $0.30 (domestic) 4.4% + fixed fee (international)	Instant to 24 hours	- Widely accepted worldwide - Built-in currency conversion
Wise	0.4-1.5% of transfer amount	80% within 24 hours	- Uses mid-market exchange rates - Batch payment options
Payoneer	0-2% for most transfers	2-5 business days	- Mass payout capabilities - Tax compliance tools

Key Points to Consider

Exchange Rates and Fees: Digital wallets often provide better transparency and lower fees compared to banks. For example, Wise uses mid-market exchange rates, ensuring users get fair currency conversions without hidden markups ^[4].

Security and Integration: These platforms focus heavily on security, offering features like AML (Anti-Money Laundering) and KYC (Know Your Customer) tools. They also integrate with payroll systems to minimize errors. Payoneer, for instance, includes tax management tools and supports mass payouts ^[3].

Speed of Transactions: Most payments are completed within 24 hours, making digital wallets much faster than traditional bank transfers. Some platforms, like PayPal, even allow instant transfers between users on the same network ^[2].

Although digital wallets primarily handle payments in traditional currencies, some businesses are beginning to explore cryptocurrencies for even quicker and decentralized payment options.

3. Cryptocurrencies

Cryptocurrencies provide a modern solution for cross-border payments, using blockchain technology to make transactions faster and less expensive compared to traditional banking methods.

Transaction Speed and Costs

Cryptocurrency transactions are completed within minutes and typically cost much less than wire transfers, especially for large sums ^[1][4].

Feature	Traditional Bank Transfer	Cryptocurrency Payment
Processing Time	3-5 business days	Minutes to hours
Transaction Fees	$25-50 per transfer + FX fees	$1-5 average network fee
Geographic Restrictions	Limited by banking hours/holidays	24/7 availability

Integration with Payroll Systems

Many payroll platforms now support cryptocurrency payments. For instance, Rise enables payments in over 100 cryptocurrencies ^[3]. This allows businesses to:

• Handle bulk payments with ease
• Provide employees with flexible payment options while cutting conversion costs
• Keep detailed transaction records for compliance purposes

Risk Management Considerations

While cryptocurrencies offer clear benefits, businesses must address certain challenges to adopt them effectively.

Market Volatility: Using stablecoins, which are tied to fiat currencies, can reduce the risk of value fluctuations while preserving the efficiency of crypto transactions ^[3].

Regulatory Compliance: Businesses must ensure that their cryptocurrency systems meet AML/KYC regulations and tax reporting requirements.

Security Measures

To protect assets, companies should implement measures like multi-signature wallets, cold storage for significant amounts, regular audits, and employee training on crypto security practices.

For businesses aiming to combine the speed and cost-effectiveness of cryptocurrency with greater stability, stablecoins are a practical choice.

4. Stablecoin Payments

Stablecoins offer the stability of traditional currencies combined with the efficiency of blockchain technology. They provide a modern way to handle international payments, standing out for their lower costs, consistent value, and quick processing times. Unlike cryptocurrencies, stablecoins avoid price swings, with transaction fees typically ranging between 0.5% and 1.5%, compared to the 2-5% fees of traditional payment methods ^[5].

Payment Method	Processing Time	Transaction Cost (%)	Value Stability
USDC/USDT	Real-time	0.5-1.5%	Pegged to USD
Traditional Wire	2-5 days	2-5%	Subject to FX rates
International ACH	3-5 days	1-3%	Subject to FX rates

Implementation and Risk Management

To successfully use stablecoins, businesses should select reliable options like USDC or USDT, ensure compliance with KYC/AML standards, and adopt automated tools for recurring payments like payroll. Risk management involves auditing reserves, staying updated on regulations, and securing digital wallets to protect funds.

Practical Applications

Industries that frequently rely on cross-border transactions can benefit significantly from stablecoins. Key advantages include:

• Real-time payment processing
• Reduced fees compared to traditional banking methods
• Stable value without exposure to cryptocurrency price changes
• Support for automated payment systems

For a more streamlined approach, businesses can explore global payroll software that integrates stablecoin payments alongside conventional payment methods. This ensures flexibility and efficiency in managing international transactions.

5. Global Payroll Software (e.g., Rippling)

Global payroll software simplifies international payments by automating tasks like currency conversion, tax compliance, and payment tracking. This reduces the complexity of managing cross-border workforce compensation and helps minimize errors.

Key Features and Advantages

Modern platforms such as Rippling provide tools that make handling international payroll smoother and more efficient:

Feature	Advantage	Outcome
Automated Currency Management	Real-time currency conversions	Limits foreign exchange risks
Compliance Monitoring	Automatic tax regulation updates	Lowers legal risks
Integration Capabilities	Seamlessly connects with HR systems	Simplifies business processes
Multi-Currency Support	Handles global payments in one place	Cuts down administrative tasks

Streamlined Cost Management

These platforms often include transparent foreign exchange fees and centralized tools, helping businesses manage costs while staying compliant. With automation, payment processing can be 30-40% faster than traditional methods like bank transfers ^[1].

Things to Keep in Mind

When choosing global payroll software, check its compatibility with your current systems, ensure it meets compliance standards, and confirm it can grow with your business needs. Many advanced platforms also include features like real-time payment tracking, automated tax handling, and analytics dashboards, which boost efficiency.

Some solutions even support stablecoin payments, giving businesses the option to incorporate blockchain technology for added flexibility. For companies looking to completely offload payroll management, Employer of Record (EOR) services offer a fully managed alternative.

sbb-itb-88a7fe6

6. Employer of Record (EOR) Services (e.g., RemoFirst)

Employer of Record (EOR) services take on the role of the legal employer for global teams, managing everything from payroll to compliance. Unlike basic payroll software, EOR services handle all compliance and payment tasks in one place.

Why EOR Services Save Time and Money

EOR services simplify costs with a clear fee structure, cutting administrative expenses by 25% and transaction fees by 15%. This makes them an efficient choice for managing global teams.

Category	Traditional Methods	EOR Services
Payment Processing Time	5-7 business days	Same or next day
Administrative Tasks	Multiple systems & providers	Single platform
Compliance Management	Manual oversight required	Automated & managed
Cost Structure	Variable fees & charges	Consolidated pricing

Simplifying Compliance and Reducing Risk

EOR services streamline compliance by handling tax laws, labor regulations, and benefits administration in a single system. This reduces errors and minimizes the need for manual monitoring ^[1].

A Practical Example

A tech company partnered with RemoFirst and saw a 70% drop in administrative workload and a 30% reduction in transaction costs. This freed up valuable time and resources for other priorities ^[2].

Growing Demand for EOR Solutions

The EOR market is on track to hit $10 billion by 2025, fueled by businesses seeking easier ways to manage global teams ^[3].

Key Features and Integrations

Modern EOR platforms connect seamlessly with HR systems, offering tools like payment tracking, tax automation, and support for multiple currencies. When choosing a provider, look for those with top-notch data encryption, regular audits, and comprehensive compliance solutions tailored to your target markets.

For businesses looking for even more automation, centralized treasury management tools can further simplify global payment processes.

7. Currency Management Strategies

Digital wallets and bank transfers handle payment execution, but managing currencies effectively requires more than just making payments. Businesses need structured strategies to control costs and reduce risks when dealing with global payments.

Multi-Currency Account Solutions

Multi-currency accounts are a game-changer for companies handling international transactions. These accounts let businesses hold and pay in multiple currencies, cutting down on conversion fees and simplifying payment workflows. For instance, platforms like Payoneer claim to save businesses up to 70% compared to traditional bank transfer fees ^[7].

Feature	Traditional Banking	Multi-Currency Accounts
Currency Conversion	Requires multiple conversions	Hold and pay in local currencies
Exchange Rate Fees	Higher markup	Competitive rates
Account Management	Separate accounts for each currency	Single, unified platform

Forward Contracts and Hedging

Forward contracts are a practical way to manage currency risk. By locking in exchange rates for future payments, businesses can protect themselves from unfavorable rate fluctuations. This is especially useful for companies paying contractors in different countries, as they can secure rates up to a year in advance ^[1].

Automated Currency Management

Automation tools simplify currency management by handling conversions and payments efficiently. These systems can:

• Track exchange rates in real-time for better timing.
• Execute transactions when rates are favorable.
• Generate compliance reports for cross-border payments.

Regulatory Compliance Integration

Cross-border payments must comply with various global regulations. Automated systems can help by:

• Generating the necessary documentation for international transactions.
• Monitoring tax obligations across different regions.

Data-Driven Decision Making

Analytics tools provide insights to improve currency management. These tools can track:

• Costs associated with transactions.
• Payment processing times.
• Exchange rate movements.
• Compliance performance metrics.

For businesses looking for even more efficiency, centralized treasury management systems offer a higher level of control and automation for global payments.

8. Automated Payment Solutions

Automated payment solutions go beyond basic currency management, offering tools that make global transactions faster and easier.

Key Advantages of Automation

Modern payment platforms simplify tasks like tax calculations, currency conversions, and cross-border payments. By managing everything through one dashboard, they reduce the need for multiple systems and cut down on manual work.

Feature	Traditional Process	Automated Solutions
Payment Processing Time	Up to 5 business days	Same or next day
Compliance Checks	Manual verification	Automated assessment
Currency Management	Manual conversion	Integrated FX handling
Documentation	Manual generation	Auto-generated paperwork

Seamless Integration

These platforms work with existing business systems using APIs, providing features like:

• Automatic accounting updates
• Invoice creation in local currencies
• Direct banking network connections
• Auto-generated compliance documents

Enhanced Security and Compliance

With encryption and two-factor authentication, these tools ensure secure transactions that meet international security standards ^[4]. Built-in compliance features handle contractor verification, generate necessary documents, and align with global regulations, lowering potential legal risks ^[1].

Real-Time Exchange Rate Management

Automated systems monitor exchange rates continuously, schedule payments at the best times, and lock in favorable rates. This approach helps businesses save on currency conversion costs while keeping payments accurate.

Simplified Global Payments

Automated payment platforms make handling international transactions easier by reducing manual work, ensuring compliance, and managing currencies - all within a single dashboard. For businesses needing even more control, centralized treasury management can provide a broader solution.

9. Centralized Treasury Management

Automated payment solutions handle individual transactions efficiently, but centralized treasury management elevates global financial operations by unifying all activities on a single platform. This approach reshapes how businesses manage international payments.

Cost Management Made Smarter

By grouping payments and optimizing currency conversions, centralized treasury systems cut transaction costs. They secure better exchange rates and reduce the need for frequent international transfers. This is especially helpful for businesses making multiple payments to contractors within the same country.

Key Features and Their Impact

Modern centralized treasury platforms are built to improve payment processes with integrated tools:

Feature	Benefit	Impact
Payment Consolidation	Fewer transfers	Lower transaction fees
Automated Compliance	Regulatory checks included	Smoother operations
Consolidated Reporting	Unified dashboard overview	Enhanced transparency

Built-In Compliance and Security

These platforms handle regulatory compliance automatically, adapting to various jurisdictions and generating necessary tax documents. Advanced security features ensure safe operations while integrating seamlessly with existing financial systems.

Real-Time Financial Oversight

"A centralized cash management system provides a comprehensive knowledge of cash requirements and movements. This reduces mistakes, such as funds being denominated in the wrong currency." - Tipalti Blog ^[5]

Integration with Existing Tools

Centralized treasury systems connect effortlessly with current business tools, offering:

• Secure API connections
• Automated reconciliation
• Integrated reporting
• Simplified payment workflows

This integration ensures smooth operations and better control over financial processes.

10. Compliance and Regulatory Considerations

Managing international payments requires careful attention to compliance and regulatory standards. For instance, under the Foreign Account Tax Compliance Act (FATCA), failing to meet payroll regulations can lead to fines of up to $10,000 per violation ^[2].

Key Compliance Areas

Regulatory Area	Requirements	Impact on Payments
Data Protection	GDPR compliance in EU	Ensures secure handling of personal data
Tax Regulations	FATCA reporting	Requires precise documentation
Anti-Money Laundering	KYC verification	Demands thorough due diligence
Labor Laws	Local employment rules	Ensures proper contractor classification

Leveraging Technology for Compliance

Modern technology plays a big role in simplifying global payroll compliance. Today's platforms offer features like recipient screening, automated compliance reporting, and real-time regulatory tracking. These tools help businesses navigate complex requirements while ensuring seamless payment processes across different regions ^[4].

By staying compliant, businesses not only avoid penalties but also maintain smooth international payment operations.

Mitigating Compliance Risks

Global payments come with challenges like fluctuating currencies, which can complicate compliance ^[5]. To minimize risks, businesses should:

• Monitor Exchange Rates: Use real-time tracking systems to stay ahead of currency changes.
• Document Transactions: Keep detailed records of all international payments for transparency.
• Stay Updated on Regulations: Regularly review and adapt to local regulatory changes.

Preparing for Future Changes

The rise of fintech continues to transform how businesses handle compliance for international payments. Advanced platforms now offer greater transparency and faster processing while adhering to regulatory standards ^[6]. To stay ahead, companies must keep an eye on new regulations and adjust their payment strategies as needed.

When paired with effective payment methods, these compliance tools provide a secure and efficient way to manage global transactions.

Comparison Table

Choosing the right payment method is crucial for managing costs, ensuring speed, and meeting compliance requirements when working with a global team. Here's a breakdown of popular payment solutions:

Payment Method	Transaction Speed	Fees & Costs	Global Coverage	Compliance Features	User Accessibility
International Bank Transfers (SWIFT)	1-5 business days	$20-50 per transfer + exchange rate markup	11,000+ banks in 200 countries	High - built-in compliance checks	Moderate - requires bank details
Digital Wallets	Instant to 24 hours	0.5-3% + currency conversion fees	200+ countries	Automated compliance tools	High - email/phone number only
Cryptocurrencies	Minutes	Network fees (varies)	Global	Limited regulatory framework	Low - requires technical knowledge
Stablecoins	Minutes	$1-5 per transaction	Global	Emerging regulations	Moderate - digital wallet needed
Global Payroll Software	2-3 business days	Monthly subscription + per-employee fee	50+ countries	Built-in compliance management	High - automated systems
EOR Services	2-4 business days	8-15% of employee salary	150+ countries	Full compliance handling	High - managed service
Automated Payment Solutions	Same/next day	Varies by provider	Varies by provider	Integrated compliance tools	High - automated processes
Centralized Treasury	1-3 business days	Setup costs + transaction fees	Based on banking network	Advanced compliance features	Moderate - requires training

Key Considerations and Cost Analysis

When selecting a payment option, think about transaction volume, geographic spread, and fee structures, including exchange rate markups. Here's a quick guide:

• For smaller payments (under $500), digital wallets work well due to their low fees and ease of use.
• For medium-sized payments ($500-$5000), specialized platforms often strike the right balance between cost and speed.
• For larger payments (over $5000), traditional bank transfers may be more cost-effective despite higher flat fees.

Many companies find success by combining different methods. For instance, using digital wallets for frequent, smaller payments and bank transfers for larger sums can help keep costs in check while maintaining flexibility.

Conclusion

Choosing the right payment method means finding the right balance between cost, speed, and compliance. Today, digital options work alongside older methods, offering more choices and convenience.

A mix of approaches can work well - for instance, using digital wallets for smaller payments and bank transfers for larger ones. Adding tools for currency management, automation, and compliance can help keep costs down and meet regulatory requirements.

Tips for managing international payments effectively:

• Use currency management tools to reduce exchange rate risks.
• Automate processes to save time and improve accuracy.
• Stay compliant with international regulations using specialized platforms.
• Regularly review and update your payment strategy to match market trends.

Platforms like Rippling and RemoFirst show how technology can simplify complex payment processes while meeting compliance standards. If you're new to international payments, start with digital platforms that include compliance tools, and expand to more advanced systems as your needs grow.

Keep in mind that the best payment strategy depends on factors like your business model, where your team is located, and how you handle transactions. Regularly reviewing how your payment methods perform in terms of speed, cost, and compliance will help you stay on track as your business develops.

Related posts

• US-Based Remote Staffing Agency Connecting You to Top Global Talent
• 12 Best Remote Recruitment Agencies to Hire Global Talent
• US Companies Save Big While Hiring Skilled LATAM Remote Talent
• Ultimate Guide to Global Talent Marketplaces