How to pay online in a different currency

This post was updated on 9 November 2023.

Whether you’re shopping in a foreign currency or sending money back home, here’s how you can pay online in different currencies and fees to look out for.

An African American woman using a smartphone in an office

In today’s world, the need to pay online in different currencies has become increasingly common.

With a click of a button, you can easily connect with retailers from all over the world. This opens a world of possibilities.

Here are five options to choose from when it comes to paying online in a foreign currency.

Ways to pay online in a different currency

1. Credit and debit cards

Credit and debit cards offer convenience and familiarity. However, it comes at a price. 

Depending on your card’s terms and conditions on international transaction fees and other hidden fees, you could be paying between 1% and 3% of the purchase amount, according to Forbes.

Here’s why:

  • International or foreign transaction fees

International transaction fees (or foreign transaction fees) are charges applied by card companies when your credit or debit card is used to make a purchase in a foreign currency. As outlined above, these vary and could be up to 3% of the purchase amount.

While 3% may only be a $0.12 difference on your $4 coffee, spending $10,000 on luxury goods could be taking an additional $300 out of your pocket.

It’s best practice to check your card’s terms and conditions before you click the ‘pay now’ button.

  • Currency conversion costs

On top of international transaction fees, you may also incur a currency conversion fee

When you make a purchase from an international website, your local currency is converted into the merchant’s currency. 

This is charged by the credit card payment processor or the merchant you’re buying from. 

As reported by Forbes, an international transaction fee of 3% could comprise a 2% foreign transaction fee, plus a 1% currency conversion fee. And according to Canstar, some credit cards charge a conversion fee, averaging at around 3%.

However, it’s difficult to find the true currency conversion cost. This is because the currency conversion fees are often rolled into your transaction fee, or it’s already included in the purchase price. 

2. Money transfer services

While these extra fees may sound small with a few percent here and there – it all adds up. To avoid incurring such high fees from banks and credit cards, consider a dedicated money transfer service.

Money transfer services like OFX help convert your payment into the preferred foreign currency and send the money straight to your recipient’s bank account with great rates and low or no fees.

If you are comparing rates, you should bear in mind that an attractive exchange rate may be offset by a high transaction fee (or vice versa).

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Consider using a dedicated money transfer to avoid incurring high fees from banks and credit or debit cards

OFX doesn’t charge a transaction fee. However, be aware that in some jurisdictions, a third party intermediary or bank may deduct a fee from the value of the transfer. This fee may vary and OFX receives no portion of it. 

Global money transfers made easy in 4 simple steps. Learn more

Money transfer companies also tend to offer better exchange rates than banks. This could save you more money, especially for larger transactions or regular international payments. The money transfer company usually takes the live market rate as a baseline and adds a margin to it.

If you book a transfer with OFX, your exchange rate will not be equal to the current market rate, it’ll be your tailored customer rate

What is the market rate?

The market rate, also known as the “interbank rate” or the “mid-market rate,” is essentially the ‘wholesale rate’.

Wholesale rate is typically available only to large financial institutions or those who purchase large volumes of currency.

What is OFX’s customer rate?

The OFX customer rate is an estimated rate that is based off the current market rate and includes our margin but excludes any fees (if applicable).

“I have been using OFX regularly since March 2022. I found them to be incredibly professional, the website is easy to use and transfer funds, and the exchange rate is significantly better than high street banks and always in the top 3 rates on comparable transfer sites (I check this regularly). Since 2022 I have saved several thousand pounds versus high street rates. Would recommend.”
– Warren, OFX client

3. Third-party payment services

Third-party payment services are entities that help you make or receive payments online. Typically, there are no transaction fees involved for payments in the same currency. 

But if the transaction requires a currency conversion, most third-party payment providers use a retail exchange rate, and you could also be hit with an additional conversion service charge. 

4. Direct bank transfer

Another way to transfer money is directly from your bank account into a foreign bank account. 

This is also known as a wire, telegraphic transfer or SWIFT transfer. Bank to bank transfers are reliable but could be more expensive with less favourable exchange rates.

5. A multi currency account (For business owners)

If you own a business and need to make regular online payments to offshore employees, consider a multi currency account. 

A multi currency account allows you to hold or manage multiple currencies in a single platform, offer flexibility and potentially lower conversion costs.

An asian Chinese senior man owner and daughter looking at each other's digital tablet at the bar counter table.
OFX’s Global Currency Account is an example of a multi currency account that helps you manage different currencies for your business in one simple platform. And it costs nothing to get started. There are no setup fees, receiving or account fees.

A better way to pay and get paid with OFX Global Currency Account. Learn more

Mitigating currency risks

Sometimes, complications may arise that could delay the purchase of your goods. There could be situations that prevent deals from being completed immediately.

Having a “buy now – pay later” option that lets you lock in an exchange rate could help protect you against market moves. With OFX Forward Contracts, you can book a rate today for a set date in the future. This means your rate is locked in despite any currency fluctuation.

Having the option to lock in today’s exchange rate for a future payment could protect you against any major market moves. With OFX Forward Contracts, you can book a rate today for a set date in the future. This means you’re locked in despite any currency fluctuation.

However, booking a Forward Contract may also mean losing out if the market rate improves, because you’re contracted to settle at the agreed rate.

The best way to pay online in a different currency

Paying online internationally could become expensive with added fees. 

With so many payment options to choose from, there is no one choice that fits-all when it comes to making international payments.

Factors like the amount you’re paying, interactional transaction fees, the current currency exchange rate and time-sensitivity can all affect your decision. 

Compare the different online payment methods to decide which options suit you best.

Paying online with OFX

  • You get real-time pricing, which can be accessed by logging in to our website or mobile app and requesting a live exchange rate quote
  • Immediate access to an online trading platform 24 hours a day, seven days a week
  • OFXperts available to help 24/7
  • Competitive exchange rates and transaction times
  • Accurate transaction records and history accessible at any time by logging into your account or speaking to one of our OFXperts
  • Access to market commentary, foreign exchange insights by industry experts and historical currency charts
  • Visibility to market/interbank rates; compare your customer rate (available on your OFX account) against market/interbank rates and against your bank’s or other provider’s rates
  • Stay on top of moving markets with OFX Rate Alerts to receive personalised market rate alerts straight to your inbox

“I needed to accelerate a wire transfer to complete a very important purchase. The manager, Jordana Moses, came up with a solution and followed it through to completion. Her response time my questions and requests was amazing. Thank you Jordana! I will continue using OFX for my money transfer needs.”
– Marc, OFX client

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IMPORTANT: The contents of this blog do not constitute financial advice and are provided for general information purposes only without taking into account the investment objectives, financial situation and particular needs of any particular person. OzForex Limited (trading as OFX) and its affiliated entities make no recommendation as to the merits of any financial strategy or product referred to in the blog. OFX makes no warranty, express or implied, concerning the suitability, completeness, quality or exactness of the information and models provided in this blog

Written by

Michelle Ang

Content Writer

With a decade of experience in writing, content planning, and online publishing for the B2C and B2B market, Michelle’s role at OFX is to plan and write valuable content to help readers with cross-border financial transaction needs. When she’s not busy writing or thinking about content, you can catch her at the gym, beach, or an art museum on the weekends.