Paying a supplier abroad: the mistakes made by (almost) all French SMEs

Accepting the exchange rate quoted by your bank without questioning it

This is the number one mistake — and the most costly.

When you ask your bank to convert euros into yuan, Indian rupee, or Hong Kong dollar, it applies its own exchange rate. This rate is not the interbank market rate (the “real” rate): it includes a mark-up, known as a spread, which the bank deducts discreetly.

In concrete terms, for a transfer of 100,000 euros, a 2% margin represents 2,000 euros deducted without an explicit line item on your statement. Multiply that by the number of annual transactions, and the loss becomes structural.

Many SME leaders never compare this rate. They trust their usual bank by default — and pay a very high price for this convenience.

Ignoring correspondent banking fees (intermediary SWIFT fees)

An international transfer between a French bank and an Asian or African bank almost never goes directly. It transits through one or more correspondent banks, each taking a fee along the way — between 15 and 35 dollars per bank, sometimes more.

These fees are not always visible at the start. They are deducted from the amount received by your supplier, creating a discrepancy between what you sent and what they actually received.

The practical result: your supplier is underpaid, you have to issue a top-up payment, and you incur the fees twice. Some contracts include the “OUR” clause (all fees paid by the sender) to avoid this issue — but many SMEs are unaware of it.

Paying in euros rather than in the supplier’s local currency

This is an intuitively “logical” mistake: paying in euros avoids having to handle a currency conversion. Except that in this case, your supplier bears the exchange rate risk — and passes it on in their prices.

Conversely, offering to pay in the local currency (yuan, rupee, dirham, Vietnamese dong) often gives you genuine negotiating leverage. However, this requires managing the conversion beforehand so you are not subjected to a poor rate at the last minute.

The key: convert it yourself, at the right rate, at the right time — rather than letting your bank do it when the transfer is executed.

Not factoring settlement times into procurement planning

A SWIFT transfer to Asia takes between 2 and 5 working days in the best-case scenario. With slow correspondent banks, compliance checks, or local public holidays, it can reach 7 to 10 days.

For SMEs working with tight production deadlines or contracts tied to delivery dates, this delay can push back an entire order — leading to penalties or stockouts.

Anticipating payment times is an integral part of international cash management. Yet, it is rarely integrated into SME procurement processes.

Treating each transfer in isolation, without an FX strategy

Paying supplier by supplier, currency by currency, as due dates arrive: this is the approach taken by the majority of SMEs. It is also the most expensive.

Because it exposes the business to market volatility with every transaction. An order placed in January at a favourable EUR/USD rate can become loss-making in March if the euro has depreciated in the meantime.

Businesses that manage their currency risk smartly do not react: they anticipate. Forward contracts, spot purchases at the right time, partial hedging of exposure — these tools exist, and they are not reserved for large corporations.

What SMEs that master their international payments do differently

Business leaders who have optimised their foreign exchange flows have one thing in common: they no longer use their bank for their international transfers.

They use an international payments specialist — an entity registered with ORIAS, backed by authorised payment institutions, which accesses interbank market rates and passes this competitiveness directly on to their transactions.

The benefits are tangible: transparent exchange rates with no hidden margin, transfers to over 130 currencies with reduced delivery times, a named IBAN opened in the company's name (funds never transit through a third-party account), accessible hedging tools such as spot purchases, forward contracts, or automated orders, and a dedicated point of contact — not a generalist customer service team.

OSolto — the international payments specialist for your foreign currency flows

OSolto is registered with ORIAS (No. 26004337). We support French SMEs in optimising their foreign currency payments — without replacing their bank, but complementing it.

Our technology partners — Ebury (majority-owned by Banco Santander) and Currencycloud — enable us to offer access to foreign exchange market terms that are usually reserved for large corporations.

Each client has a segregated, named account. No funds ever pass through OSolto’s own accounts.

Conclusion

Paying an overseas supplier seems simple on the surface. But every step — the rate applied, the intermediary banks, the chosen currency, the payment timing — can silently eat away at your profit margin.

The good news: these losses are avoidable. With the right tools and the right partner, an SME can regain control of its international payments within a few days.

Would you like to analyse your current flows and estimate your potential savings? Book an appointment with Mohamed Ali — it’s free and non-binding.

Book a discovery call →

Frequently asked questions

What is an international payments specialist? It is an entity dedicated to business transfers and foreign exchange. An intermediary like OSolto is registered with ORIAS and relies on authorised payment institutions that execute payments and are subject to strict regulations regarding client fund protection and anti-money laundering.

Are my funds safe? Yes. At OSolto, client funds are held in segregated, named accounts in the client company’s name. They are never commingled with OSolto’s own funds.

Do I need to close my bank account to use OSolto? No. OSolto complements your bank; it does not replace it. You continue to use your bank for day-to-day operations, and OSolto for your foreign currency payments.

Which currencies are available? Over 130 currencies, including major ones (USD, GBP, CHF, JPY, CNY) and numerous emerging currencies (MAD, TND, NGN, INR, VND, etc.).

How long does it take to open an account? Generally between 48 and 72 hours after verification of the KYB (Know Your Business) documents required by regulations.