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There is no straightforward “best” way for a UK SME to pay its overseas suppliers. The right answer depends on which problem you want to solve as a UK SME owner or Finance Manager: tools that don’t talk to each other, fees you can’t see until after you’ve paid, or compliance questions you can’t get a straight answer to.
This guide compares the three main categories of solutions, bank transfers, multi-currency accounts, and trade finance, against each of those three problems, so you can work out which one actually fixes yours.
Why this got harder to get right in 2026
For the past few years, the advice was simple: use a fintech multi-currency account instead of your bank, and you’ll save money. That advice is now incomplete, for two reasons.
First, the regulator you’d complain to is in the middle of a multi-year handover. HM Treasury confirmed in April 2026 that it will abolish the Payment Systems Regulator and fold its functions into the Financial Conduct Authority. The FCA is already consolidating PSR functions where it can, ahead of the formal legislation. But David Geale, the PSR’s managing director, told the Treasury Committee he doesn’t expect the PSR to be officially abolished any earlier than the first quarter of 2027, so for now both bodies still exist and work side by side.
Separately, the PSR’s power to cap cross-border card interchange fees survived a legal challenge from Visa, Mastercard and Revolut, which the High Court dismissed in January 2026. If your dispute is about how a provider prices international payments, both the FCA and the PSR currently have a role, and that’s expected to be simplified to a single regulator once the legislation is complete.
Second, the international data tells a more specific story than “switch providers and save money.” The G20’s roadmap for cross-border payments set a target of keeping costs below 3% of the amount sent by 2027. The Financial Stability Board’s October 2025 progress report on that roadmap found that overall retail cross-border costs have stayed flat since 2023, with the share of expensive corridors declining slightly in 2025.
Where business payments genuinely lag isn’t cost; it’s speed and transparency. Fewer than 45% of B2B and B2P payments settle within one business day, against more than two-thirds of consumer-to-consumer payments, and transparency gaps persist in several regions. Of providers that already disclose their cost, 62.9% also disclose how long the payment will take, up 7.3 percentage points from last year. This is genuine progress, but still a meaningful share telling you one number without the other.
Business payments, in other words, aren’t the part of the system getting more expensive. They’re still catching up on speed and showing their full terms upfront.
The three pain points, precisely
Fragmented tools. A growing SME often ends up with a business bank account, a multi-currency wallet from an EMI, and sometimes a separate trade finance facility for different suppliers or different transaction sizes, with no single view of what any of it costs. The OECD’s 2026 Scoreboard on financing SMEs and entrepreneurs found that overall SME bank lending remains broadly stagnant even as new lending recovers, and that factoring and leasing, two of the trade-specific tools SMEs rely on, show mixed performance. That’s part of why fintech-driven and non-bank finance is playing a growing role in the SME financing mix: banks aren’t filling the gap on their own, so SMEs end up patching together several providers instead. That fragmentation isn’t a UX complaint; it’s a structural response to a financing gap banks aren’t closing.
Opaque fees. A transfer that says “no fee” can still cost 2 to 5% once you include the exchange rate markup, and banks rarely show that markup as a single, comparable number before you commit. The FSB’s October 2025 report found that B2B and B2P payments specifically still carry meaningful transparency gaps in several regions, even as the gap between cost-transparent and speed-transparent providers has narrowed overall.
Compliance burden. Two separate questions get conflated here, and shouldn’t be: is the provider properly authorised, and is your money actually protected if it fails? Both matter, but the answer isn’t the same for every provider category.
Comparing the three options against each pain point
| Fragmented tools | Opaque fees | Compliance burden | |
| Bank transfer (correspondent banking) | Usually the simplest to set up, since it uses an account you already have, but each correspondent bank in the chain can add its own cut, which you won’t see in advance. | The least transparent: the fee is often embedded in the exchange rate rather than itemised, and can move corridor to corridor. | Your money sits with a bank, so it’s covered by the Financial Services Compensation Scheme up to the standard limit, which is a different and generally stronger protection than e-money safeguarding. |
| Multi-currency account / EMI wallet | Often solves fragmentation well for recurring, similar-sized payments to the same markets, since rates and fees are usually visible in the app before you send. | Generally the most transparent of the three, since most EMIs show the rate and fee upfront, though markup still varies a lot between providers. | E-money institutions must safeguard customer funds by law, but check whether your provider is a fully authorised EMI or a small EMI, and read how they safeguard, since the two regimes aren’t identical and e-money protection is not deposit insurance. |
| Trade finance (invoice finance, letters of credit, digital trade platforms) | Adds a tool rather than removing one, so it’s rarely the fix for fragmentation on its own, it solves a different problem: timing, not channel. | Cost is usually quoted as a percentage of turnover rather than a per-transaction fee, which makes it harder to compare like-for-like with the other two options, but UK Finance has put the average facility cost across invoice finance and asset-based lending at between 1% and 2.4% of annual turnover. | These facilities typically sit with regulated lenders or banks, so the compliance question is closer to standard commercial lending due diligence than e-money safeguarding. |
Which one actually solves your problem
Rather than a single recommendation, treat this as a short decision test:
- If your problem is not knowing what you’ll be charged until after you’ve sent the money, an EMI or multi-currency account will almost always show you more upfront than a correspondent-banking transfer will. This is the single clearest win in this comparison.
- If your problem is juggling three logins and reconciling three different statements, consolidating your recurring supplier relationships into one multi-currency account while keeping your bank for one-off or unusually large payments can reduce the fragmentation more than adding a fourth tool would.
- If your problem is that you need to pay a supplier before your own customer has paid you, none of the first two options actually address that. That’s a timing problem, and it’s what trade finance, not a cheaper payment rail, is built to solve. Don’t expect a multi-currency account to fix a cash-flow gap.
- If your problem is trusting a newer provider with a large payment, check its FCA authorisation type and safeguarding method before you check its exchange rate. A slightly worse rate from a provider whose safeguarding you’ve actually verified is a reasonable trade.
What’s changing in 2026 that affects this choice
The FCA’s Payments Regulatory Priorities report, published in March 2026, names international payment pricing transparency as an active 2026 focus area under the Consumer Duty, and points firms back to its May 2025 good and poor practice findings on how they communicate the cost of international payments. The FCA has said plainly it still finds firms could be clearer about the cost of cross-border payments and remittances. In practice, this means it’s increasingly fair to judge a provider by whether it discloses its total cost the way the FCA’s good-practice examples describe, not just by its headline exchange rate.
The regulatory safeguarding framework has also just tightened. The FCA’s Policy Statement PS25/12 (August 2025) set out a new Safeguarding Supplementary Regime for payment and e-money firms, which came into force on 7 May 2026, in response to weaknesses the FCA found in firms’ safeguarding practices. The scale involved is real: electronic money institutions safeguarded about £26 billion in 2024, up from £11 billion in 2021, and payment institutions safeguarded an estimated £6 billion a day.
Worth knowing too: if a provider’s own safeguarding bank fails, the Financial Services Compensation Scheme can sometimes “look through” to compensate customers, but it never covers the case where the payments firm itself fails, which is exactly the gap the new regime is meant to close. For an SME choosing a provider now, “we safeguard your funds” means something more specific and checkable than it did a year ago, and it’s worth asking a provider directly how they’re complying with the new regime.
Separately, the complaints and enforcement route for payment pricing disputes is gradually consolidating under the FCA, even though the PSR hasn’t formally closed. The FCA’s March 2026 priorities report confirms it’s absorbing PSR functions ahead of legislation where it can. Full abolition isn’t expected before early 2027, so both regulators remain in place side by side until the end of 2026.
Frequently asked questions
What’s the best way for UK SMEs to pay international suppliers?
There isn’t one best way for every business. If opaque fees are your main problem, a multi-currency account or EMI wallet will show you more of the true cost upfront than a standard bank transfer. If your problem is cash-flow timing rather than fees, trade finance solves a different problem entirely, and switching payment rails won’t fix it.
Is it safe to move a large supplier payment through a newer fintech provider?
Check the FCA Register first to confirm whether it’s an authorised EMI or a small EMI, since the two have different volume limits, and ask specifically how it safeguards customer funds. Both authorisation types require them to safeguard funds. How they do it varies by provider.
Will switching from my bank to a multi-currency account actually save money?
Often yes on fees, since most EMIs disclose their rate and fees before you send, something that correspondent banking frequently doesn’t. The FSB’s October 2025 findings don’t actually show B2B cross-border costs rising; overall retail costs have stayed flat since 2023, with the share of expensive corridors slightly down. B2B and B2P payments remain slower and less consistently transparent than consumer payments. So switching is a reasonable bet on transparency and speed, but compare the all-in cost on your specific corridor rather than assuming a guaranteed category-wide saving.
Does the PSR-to-FCA merger change anything for me right now?
Not yet, and not for a while. The PSR’s own managing director told Parliament’s Treasury Committee in 2026 that he doesn’t expect official abolition before the first quarter of 2027, at the earliest. For now, the PSR and FCA both still exist and are coordinating, with the FCA absorbing functions ahead of legislation where it can. Worth revisiting in 2027, since that’s when a pricing complaint you’d raise is more likely to change.
Sources
OECD, “Financing SMEs and Entrepreneurs 2026: An OECD Scoreboard” (March 2026);
Financial Stability Board, G20 cross-border payments roadmap progress report (October 2025, the most recent available);
UK Finance, Invoice finance and asset-based lending sector data;
FCA, Regulatory Priorities: Payments (March 2026);
FCA Policy Statement PS25/12, “Changes to the safeguarding regime for payments and e-money firms” (August 2025);
HM Treasury announcement on PSR abolition (April 2026);
House of Commons, David Geale (PSR managing director), Evidence to the Treasury Committee (February 2026);
Financial Services and Markets Bill (introduced May 2026);
High Court ruling on PSR interchange cap powers (January 2026).
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