Swiss SMEs: How to optimize your foreign supplier payments

For a Swiss SME engaged in international trade, paying supplier invoices in foreign currencies (Euros, Dollars, Pounds) often represents an invisible financial drain.

Many companies simply make standard international transfers from their Swiss bank account. Without knowing it, they incur inflated exchange rates and hidden transfer fees that directly cut into their profit margins. This expert guide, aimed at SMEs in Geneva, Lausanne, Zurich, Zug or Lugano, breaks down these costs and presents the concrete levers to reduce them drastically, without disrupting your accounting processes.

1. How much does an international supplier transfer really cost?

The real cost of a supplier payment in foreign currency is not limited to the fees shown on your statement: it combines a hidden margin on the exchange rate (the spread) and transfer fees. The former, invisible, is almost always the heavier of the two.

When you pay a 50,000 EUR invoice to a European supplier from your CHF account, your bank performs a double operation: a currency exchange, followed by an international transfer (SWIFT or SEPA).

What is the bank spread?

The spread (or "markup") is the difference between the real interbank exchange rate and the rate actually applied to your company. Traditional banks almost never apply the true market rate: they add a margin that varies with the institution and the volume; this guide works with an order of magnitude of 1.5% to 3%. This additional cost is not displayed as a "fee" — it is diluted directly into the exchange rate offered to you, which makes it very hard to detect without comparing to the day's rate. This range is not an official statistic: only comparing the rate you obtain with the day's interbank rate measures the margin actually applied.

Flat transfer fees

In addition to the margin on the rate, banks charge processing fees (issuance fees, correspondent bank fees, exchange commissions) that are added to each transaction. These fees are particularly high when payments go through the SWIFT network (outside the SEPA zone): expect, as an order of magnitude, CHF 15 to 50 per transfer depending on your bank's price list, to which the fees charged by intermediary correspondent banks may be added.

To understand in detail how an exchange rate is built, see our guide on how to calculate an exchange rate.

2. Paying in CHF or local currency: what to choose?

It is almost always better to ask to be invoiced in the supplier's original currency (EUR, USD, GBP) and to manage the conversion yourself. Asking for an invoice directly in Swiss Francs is a false good idea.

If your supplier (for example in France or Germany) agrees to invoice in CHF, they will assume the exchange risk themselves. To protect against market fluctuations, they will inevitably add a safety margin to the total amount of their invoice — a margin over which you have no control and which is, again, invisible.

Best practice: ask to be invoiced in the supplier's original currency. It is up to you to manage the conversion, as you are better placed to find a competitive financial intermediary and control the rate. For future orders, securing your margins requires forward hedging, i.e. a contract concluded with a bank; ibani does not offer this product. For spot payments, an intermediary such as ibani converts your supplier payments at the real market rate plus a margin of 0.40% to 0.15%, on the main currency pairs.

3. SEPA or SWIFT: which payment rail should you choose?

The choice of payment rail directly affects the time and cost of your transfer. Two major networks coexist for international payments from Switzerland: SEPA for euros, and SWIFT for the rest of the world.

4. Traditional bank or specialized FinTech: what are the differences?

Today, it is no longer necessary to use your historical deposit bank to make your international payments. Using a FinTech company specialized in currency exchange can help you significantly reduce your exchange costs, provided you compare each provider's terms and status. Here is a comparison of the two approaches for a Swiss SME.

To go further on currency solutions dedicated to companies, see our guide on buying foreign currency for companies, as well as our analysis of the macroeconomic factors that influence the EUR/CHF rate.

5. How ibani transforms your supplier payments

To support Swiss SMEs, ibani offers a "Business" solution designed to integrate frictionlessly with your current accounting habits. The principle: you continue to issue CHF transfers from your usual e-banking, and ibani handles the conversion and routing, at the interbank rate plus a published margin.

A dedicated Swiss IBAN per supplier

The operation is incredibly simple. As soon as you need to pay a new foreign supplier, ibani generates a free, dedicated Swiss IBAN for this beneficiary. You simply record this IBAN in your accounting software or your standard e-banking, exactly like a Swiss supplier.

When you make a CHF transfer to this IBAN, the funds are automatically converted with ibani's margin (from 0.40% to 0.15%, decreasing), then sent to your supplier's foreign account, in their currency. You have no new process to learn.

6. What are the treasury best practices for SMEs?

Beyond the choice of intermediary, a few management reflexes help durably protect your SME's margin against exchange risk. Formalize the following control points:

• Always compare to the interbank rate: before each significant payment, check the day's rate (the reference rate published daily by the ECB gives an indicative benchmark) to estimate the margin actually applied.
• Get invoiced in the supplier's currency: keep control of the conversion rather than delegating it (and paying for it) to the supplier.
• Hedge large volumes forward: on planned orders, a forward exchange contract concluded with a bank protects your margin against a depreciation of the CHF; ibani does not offer this product.
• Centralize your recurring payments: grouping transfers to the same supplier reduces the number of fixed SWIFT fees.
• Take care with your multi-currency reconciliation: every conversion must be traceable for accounting — see our guide on multi-currency accounting (reconciliation and exchange differences).

If your business also involves cross-border invoicing (VAT, accounting entries, exchange), our guide on cross-border B2B invoicing Switzerland / EU is the ideal complement to this read.

Frequently Asked Questions

How can I reduce currency exchange fees when paying a foreign supplier?

To reduce exchange fees, you must address the hidden margin (spread) applied by banks on the exchange rate, in the order of 1.5% to 3% under this guide's assumption. The solution is to use a specialized financial intermediary that applies the real interbank rate plus a reduced margin (from 0.40% to 0.15% at ibani, decreasing with the amount of the transaction), with no fixed SWIFT fees. On an annual purchasing volume of EUR 500,000, this represents a saving of EUR 5,500 to 13,000 per year under that assumption, calculated on the maximum margin of 0.40%.

Is it better to pay a foreign supplier in CHF or in their local currency (EUR, USD)?

It is almost always better to pay your supplier in their original currency (EUR, USD, GBP) rather than in CHF. If the supplier invoices in CHF, they bear the exchange risk and add a safety margin to the price to protect themselves. By managing the conversion yourself through a competitive intermediary, you control the rate and avoid that margin hidden in the sale price.

What is the difference between a SEPA transfer and a SWIFT transfer?

A SEPA transfer covers payments in euros within the SEPA area (EU plus a few countries including Switzerland). It is fast (1 business day) and inexpensive. A SWIFT transfer covers all other currencies and destinations outside the SEPA area: it goes through correspondent banks, takes 1 to 5 business days and charges fixed fees in the order of CHF 15 to 50 per operation depending on the bank, plus possible correspondent fees.

How much does an international transfer really cost via a Swiss bank?

The real cost of an international transfer via a Swiss bank combines two elements: fixed transfer fees (in the order of CHF 15 to 50 per SWIFT transfer depending on the bank, plus correspondent fees) and a hidden margin on the exchange rate, in the order of 1.5% to 3% under this guide's assumption. For a payment of EUR 100,000, the exchange margin alone can represent EUR 1,500 to 3,000 (about CHF 1,425 to 2,850 at the guide's example rate, CHF 95,000 for EUR 100,000), far more than the fixed fees displayed.

What is ibani's status in Switzerland?

ibani is a financial intermediary based in Geneva. ibani SA is affiliated with SO-FIT as a financial intermediary. SO-FIT is a self-regulatory organisation (SRO) approved by the Swiss Financial Market Supervisory Authority (FINMA) for the supervision of the financial intermediaries referred to in Article 2 para. 3 of the Swiss Federal Act on Combating Money Laundering and Terrorist Financing in the Financial Sector (Anti-Money Laundering Act, AMLA). As such, ibani applies Swiss anti-money-laundering and Know Your Customer (KYC) obligations.