Paying a supplier in Asia: the mistakes that (almost) all French SMEs make

1. Accepting the exchange rate displayed 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 rupees, or Hong Kong dollars, it applies its own exchange rate. This rate is not the interbank market rate (the "real" rate): it includes a markup, known as a spread, which the bank discreetly pockets.

In practical 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.

2. Ignoring correspondent banking fees (intermediary SWIFT fees)

An international transfer between a French bank and an Asian bank almost never goes through directly. It passes 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 outset. They are deducted from the amount received by your supplier, creating a discrepancy between what you sent and what they actually received.

Concrete result: your supplier is underpaid, you have to issue a supplementary payment, and you incur the fees twice. Some contracts include the "OUR" clause (all fees borne by the sender) to avoid this issue — but many SMEs are unaware of this.

3. Paying in euros rather than in the supplier's local currency

This is an intuitively "logical" mistake: paying in euros avoids having to manage a currency conversion. However, in this case, it is your supplier who bears the foreign exchange risk — and passes it on through their prices.

Conversely, offering to pay in the local currency (yuan, rupee, Vietnamese dong) often gives you negotiating leverage. But this requires managing the conversion upfront to avoid being subjected to a poor rate at the last minute.

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

4. Failing to anticipate settlement lead times in procurement planning

A SWIFT transfer to Asia takes between 2 and 5 business days in the best of cases. With slow correspondent banks, compliance checks, or local public holidays, it can take 7 to 10 days.

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

Anticipating payment lead times is an integral part of international cash management. Yet, it is rarely incorporated into the purchasing processes of SMEs that are just starting to export.

5. Treating each transfer as an isolated transaction, without a currency strategy

SMEs that regularly place orders in Asia are exposed to ongoing currency volatility. The EUR/CNY or EUR/INR exchange rate fluctuates daily. The same purchase can cost 3 to 5% more or less depending on when you initiate the transfer.

Without a currency strategy — even a simple one — you passively suffer this volatility. However, tools exist to lock in a rate in advance (forward contract), protect against an adverse rise (currency option), or smooth out purchases over time.

These instruments are not reserved solely for large corporations. A specialised payment intermediary can make them accessible starting from just a few thousand euros in monthly transaction volume.

How to avoid these mistakes: what the best-structured SMEs do

SMEs that have mastered their international payment costs all share one thing in common: they have separated currency management from their regular commercial bank.

In practice, they work with a specialised payment provider that offers them:

• An exchange rate close to the interbank market rate, without an excessive spread

• Optimised SWIFT transfers, with complete end-to-end tracking

• The ability to pay in the supplier's local currency

• Straightforward hedging tools to protect their margins on future purchases

This is precisely what OSolto offers.

Registered with ORIAS (no. 26004337), OSolto supports French SMEs in optimising their payments to Asia and the rest of the world.

The result: tangible savings on every transaction, better cost visibility, and a human point of contact who understands your payment flows.

Take action

Do you regularly pay suppliers in Asia or outside the Eurozone? Take 15 minutes to analyse your actual costs with an OSolto expert — with no obligation.

→ Contact us at osolto.com or email us at info@osolto.com

FAQ

How much does an international transfer to China really cost via a traditional bank? On average, a French bank charges between 15 and 30 euros in fixed fees, plus an exchange rate margin of 1.5% to 3%. For a 50,000-euro transfer, the total bill can exceed 1,500 euros — rarely broken down on the bank statement.

Is paying in yuan (CNY) possible for a French SME? Yes, absolutely. A specialised payment intermediary can execute transfers in yuan, Indian rupees, Vietnamese dong, or other Asian currencies. This prevents your supplier from having to bear the currency risk and can help you secure better commercial terms.

What is a forward contract, and is it suitable for SMEs? A forward contract allows you to lock in today's exchange rate for a transfer you will execute in 1 to 12 months' time. It is a hedging tool used by large companies, but it is also accessible to SMEs via a specialised intermediary. It protects your profit margin against adverse currency fluctuations.

What is the difference between a payment service provider and my bank for international transfers? A specialised provider is exclusively focused on international payments: its rates are more competitive, its fees more transparent, and its support better tailored to the needs of SMEs. Unlike a generalist bank, it does not charge you for the overall banking relationship through foreign exchange fees.

Is OSolto regulated for this type of operation? Yes. OSolto is registered with ORIAS under number 26004337. Your funds are secured in accordance with French and European regulatory requirements.