October 16, 2023—EasCorp was joined by global payment leaders Corpay, its partner provider of cross-border payments, for the annual International Payments Services webinar. Among the topics discussed was the value of sending international payments in local currencies vs. U.S. dollars. Data continues to show that the U.S. dollar is the dominant currency used in global transactions and trade, and, according to the Federal Reserve Banks, between 1999-2019 accounted “for 96 percent of trade invoicing in the Americas, 74 percent in the Asia-Pacific region, and 79 percent in the rest of the world.
Corpay advises that both processing time and cost can possibly be reduced by sending funds in the currency of the recipient. Payments made in USD flow through additional intermediaries and correspondent banks leading to delivery delays, higher fees, and foreign exchange markups. The possible advantages of sending in local (or foreign) currency vs. USD are:
- Faster Delivery: Reduces the number of correspondent banks involved in the process and bypasses the need for currency conversion.
- Reduced Fees: The fewer banks involved in a transaction, the lower the fees charged.
- Currency Conversion Costs: Higher currency conversion fees are reduced.
- Control of Exchange Rate: Eliminates the risk of exchange rate fluctuations due to adverse exchange rate movements.
- Invoice Cost Savings: Members should ask vendors to send invoices denominated in the local currency to simplify the account reconciliation process for the recipient.
Learn more about EasCorp’s International Payments Services, including international wires and iACH services.