6 Strategies to Lower the Cost of Your International Payments

International payments, a strategic financial challenge for businesses

In a world where trade is becoming more and more global, international payments play a key role in the global economy. According to McKinsey, the international payments market represents nearly 200 billion dollars in transaction and exchange fees, with an average annual growth of 6%. This expansion is driven by the rise in international trade, the digitalization of payments and the rise of fintechs, which are challenging the banks' monopoly.

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Why are international payments so expensive?

Businesses face several obstacles that make cross-border payments expensive and inefficient. Only 23% of SMEs are satisfied of their current international payment solutions, which testifies to the complexity of the system:

· Hidden bank fees : On average, businesses lose between 2 and 5% of the amount of their transactions due to exchange rate margins and additional fees.

· Multiple intermediaries : The majority of payments go through several correspondent banks, adding costs and delays.

· Exchange rate volatility: In 2024, the euro lost 6.4% against the dollar. This instability can weigh on business cash flow.

· Processing times : Unlike almost instant domestic payments, cross-border transactions can take up to five business days.

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Towards the optimization of international payments

Faced with these costs and inefficiencies, Businesses need to optimize their international payments. The emergence of new solutions, in particular fintechs, now allows to drastically reduce these costs, to accelerate transactions and to secure financial flows.

In this article, we present six proven strategies to reduce the cost of your international payments, improve your competitiveness and strengthen your cash flow.

Compare and negotiate transaction fees

The problem: hidden costs that weigh on margins

Businesses that make international payments often face high and not very transparent fees. Traditional banks apply multiple costs :

· Fixed transfer fees for each transaction, often around €20 to €50 per transfer.

· Exchange rate margin, which can represent up to 3% of the amount exchanged, although this is not always clearly indicated.

· Intermediary costs, when payments go through several correspondent banks before reaching the final recipient.

These cumulative costs can reach up to 5% of the total amount of a transaction, according to a McKinsey study.

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The solution: compare and negotiate actively

For reduce these costs, businesses must:

1. Compare offers from banks and fintechss: Banks often apply opaque price schedules, while new payment solutions have more transparent terms and conditions.

2. Negotiate the costss with its bank: Large companies can ask for discounts on fixed fees and better exchange conditions, but this is still more complex for SMEs.

3. Analyze the currencies used : Some providers offer more advantageous conversions on certain currencies depending on the volumes traded.

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Focus on solutions with no hidden costs

Opting for service providers who clearly display their rates helps to avoid unpleasant surprises. Keewe, for example, works no transfer or management fees and offers a competitive and transparent exchange rate gap to optimize each transaction.

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Use fintechs and alternative platforms

The problem: a rigid and expensive traditional banking network

The SWIFT network, used by the majority of banks for international payments, Add intermediaries between the issuer and the beneficiary. This results in:

· Additional fees applied by each intermediary bank.

· Extended deadlines of up to five working days.

· A lack of transparency on the final fees charged to the recipient.

Fintechs and new international payment platforms make it possible to avoid these costs by offering more direct and optimized transactions.

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The solution: favour more competitive alternatives

1. Fintechs like Keewe can reduce transaction costs from 30 to 50% compared to traditional banks (McKinsey).

2. Direct and local payments make it possible to avoid correspondent banks, speeding up transactions and reducing costs.

3. Multi-currency accounts offered by platforms like Keewe allow payments to be made without automatic conversion, thus eliminating high bank margins.

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Keewe, a solution adapted to international companies

· No hidden fees : a 100% transparent model.

· Competitive exchange rates : Keewe interviews a multitude of financial providers and selects the most competitive rate for the transaction.

· Free payments : all interbank transfer fees are absorbed by Keewe.

By integrating a solution like Keewe, businesses gain visibility over their payments, reduce their costs and improve their cash flow.

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Optimize the timing of payments and fix the exchange rate

The problem: currency fluctuations that add to the bill

Changes in exchange rates can significantly impact the final cost of international payments. A currency that appreciates between the moment a contract is signed and when the payment is made can represent a significant loss for the business.

In 2024, the euro fluctuated by more than 6% against the dollar, a volatility that has directly affected exporting and importing companies. Indeed, imagine even a 1% drop in the euro exchange rate: if the payment is €100,000, this variation can represent a loss of €1,000.

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The solution: anticipate and fix your exchange rate

1. Schedule payments at the most favorable times : Monitor market trends to identify the most advantageous periods.

2. Use forward contracts : These contracts allow you to set an exchange rate in advance, thus protecting against market variations.

3. Rely on solutions like Keewe : Keewe offers the possibility of securing an exchange rate, thus avoiding unpleasant surprises and allowing better cost management.

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Reduce intermediaries and pay in local currencies

The problem: intermediaries who inflate costs

Each intermediary in a cross-border payment applies its own fees, which can quickly increase the total cost of the transaction.

According to the IMF (International Monetary Fund), costs related to banking intermediaries can represent up to 50% of total fees of an international payment according to the geographical corridor.

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The solution: favour local payments

1. Reducing intermediaries by relying on partner banks in the target country : This makes it possible to avoid unnecessary costs associated with bank correspondents.

2. Use solutions like Keewe : Keewe offers the possibility to pay directly in local currencies, thus eliminating unnecessary conversions and associated costs.

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The benefits of such an approach:

· Cost reduction : Fewer intermediaries mean fewer fees to pay.

· Increased transparency : Elimination of unexpected costs applied by the correspondent banks.

· Faster transactions : A local payment is often processed more quickly than a traditional international transfer.

By opting for solutions like Keewe, businesses can significantly reduce the costs associated with cross-border payments while benefiting from greater efficiency and transparency.

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Automate and centralize payments

The problem: manual management that is a source of errors and costs

International payments are often handled manually, leading to errors, delays, and significant processing costs. The multiplication of transactions and currencies makes accounting and financial management of companies even more complex.

According to McKinsey, Businesses that automate payments reduce processing costs by 30-50% and gain in operational efficiency. By automating, they limit human errors, avoid late payments and optimize their cash flow management.

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The solution: centralize and automate payments

1. Consolidate and optimize your international payments : Centralized management makes it possible to avoid redundancies and to optimize financial flows.

2. Use adapted solutions : Platforms like Keewe make it possible to manage multi-currency payments with instant conversion and real-time monitoring.

3. Increase efficiency and transparency : By automating payments, the company reduces administrative burden and minimizes the risk of error.

Example: Keewe, a fluid and automated management

Keewe offers an intuitive interface to centralize payments, simplify currency management, and automate transactions. Thanks to its advanced features, businesses optimize cash flow and reduce processing costs.

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Adopting a Green FX strategy to transform payments into a CSR asset

The problem: polluting and expensive international payments

In a world that is increasingly focused on ecological transition, businesses must also take into account the carbon footprint of their international payments. Few actors are aware of this, but international trade represents 58% of greenhouse gas emissions from France.

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The solution: integrating more sustainable alternatives

1. Measuring the carbon footprint of payments : Adopt tools that make it possible to monitor the environmental impact of transactions.

2. Redirect part of the costs to ecological projects : Keewe offers an innovative approach with its Green FX offer, which pays back 15% of the income from transactions in ecological initiatives chosen by its customers.

3. Optimizing financial flows while reducing environmental impact : Responsible payment management is becoming an argument for differentiation and reinforces corporate CSR policies.

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Benefits of a Green FX strategy

• Cost reduction thanks to an optimization of the carbon footprint on payments.

• Valued environmental commitment with partners and customers.

• Optimizing brand image and strengthening of ESG criteria.

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Keewe, the answer to the challenges of international payments

International payments are a strategic issue for businesses, but they should not be a source of excessive costs or complexity. Thanks to six strategies discussed in this article, it is possible to significantly reduce fees, optimize currency management and secure transactions.

Keewe stands out as the ideal solution to meet these challenges:

• Free payments, fast and optimized.

• Transparent and competitive exchange rates, accessible in real time.

• Access to over 150 currencies, including exotic ones.

• A Green FX solution that turns each payment into an ecological lever.

Opt for more efficient, transparent and responsible international payment management with Keewe.