How to pay a business in England

Key takeaways

• SWIFT transfers aren’t your only option when paying UK businesses from Europe. You can choose to pay through payment platforms, via card, or through PayPal. Each has varying speeds, costs, and suitability depending on your needs.

• Be mindful, hidden costs soon add up. We’re talking intermediary fees (through SWIFT), forced currency conversions, and high FX markups.

• Modern payment platforms like Airwallex help customers access transparent and competitive exchange rates, same-day settlement, use multi-currency accounts with local GBP details, and seamless integration with business tools. All this can help you reduce costs and streamline payments to UK suppliers.

Currency conversion on top of currency conversion can make the whole process of paying UK suppliers drawn out and expensive. But you don’t want to stop doing business across borders. The only other option is to find a more cost-effective and efficient way to make international payments. 

In this blog, we’re sharing everything you need to know about paying businesses in England. We’ll explore payment methods available to you, discuss hidden costs, and drawbacks. And, we’ll touch on how modern payment platforms (just like Airwallex) are transforming the international payment landscape.

Common reasons for paying a business in England

So, why would your European business be paying someone in England, anyway? 

• Hiring remote workers. The internet has brought so many benefits, but a great one for companies is the ability to hire wherever the talent is, and that might be hiring someone in the UK to work for you remotely. But hiring freelancers and contractors from the UK will mean they’ll need to be paid in GBP, not Euros.

• Expanding operations. If you’re thinking of expanding your company into England, you’ll potentially need a base, hire local staff, pay for office rent, bills/utilities, and more. For that, you’ll need to spend in GBP. 

• Accessing professional services. Let’s say you need to seek legal advice, or you sign up for a SaaS marketing subscription based in England. The likelihood is, you’ll have to pay for these services in GBP. And if your current provider is forcibly converting funds from Euros to GBP, you’re going to face higher costs that you can’t do anything about.

• Fulfilling eCommerce needs. If your warehouses are UK-based, or you rely on English logistics or fulfilment services, you’ll need a reliable payment method to match. This will keep operational costs down while delivering a seamless service for your end customer.

• Sourcing from UK suppliers.  If you’ve found a fantastic manufacturer for your product or the perfect wholesalers, but they’re based in the UK, again, you’re going to need to pay these companies in their local currency. 

What are the main ways to pay a UK business?

There are several payment methods available to your European business. 

International bank transfers (SWIFT)

Sending payments through the international SWIFT network is a longer and more expensive way to send money cross-border. Because SWIFT doesn’t use local payment networks, like Airwallex, the process involves many intermediary banks before it even reaches your supplier/contractor/manufacturer. Banks charge a fee, so the more banks involved, the more costly the transaction. 

SEPA transfers

A Single Euro Payments Area (SEPA) transfer works well within the confines of the eurozone, but, unfortunately, the UK (and therefore England) isn’t part of SEPA. Typically, you can’t use this type of transfer to pay directly into a UK bank account.

Payment platforms (like Airwallex)

Platforms like Airwallex help plug the gaps left by traditional banks. By offering multi-currency accounts, you can quickly and cost-effectively take advantage of competitive exchange rates and quicker settlement times. We provide customers with local bank account details in more than 20 currencies, across 10-plus countries and regions.

Debt and credit card payments

If invoice amounts are small (and the UK business accepts card payments), you can pay this way. But, a word of warning, single-card payments like this can come with high fees.

PayPal

When comparing merchants, PayPal’s fees are generally higher for online or international transactions, with the platform charging cross-border fees on top of the transaction amount. With all the different types of fees bundled together, the cost of your international transfer will soon add up.

Compare different payment methods

Costs and challenges of paying UK businesses

There’s the obvious transaction fee to factor into your costs, but what else should you consider? Here are four challenges and costs that accompany traditional payment methods.

High FX conversion fees

Banks can add a markup on top of the mid-market rate, and banks aren’t the most transparent with their fees, so you truly don’t know how much a transfer will cost you until you make it. 

SWIFT transfer fees

By not utilising local bank account details, you have to rely on the SWIFT payment network. This means every time a bank gets involved in the process, they add a fee. On top of all these fees throughout the process, the recipient's UK-based bank might also charge a fee to receive the funds. This can make tracking and planning cash flow a bit of a nightmare.

Slow settlement times

If suppliers don’t get paid quickly, it can cause unnecessary friction in the relationship you’ve spent so long cultivating. Using a reliable and rapid payment method is essential to keep business operations running smoothly and efficiently (plus, you can take advantage of any early payment discounts!).

Currency mismatch

If your online business bank account doesn’t have the facility to hold, send, and receive funds in different currencies, you face exchange rate fluctuations because your currency conversions are forced every time you make an international payment. This is just thinning your profit margins.

Inefficient payment methods could be costing you tens of thousands of euros every year. This is money you could be putting to better use, like reinvesting in business growth. 

Compliance and regulation considerations

There are some requirements that cross-border payments between France and the UK have to meet, so here’s what you need to know so you can choose a compliant payment provider.

Make sure they’re regulated by the FCA

Any payment provider should be regulated by the UK’s Financial Conduct Authority (FCA) if handling GBP transactions. This ensures the provider meets strict security standards, anti-money laundering procedures, and client fund protection. You can search on the Financial Services Register to check that the provider you’re considering is registered.

Read about Airwallex on The Financial Services Register.

PSD2 and strong customer authentication 

The EU’s Payment Services Directive 2 (PSD2) requires Strong Customer Authentication for any electronic payment. Meaning that typically, you need to verify transactions using two-factor authentication (2FA). This adds a much-needed security layer to your payments. So make sure your payment provider is PSD2 compliant, like Airwallex.

Anti-money laundering checks 

Regulations in both France and the UK require payment providers to conduct thorough anti-money laundering (AML) and Know Your Customer (KYC) checks. Payment providers should carry out the KYC checks as part of the onboarding process for both individuals and businesses. To ensure AML compliance, providers can implement continuous monitoring within their infrastructure. For example, Airwallex integrates global sanctions screening, anti-fraud analysis, and ongoing transaction monitoring. 

Invoice and VAT requirements for cross-border trade

Invoicing properly is essential for making tax-compliant international payments and maintaining audit trails in both France and the UK. Your UK suppliers should include the following on their invoice:

• VAT registration numbers and full business details

• Clearly outline payment terms

• Payment currency 

• A breakdown of goods or services provided

• Any applicable VAT 

How to pay a UK business step by step

Paying your very first UK supplier doesn’t have to be overcomplicated. Follow these steps for accurate and efficient transactions:

Step one: Get invoice details 

Your supplier’s invoice should include the exact amount to pay, payment details, payment terms, company name, currency, and SWIFT/BIC code if you’re using a traditional transfer method.

Step two: Select your payment method 

Now, decide which method suits your payment type. From PayPal to a bank or fintech platform like Airwallex, choose the option that offers the lowest cost or the most convenient and quick process.

Step three: Check fees and exchange rates 

To make an informed decision, calculate how much this transfer will cost you in transfer fees, FX conversion charges, intermediary bank costs, etc. Choosing Airwallex means you get transparent pricing before you make a payment, without any hidden charges. Always compare the exchange rate with the mid-market rate to work out the true markup.

Step four: Initiate payment securely 

Using secure authentication, log in to whichever platform you choose and manually input your supplier’s invoice details carefully. Or, if using Airwallex, simply upload the invoice and, through our Bill Pay feature, and OCR technology will automatically extract all the important invoice details. Saving making easy human data entry errors, and ensuring quick and accurate supplier payments. 

Step five: Track and confirm settlement 

If you make use of a fintech platform like Airwallex, you can centralise the entire accounts payable process, from uploading the invoice to approval and payment, through to real-time reconciliation. Manual effort is minimal. No more maintaining spreadsheets or jotting down invoice numbers. 

Why Airwallex is the best way to pay UK businesses 

If you’re currently making use of the SWIFT network for international payments, there’s no doubt it works. But it’s not the most efficient, cost-conscious, or transparent way to pay your UK suppliers. 

Airwallex is a trusted partner for European and French companies looking to cut costs, gain financial visibility, and streamline accounts payable processes.

What we can offer:

• Multi-currency local business accounts. We provide you with local account details, not just in GBP and EUR, but more than eleven others, too. Holding sterling in your bank account and paying your English suppliers as though you were a local business. This means you avoid paying forced conversion fees, and you don’t have to swallow cross-border fees, either. 

• Transparent, competitive exchange rates. When compared to banks that can hide their margins, we offer an exchange rate close to the mid-market rate. And we’re transparent with our fees; you know them all upfront. If you’re making regular international payments, Airwallex can help you save money. 

• Quick payment processing. In Airwallex, your payments will usually settle in the same day or the next day. This is much quicker than using the SWIFT network, which can take up to five working days.

• Like-for-like settlement advantages. As you can hold GBP without needing to convert it, you can choose to convert it when rates are most favourable, putting you in better control of your margins and significantly reducing your FX costs.

• FCA regulated for security and compliance. We’re regulated by the FCA, which means your funds are protected as we meet all security standards.

• Simple integration with business tools. Having your financial tech stack integrated means automatic reconciliation, reduction in admin work, and centralised, seamless data flow. Airwallex can integrate with your ERP, accounting and bookkeeping software, eCommerce platforms, and more. 

A modern UK payment solution for modern businesses 

As you scale your French business, needing to pay suppliers in the UK is inevitable. But how you do it determines how much money you’ll save on FX and how much visibility over these transactions you’ll have. Hidden FX markups hinder cash flow, and slow settlement times can impact supplier relationships.

Airwallex can support you as you navigate the international commerce landscape with transparent pricing, high security standards, and the ability to hold, send, and receive funds in multiple currencies.

Let’s transform how you pay UK suppliers. Learn more about our international payment features or book a personalised product demo.

FAQs

Can I use SEPA to pay UK businesses?

No, you can’t. The UK isn’t part of the Single Euro Payments Area (SEPA). This means you can’t use SEPA transfers to pay directly into UK bank accounts.

Do I need to pay UK suppliers in GBP?

Some companies might accept other currencies, but most UK businesses will require you to pay in GBP.

What’s the fastest way to pay a supplier in England?

Using payment platforms like Airwallex means you settle payments on the same day or nearly instantly. This is much faster than traditional SWIFT transfers, which can take up to five business days.