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Should I pay in US Dollars or Foreign Currency?

How do you pay your global suppliers? Do you pay them in US dollars or their local currency? Do you know it makes a difference?

There’s no one-size-fits-all answer but there are several benefits of making payments in your supplier’s local currency.

Payment Timing

Payment timing is one of the most important reasons for paying your vendor in their local currency. When you pay a foreign vendor in US dollars, those funds are converted at the foreign vendor’s bank. When another institution is converting the funds, it may delay the payment in reaching your vendor’s bank account.

Hidden Fees

In addition, there may be “hidden fees” involved if you transfer payments in US dollars. When you send the payment to your vendor’s bank, the bank converts it to the local currency and sometimes charges an extra conversion fee. Who doesn’t hate unnecessary extra fees?

Fluctuating Rates

Another vital consideration is managing currency exchange rates versus the US dollar. When you pay in US dollars, the value of the payment may change between when the payment is approved and when it lands in the vendor’s bank account. This occurs due to the fluctuating value of currencies versus the dollar. To protect themselves against currency fluctuations, foreign vendors may increase their quotes to ensure they receive the value the right value for their goods and services. Payments in the local currency ensure your vendor is paid exactly the amount s/he is owed.

AP Errors

If there’s an AP error in paying vendors, correcting it wouldn’t only be complicated and time-consuming but also end up costing you more money. By paying foreign vendors in local currencies, you get rid of the need to convert currencies. This ensures that any payment errors won’t be as expensive.


Your vendors will find it easier to reconcile payments and reduce questions. For example, if you have a vendor in Europe, it is easier for them to match up a €100 to an exact €100 payment versus 6.35, depending upon the prevailing exchange rate.

Local currency payments are better to –

  • Reduce risk due to fluctuating exchange rates
  • vendors will not feel the need to hedge against them in their pricing
  • cost savings in the long run due to reduced costs and reduced delays

If you are looking for the best foreign currency exchange services to buy foreign currency in Dallas Fort Worth or San Antonio, Texas, call Texas Currency Exchange at 888-975-6009. At Texas Currency exchange, we will help you with any questions about exchange rates, the type of currency you will need for your travels and more.

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Texas Currency ExchangeTexas Currency Exchange
Joined: May 31st, 2019
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