How to pay overseas suppliers from Australia: A complete guide

Key takeaways

• Platforms that connect directly to local clearing systems can settle transfers faster and reduce fees.

• When paying an overseas supplier, keep the true cost of the transfer in mind along with your tax and reporting rules, and the speed of your transfer.

• Help protect your cash flow from market swings with multi-currency accounts, batch payments, interbank rates, and rate alerts.

Managing a supply chain across countries and currencies is part of running a business in Australia. Whether you’re importing inventory from East Asia, sourcing materials from Europe, or paying an overseas contractor in North America, how you make cross-border payments affects your cash flow, your exposure to exchange rate swings, and your compliance with the Australian Taxation Office (ATO).

In fact, we’re increasingly a nation of importers and exporters. Our total exports rose 3.1% to A$665.2 billion in 2025, and we recorded a surplus of A$6.9 billion¹. Our top five partner countries for merchandise trade and services exports in 2025 were China, Japan, USA, South Korea, and India, which collectively made up 59.8% of our exports. 

Sending money overseas has traditionally been slow and expensive. That’s changing, as modern payment platforms now bypass legacy banking routes and settle through local clearing networks instead. This guide covers your payment options, the tax rules to know, and some practical ways to help protect your margins.

What to keep in mind when paying an overseas supplier

Balancing speed, cost, and compliance is important when paying an overseas supplier, since getting any one of them wrong can be a costly mistake. Here are some other key considerations to keep in mind:

• The true cost of the transfer. Don’t just look at the flat fee – the real cost is often the exchange rate markup. Some providers advertise “fee-free” transfers but still apply a markup above the interbank rate. If your payment routes through SWIFT, intermediary banks may also take a cut along the way, which can mean your supplier receives less than you invoiced them for.

• Tax and reporting rules. Payments need to comply with the anti-money laundering (AML) rules monitored by the Australian Transaction Reports and Analysis Centre (AUSTRAC). You’re also responsible for checking whether your offshore purchases trigger GST under the ATO’s Division 84 reverse-charge rules.

• Transfer speed and cash flow. How fast your money arrives depends on the payment network you use. Legacy bank transfers can take three to five business days to clear, which ties up working capital in the meantime. Local clearing rails, by comparison, can often deliver funds the same day, or sometimes instantly.

• Getting the details right. Every country has its own payment standards, so it pays to check rather than assume. European vendors typically need an International Bank Account Number (IBAN), while suppliers in Mainland China often need a China National Advanced Payment System (CNAPS) code. It’s worth verifying these details on the invoice each time, to help avoid delays or rejected payments.

How do you pay an overseas supplier, step-by-step?

Paying an overseas supplier generally involves five steps: collecting the supplier’s bank details, choosing a payment method, checking the exchange rate, confirming the invoice details, then sending the transfer and keeping records.

Step 1: Collect your supplier’s bank details

Bank detail formats vary depending on where you’re sending the money, so it’s best to check the invoice rather than assume a format:

• Europe and the UK: a full IBAN and Business Identifier Code (BIC/SWIFT).

• United States: an ABA routing number and account number.

• Mainland China: a 12-digit CNAPS code to route CNY payments through local clearing systems.

• United Kingdom: a standard sort code and account number.

Step 2: Choose your payment method

This generally comes down to how much you’re sending and how often you send it. For a one-off payment, a standard bank transfer can be a reasonable option, even if it costs a little more. If you’re paying overseas suppliers regularly, a dedicated multi-currency account can often work out cheaper and faster, since it lets you hold local currencies, convert at wholesale rates, and pay through local payment rails.

Step 3: Check the exchange rate

Before you send a payment, it’s worth comparing the rate you’re offered against the real-time interbank (mid-market) rate, as this can help you see how much markup you may be paying. If the market’s looking volatile, forward contracts or limit orders may help you lock in a rate for future payments (more on this below).

Step 4: Confirm invoice details and payment purpose

Make sure your payment instructions match the invoice exactly, including the commercial invoice number, the payment currency, and the total amount. Some countries, including Mainland China, also require a specific “Purpose of Payment” code for regulatory reasons – getting this wrong, or leaving it out, can lead to the receiving bank rejecting the transfer.

Step 5: Send the transfer and keep records

Once your internal workflow has approved the payment, you can process it as a single transfer or as part of a batch upload. It’s a good idea to download the payment receipt (or the MT103 for SWIFT transfers) as proof of payment, and to keep this along with the original invoice on file for five years (longer for some records) to help stay compliant with the ATO.

What’s the best way to pay overseas suppliers from Australia?

The right method largely depends on how often you pay overseas suppliers and how much you typically send. Fintech platforms that use local clearing networks tend to be among the cheapest and fastest options for regular payments, while SWIFT can still suit rare, high-value transfers where local rails aren’t available. Here’s how the main options compare.

Fintech platforms using local clearing networks

Modern fintech platforms bypass the correspondent banking system entirely, routing payments through local domestic clearing systems instead of SWIFT — think ACH in the US, SEPA in the Eurozone, or Faster Payments in the UK. This approach can help you avoid SWIFT fees and unexpected intermediary bank deductions, while giving you access to wholesale exchange rates with more transparent markups. Payments also tend to settle faster this way, often arriving the same day or even instantly.

Traditional bank transfers (SWIFT)

SWIFT transfers, sometimes called a telegraphic transfer (TT), travel through a chain of intermediary banks before reaching your supplier. This method is highly secure and covers almost every country, though it tends to be slower and more expensive than some of the alternatives below.

Most major Australian banks can charge somewhere between $0 and $30 for online transfers, and up to $32–$35 for in-branch transfers, with the total cost rising further when intermediary banks take their own cut. 

The bigger cost is usually the exchange rate markup, and intermediary banks can also take processing cuts along the way, which can mean your supplier receives less than the amount you invoiced. This method tends to work best for infrequent, high-value transfers where local payment rails aren’t available to you.

International business cards (virtual and credit cards)

Business cards can be a convenient way to cover quick, low-value expenses, but they often add international transaction fees on top of the card scheme’s standard conversion rate.

A more cost-effective option can be a virtual multi-currency corporate card. These let you generate a card for a specific supplier within seconds, set spending limits, and track transactions in real time. When backed by a multi-currency account, you can pay directly from your held foreign currency balances, which helps you avoid international transaction fees.

Digital wallets

Digital wallets can be handy for quick, ad-hoc transactions, but they generally aren’t built for scaling a B2B supply chain. Their percentage-based conversion fees and fixed transaction charges can make high-value supplier payments more costly than they need to be, and reconciling wallet data with your accounting system often involves manual work.

Letter of credit

A letter of credit (LC) is a formal agreement where your bank guarantees that your supplier will be paid, provided they can supply proof of shipment and meet the agreed contract terms. This method is common for high-value manufacturing and bulk shipping, since it offers protection to both parties, but setting one up tends to be a manual, complex process that comes with its own bank fees.

Open account / open credit

Under open account terms, your supplier ships the goods first and invoices you afterwards, usually on 30, 60, or 90-day terms. This can be good for your cash flow, but it does require a degree of trust from the supplier, since they carry most of the payment risk. When the invoice falls due, it’s worth using a low-cost, fast payment rail to settle it.

Best way to pay overseas suppliers by corridor

Using domestic clearing networks in your supplier’s country generally helps your payment arrive faster and at a lower cost. The table below shows some of the more efficient routes for common Australian trade corridors.

How can you avoid high costs when paying overseas suppliers?

International transfer costs are largely made up of SWIFT fees and an uncompetitive exchange rate. Traditional banks build a margin into the rate on top of any transfer fee – on a large transfer, that adds up to thousands of dollars in hidden cost.

You can cut these costs by:

1. Bypassing the SWIFT network. Using a provider that routes payments through local domestic rails can help you avoid SWIFT fees and intermediary bank charges.

2. Getting a multi-currency account. This lets you receive, hold, and pay in foreign currencies directly, which can reduce conversion fees on funds you already hold.

3. Using fee-free virtual cards. For smaller expenses, look for corporate cards that don’t charge international transaction fees.

4. Setting rate targets. You can lock in exchange rates when the market moves in your favour, to help protect future invoice payments.

Do you need to pay GST on services from overseas suppliers?

It depends on whether you're importing physical goods or digital services. For low-value imported goods (A$1,000 or less) and digital services sold directly to non-GST-registered consumers, the offshore supplier is generally required to register for GST and charge 10% at the point of sale.

Business-to-business (B2B) imported services, such as software licences, design work, or consultancy, fall under the ATO's Division 84 reverse-charge GST rules instead – this shifts the responsibility for calculating and paying GST from the non-resident supplier to you, the Australian business buyer, though it's often cash-neutral if the purchase relates entirely to your taxable business activities.

The exact rules depend on your circumstances, so it's worth checking the ATO's reverse-charge GST guidance or speaking with your accountant before lodging your BAS.

How can you protect your business from currency risk?

Currency swings can eat into your margins over time – a rate drop between the invoice date and the payment date can make the same goods more expensive in AUD terms. Here are a few ways businesses commonly look to manage this risk:

• Hold foreign currencies directly. A multi-currency account like Airwallex Global Account lets you keep reserves in the currencies you use most, so you can pay suppliers directly and help reduce your exposure to conversion fees and market volatility.

• Use forward contracts. These let you lock in a rate for a specific currency pair for a set future date. You won’t benefit if the rate happens to improve, but you’re protected from sudden drops and get more certainty for budgeting.

• Set market limit orders. You can set a target exchange rate in your payment platform, and it will aim to convert automatically once the market reaches that rate, so you don’t need to watch live charts throughout the day.

Why businesses choose Airwallex to pay overseas suppliers

Aussie importers and digital businesses often lose money to marked-up rates, high wire fees, and slow, manual admin. Airwallex offers direct, local payment rails as a faster, more cost-effective way to manage your international suppliers, without relying on legacy banking networks.

• Competitive, transparent FX rates: Interbank rates with a margin of 0.5% for major currencies (AUD, USD, CNY, HKD, EUR, GBP, SGD and more) and 1% for all others.

• Global Accounts with local details: Hold balances in 20+ currencies and receive funds from 70+ countries, then pay suppliers directly from your held balances.

• Automated Bill Pay: Upload invoices, extract billing data with OCR technology, set approval workflows, and pay without needing to log into your bank.

• Fast batch payments: Process up to 1,000 domestic or international payments at once via a spreadsheet upload, at no extra cost.

• Free local transfers: Send money to 120+ countries via local payment networks with $0 transfer fees, helping you avoid SWIFT costs and intermediary deductions.

• Multi-currency Corporate Cards: Issue virtual or physical Visa cards in seconds, with 0% international transaction fees drawn from your held foreign currency balances.

• Purchase Orders: Raise, approve, and reconcile POs alongside invoices and payments in one place.

• Yield: Put idle funds to work, earning returns on AUD and USD balances with zero lock-up periods, invested in AAA-rated JPMorgan money market funds.

• Native accounting integrations: Keep your books in sync with real-time multi-currency bank feeds for Xero, NetSuite, and QuickBooks.

• Lightning-fast speeds: over 90% of transfers arrive the same day, and roughly 45% settle instantly.

Frequently asked questions

What details do you need to pay an international supplier invoice?

To help avoid payment delays, it’s worth collecting these details from your supplier’s invoice ahead of time:

• Beneficiary details: Your supplier’s full legal business name and registered address.

• Bank details: The receiving bank’s name, branch address, and BIC/SWIFT code.

• Account indicators: The bank account number or IBAN (required for Europe, the UK, and most Middle Eastern corridors).

• Local routing codes: Region-specific codes, such as a 12-digit CNAPS code for Mainland China or a 9-digit ABA routing number for the US.

• Payment purpose: A clear description or country-specific purpose code (required in places like China) to help pass local regulatory checks.

What is the cheapest way to send money to an overseas supplier?

The cheapest option is generally a payment platform that connects directly to local domestic clearing networks in your supplier’s country. Bypassing SWIFT can help you avoid outgoing bank fees and intermediary deductions, and platforms like Airwallex offer interbank rates with a small, transparent markup (0.5–1%) instead of the retail margins typically applied by banks.

How long does an international payment to a supplier take?

This depends largely on the payment network your provider uses. For example, SWIFT wire transfers usually take two to five business days, while local clearing networks typically deliver funds the same day or within one business day.

Can you pay an overseas supplier with a credit card?

Yes, cards can be a practical option for low-value operating expenses, digital subscriptions, or urgent purchases. That said, traditional business cards often charge international transaction fees, and suppliers may pass on their own card processing surcharges. Multi-currency virtual cards can help you avoid this: linked to a multi-currency account, you pay directly from your pre-held foreign balances, helping you avoid conversion markups and international card fees.

Sources

1. https://www.abs.gov.au/statistics/economy/international-trade/international-trade-supplementary-information-calendar-year/2025 

2. https://www.ato.gov.au/businesses-and-organisations/gst-excise-and-indirect-taxes/gst/in-detail/rules-for-specific-transactions/international-transactions/reverse-charge-gst-on-offshore-goods-and-services-purchases 

3. https://www.ato.gov.au/businesses-and-organisations/gst-excise-and-indirect-taxes/gst/in-detail/rules-for-specific-transactions/international-transactions/australian-business-importing-goods-and-services 

4. https://www.ato.gov.au/businesses-and-organisations/gst-excise-and-indirect-taxes/gst/in-detail/your-industry/financial-services-and-insurance/gst-and-financial-supplies/gst-record-keeping-for-financial-suppliers 

5. https://www.ato.gov.au/businesses-and-organisations/international-tax-for-business/gst-for-non-resident-businesses/gst-cross-border-transactions-between-businesses