How To Manage International Payment Methods for Business Travelers

International travel and payment shouldn’t leave your business budget exhausted.

Here’s the thing: most business travelers end up wasting hundreds of dollars every trip on hidden fees, poor exchange rates, and antiquated payment methods. With global business travel spending projected to reach $1.48 trillion in 2024, organizations cannot afford to continue wasting money on inefficient payments.

Fortunately, there is a solution.

There are proven methods that you can implement to save big on international travel and cross-border payments. In this blog post, I’m going to share with you exactly how to make and manage your international payment methods like a pro.

Here’s what we’ll cover:

• Why Most Business Travelers Overpay For International Transactions
• The Best Payment Methods For International Business Travel
• How To Avoid Hidden Currency Conversion Fees
• Smart Strategies To Streamline Your International Payments

How To Compare International Payment Systems

Before I jump into my recommendations on making and managing international payments, you must first understand the system in order to know what to look for.

Don’t make the mistake of simply comparing international payment systems by their advertised fees.

You need to analyze the total cost of the payment including exchange rate markups, transaction fees and transfer speeds.

The most important factor? The real exchange rate compared to what your provider offers. The difference in rates is how providers profit. Some have no fees but profit off of hidden markups in poor exchange rates.

Take the time to compare international transfers and payments using a tool like the remitly vs paysend comparison to uncover significant differences in total costs. The service that may look the cheapest upfront is not necessarily the cheapest when you take everything into consideration.

Don’t be the one to blindly pick the first thing the bank throws at you. Compare at least 3 different providers before settling on a single payment system for your business travel needs.

Why Most Business Travelers Overpay For International Transactions

Before we get into my recommendations on the best international payment methods, let me tell you the number 1 mistake I see business travelers make.

It’s using the wrong payment methods.

Did you know that according to the latest survey, 61% of Global Business Travelers are issued a corporate credit card, but do not understand the fees they are really paying?

This is the issue: you swipe your card at the hotel in London, at a cafe in Paris, or at the train station in New York, and you think you are getting a good deal. In reality, there are multiple layers of fees buried in these transactions, and they add up and cut into your budget.

For instance, the standard foreign transaction fee you are probably paying on most credit and debit cards is a huge 2-3% on every purchase.

For the businesses that are spending say, $5,000 on a trip, that foreign transaction fee can add up to $150 lost on every single trip.

That’s without even including the fact that you are also probably paying a markup fee on currency conversion. Banks and credit card companies not only charge you the real exchange rate, but they tack on their own margin on top. This can cost another 1-3% per transaction.

That is potentially 5-6% extra for every single purchase you make abroad. For companies that have frequent international business travel, this is a huge hidden cost.

And the worst part…

Most of these fees are entirely avoidable if you know which payment methods to use and how to use them correctly.

The Best Payment Methods For International Business Travel

So what are the right payment methods to use for international business travel?

Let me break down your options, from worst to best.

Cash Currency Exchange

Ok, first up is probably the worst payment method for the majority of business travelers, and that is cash currency exchange.

Currency exchange booths at the airport or at hotels charge HORRIBLE rates and have markups of 5-10% or more.

You may be thinking, “Well Tim, cash works everywhere so surely it is a good option?” Well, no. The only time cash really makes sense is for small purchases where you can haggle at local markets or in countries where card payments are not widely accepted.

Standard Credit Cards

The standard credit card will charge those 2-3% foreign transaction fees that we discussed earlier, but at least you get purchase protection and better fraud protection and easier expense tracking than cash.

Nonetheless, you are leaving money on the table if you are using a standard card for international business travel.

Travel-Specific Credit Cards

Travel credit cards are a big improvement, as these do not charge foreign transaction fees. That is an instant 2-3% savings on every purchase.

Many of them also offer travel insurance, airport lounge access and bonus reward points.

Corporate Travel Cards

Corporate travel cards are designed with business travel in mind. Zero foreign transaction fees, integrated expense reporting, better fraud protection and higher credit limits are some of the benefits you can expect.

According to a recent report, 59% of business travelers have uploaded their corporate credit card to a mobile wallet so that they can easily make contactless payments while abroad.

Digital Wallets and Payment Apps

Digital wallets like Apple Pay and Google Pay are a game-changer for international payments. Fast, secure and widely accepted, digital payment apps and wallets are increasingly becoming a necessity for overseas travel.

The best part is, they work with your existing cards, so if you have a travel-friendly credit card loaded into your digital wallet, you get the benefits of both!

How To Avoid Hidden Currency Conversion Fees

Here is a little trick that most travelers do not know about…

When you are making a payment with your card abroad, the merchants often ask, “Would you like to pay in your home currency or the local currency?”

Always choose the local currency

Here is the reason: when you opt to pay in your home currency, the merchant gets to set the exchange rate. They always set it in their favor, adding a markup of 3-5% or more.

This is called Dynamic Currency Conversion (DCC), and while it is legal, it costs you money.

By choosing to pay in the local currency, your credit card company will handle the conversion for you – and they will typically offer much better rates than the merchant.

Hidden fees? ATM withdrawal fees. When you withdraw cash from an international ATM, you can be charged up to $10 per withdrawal.

Solutions? Try to withdraw more frequently or use a bank account that will reimburse you for ATM fees globally.

Smart Strategies To Streamline Your International Payments

Here are some strategies that can help you streamline your international business travel payments.

Use Multi-Currency Accounts

A multi-currency account allows you to hold funds in different currencies. You can convert money when the exchange rate is favorable and spend it later without being hit with last-minute conversion fees.

Set Up Payment Alerts

You can set up real-time notifications for all your international transactions. This will help you catch fraudulent charges immediately, and help you keep track of spending.

Plan Currency Conversions

Monitor exchange rates and plan to convert when rates are in your favor. Even small improvements can mean big savings on large transactions.

Centralize Payment Methods

Try to centralize all your international payments through one or two preferred methods. This makes it much easier to track expenses and simplifies reconciliation.

Final Thoughts

Managing international payment methods doesn’t need to be complicated or costly.

The key is to be aware of the fees you are paying and to choose the right payment methods for your needs. By avoiding foreign transaction fees, optimizing currency conversions and using travel-friendly payment cards, you can save hundreds or even thousands of dollars per year.

Keep these essentials in mind: ditch standard credit cards in favor of travel-specific options, always pay in local currency to avoid DCC markups, use digital wallets for convenience and security, and plan your currency conversions strategically.

Business travel is expensive enough, you should not be paying unnecessary fees on every transaction.