Getting paid when exporting

Receiving payments from overseas customers


There are two key issues when receiving payment from overseas customers - the currency in which you will be paid and the method the customer will use to make payment.

Currency issues

Most customers will prefer to be invoiced and pay in their local currency. You may lose business if you insist on being paid in sterling.

However, accepting foreign currency will result in additional costs for your business. There will be a transaction cost for converting the payments into sterling. You also carry the risk of the currency devaluing between the time you supply the goods and when you are paid for them.

Read more about foreign currency and exchange risks.

Payment methods

There are four main payment types:

  • Interbank transfer - your customer pays directly into a bank account that you nominate. This is standard practice in many countries.
  • Buyer's cheque - a cheque payable to you drawn against your customer's account. Accepting cheques from buyers can be risky - they can bounce or be lost in transit. The payment will also need time to clear.
  • Banker's draft - a cheque payable to you drawn against your customer's bank rather than their account. These provide more security than buyer's cheques but the bank will usually charge your customer to provide a banker's draft. They can also be lost in transit.
  • International money orders - documents that can be exchanged for cash in the supplier's country via a Post Office or through an issuer's office. They are cheaper to obtain than banker's drafts but can be lost in transit.

Discuss the options with your customers and make the agreed payment methods clear in your trading agreements.

Debit and credit cards

Customers may offer to pay using credit or debit cards. While this can prove a fast and convenient way of receiving payment, there is a risk that the charge may be disputed by your customer and reversed.

Pay careful attention to the terms and conditions of your merchant account to minimise the risk.

Read more about using payment cards to buy and sell goods or services.