[Business] How to Reduce International Remittance Fees: Comparing Banks, Cards, and Wise Business by Cost Breakdown｜海外事業　和田

When sending money to an overseas recipient, the first thing you likely worry about is the remittance fee.
However, if you are looking to minimize costs for business payments (such as outsourcing fees, procurement costs, overseas SaaS, or advertising expenses), you should look beyond just the remittance fee.

In conclusion, the cost of international remittance is determined by the “remittance fee + exchange (currency conversion) cost + intermediary bank or recipient bank fees + administrative effort + arrival speed.”
By breaking down and comparing this total cost, it becomes easier to judge whether bank transfers, card payments, or Wise Business best suit your company’s payments.

In this article, we will organize the mindset and key points for reducing costs, assuming that sole proprietors, freelancers, and small businesses are making business payments from Japan to overseas partners (personal uses like travel or study abroad are not the subject).

First, what you need to understand: International remittance costs are not just one thing

A common misunderstanding in international remittance is that “low remittance fees equal a low total cost.”
In practice, the following costs often overlap and become difficult to see.

• Remittance fee: Fixed costs or rates charged by the remittance service

• Exchange cost: The rate difference when converting yen to foreign currency (often hidden but can be significant)

• Intermediary bank fee: May be deducted if an intermediary bank is involved in the remittance route

• Recipient bank fee: May be charged by the recipient’s bank upon arrival

• Administrative cost: Matching invoices, confirming receipt, handling discrepancies, re-sending, etc.

For example, “the remittance fee was low, but the amount received by the partner was less than the invoice amount” or “additional remittance was required for the difference, resulting in a higher total cost” are common pitfalls for businesses making international payments.

Reducing costs is not just about cutting a few hundred yen; it is also about reducing discrepancies and rework to stabilize monthly operations.

Judgment criteria for comparing bank transfers, card payments, and international remittance services

There are three main options for international payments.

Bank transfer (international remittance)

While it is suitable for many situations, its cost structure tends to be complex.

• Remittance fees are sometimes fixed and easy to understand

• However, the exchange rate may include a fee equivalent

• Deductions by intermediary or recipient banks may occur

• Input errors in remittance information (SWIFT, IBAN, address, etc.) can lead to significant rework

Bank transfers are often considered in cases where the business partner requires a bank transfer, there is a contractual requirement, or the amount is large.
On the other hand, some people feel that it is difficult to estimate the total cost.

Credit Card Payments

This is a strong option for payments where cards are accepted, such as for overseas SaaS or advertising costs.
However, even here, costs vary depending on the card’s exchange rate, foreign transaction fees, and how the payment currency is handled.

• Payment procedures are simple, and statements are easy to track

• However, it can become expensive due to the merchant’s currency settings or the impact of DCC (Dynamic Currency Conversion)

• Cards are often not accepted for payments to business partners (outsourcing fees, procurement)

While cards are convenient, they may not be an option at all in situations where the other party wants to receive funds via bank account, such as for outsourcing fees or transfers to suppliers.

International Transfer Services (e.g., Wise Business)

There are services that make it easy to manage overseas business payments and foreign currency receipts collectively, acting like a middle ground between bank transfers and cards.
Wise Business is designed to make it easy to check fees and estimated arrival times before sending money, and its exchange process is based on the mid-market rate (actual applicable conditions and fees vary by currency, amount, and verification status, so checking the official screen each time is a prerequisite).

From here on, I will explain what you can do with Wise Business and where to look to see if there is a possibility of reducing costs, following the flow of actual business operations.

What you can check with Wise Business: The essence of low cost is the transparency of estimates

The difficulty with international business transfers is that it is hard for the payer to know exactly how much will be sent and for the recipient to know exactly how much will be received.

With Wise Business, it becomes easier to check at least the following points before sending money:

• Transfer fees are displayed before sending (varies by condition)

• Currency exchange is calculated based on the mid-market rate

• Estimated arrival time is displayed

• As a business account, you can handle payments, receipts, and multi-currency management on a single screen

Of course, this does not mean it is cheaper than a bank in every case.
However, being able to compare by breaking down what costs what is a useful decision-making tool for businesses that have ongoing overseas payments.

Since Wise Business’s features and fee structures are subject to change, the fastest way is to first try a simulation with your company’s currency and amount on the official screen.

By Case: Points where costs tend to inflate in overseas business payments

Here, we organize ‘where costs tend to increase’ and ‘tips for checking’ for common business scenarios.

1) Payments to overseas contractors (designers, developers, translators, video editors, etc.)

Overseas outsourcing often involves multiple small to medium payments each month, making fixed fees per transaction significant.

The points to check are as follows:

• How many payments are made each month (with fixed-fee models, the cost increases with the number of transactions)

• Whether the recipient prefers bank transfer or another method

• Whether reconciliation between the invoice and the received amount is required

Wise Business offers business-oriented features like batch payments, making it easier to compare for those who want to process multiple payments at once.
However, availability and required documents vary by situation, so please check the actual screen.

2) Payments for inventory to overseas suppliers (imports/cross-border e-commerce)

Inventory purchases tend to involve large amounts, and a difference of a few percent in the exchange rate directly impacts costs.

• Exchange rate costs are more likely to have a greater impact than remittance fees

• Depending on transaction terms, insufficient received amounts can lead to shipping delays

• Rules for stating the remitter name or reference number (Invoice No.) can be strict

For this type, there is a strong need to ‘see fees and rates before sending to confirm the total amount,’ so it is worth comparing using the Wise Business estimation screen.

3) Foreign currency payments for overseas SaaS and advertising costs (Meta, Google, various tools)

Card payments are mainstream for SaaS and advertising costs, but differences arise in the following points:

• Payment currency is automatically converted to yen, making the rate difficult to read

• Overseas usage fees may be added

• DCC (Dynamic Currency Conversion) often makes it more expensive (when currency selection appears at stores or on payment screens)

If you need to make payments in foreign currencies or manage foreign currency balances, you don’t have to rely solely on cards; there is room to redesign your business payment methods.
Because Wise Business incorporates the concept of multi-currency management, it is a viable option for businesses with frequent foreign currency payments.

Considering the receipt of foreign currency as well can sometimes lower operational costs.

For those who receive payments from overseas clients in foreign currency, keeping receipts and payments separate often leads to double currency conversion.

This round-trip process accumulates exchange costs.
Since Wise Business is built on the idea of receiving and managing multiple currencies, businesses where the currencies for incoming and outgoing payments are similar may be able to reduce waste depending on how they structure their operations.

However, since available currencies, the scope of receiving features, fees, and required documents vary based on conditions, please be sure to check official information and your company’s transaction terms.

Practical Checklist for Reducing Fees (Before Remittance)

Before choosing a remittance method, solidifying the following items will ensure your comparisons remain consistent.

• Payment currency: What currency is the counterparty’s invoice in (USD, EUR, etc.)?

• Payment frequency: How many times per month or per year?

• Amount per transaction: Is it a small or large amount?

• Counterparty’s receiving conditions: Is a bank account the only option, or are other methods acceptable?

• Invoice requirements: Reference number, name, address, payment deadline

• Urgency of receipt: Within how many days is it required?

Once this information is gathered, you can compare the “total cost” and “effort” of bank transfers, cards, and Wise Business on an equal footing.

It is practical to perform a trial calculation with Wise Business before making a decision.

Points to note: Always verify identity/corporate verification, arrival time, and accounting procedures.

These are the three areas where you might get stuck in operations if you jump in based solely on low costs.

Identity and Business Verification

For business accounts, identity verification and business entity verification may be required.
Since required documents, the presence of a review process, and the time until reflection vary depending on the situation, it is safer to prepare well in advance.

Arrival Time

The arrival time for international remittances varies depending on the destination country, currency, bank business days, and remittance route.
It is practical to avoid assuming a fixed arrival date, to send funds with plenty of time before payment deadlines, and to consider alternative methods when in a hurry.

Accounting (Expense Recording and Differences)

For payments in foreign currencies, conversion to yen is required for accounting purposes.

While tasks like these can be simplified through accounting software integration, please coordinate the final processing policy with your tax accountant or accounting staff (tax judgments are not made here).

Who Might Benefit from Wise Business / Who Might Not

Finally, here are some guidelines to help you make a quick decision.

Who might benefit

• Those with ongoing payments to overseas contractors or business partners

• Those who want to estimate fees and rates before sending money to reduce discrepancies with invoice amounts

• Those who receive or pay in multiple currencies and want to consolidate management

• Those who find the total cost of bank transfers difficult to predict and want a basis for comparison

Who might not benefit

• Those whose business partners specify a particular remittance method in their contracts

• The frequency of remittances is extremely low, and there is little benefit to changing operations

• Available payment methods are limited due to internal regulations or audits

Suitability is often determined more by the ‘nature of the transaction (currency, frequency, counterparty conditions)’ than by the scale of the business.

Items to check first on the official screen (this alone will help you make a decision)

If you are unsure, it is faster to check in the following order.

• Whether the destination country and currency are supported

• Options for payment methods (bank transfer, invoice payment, etc.)

• Breakdown of fees and the display of estimates before sending

• How the applicable rate is determined (exchange based on the mid-market rate)

• Estimated arrival time

• Information required for identity and corporate verification

• Whether business-specific features, such as accounting software integration, are necessary for your company

Wise Business provides a wealth of information even just from trial calculations for comparison.
If you are in the consideration stage, start by looking at an estimate for your company’s typical payments (currency and amount) under the same conditions.

For business international remittances, it is important not only to be cheap but also to be able to incorporate it into ‘reproducible operations.’
Do not just focus on remittance fees; consider exchange rates, deductions, effort, and speed to choose the payment method with the fewest risks.

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