If you have never paid a contractor abroad, this will sound exaggerated. If you have, you already know which part annoys you most.
You send a thousand pounds. Your bank takes a fee. The exchange rate you get is not the one you looked up — it is a few per cent worse, and that spread is not itemised anywhere. The money then travels through one or more correspondent banks, each of which may take something. Their bank may charge them to receive it. And somewhere between two and five working days later, a figure arrives that neither of you can fully account for.
Then, occasionally, it simply does not arrive, and nobody can tell you where it is. It turns up eight days later with no explanation, or it comes back to you minus fees, having achieved nothing.
The costs nobody adds up
- The fee you can seeTypically twenty to thirty pounds. Irritating but visible.
- The spread you cannotUsually the larger of the two, and deliberately not presented as a fee.
- The fee at their endWhich they pay, resent, and eventually price into what they charge you.
- The afternoonForms, reference numbers, and a follow-up email two days later asking whether it has landed.
- The relationshipA freelancer who gets paid late, or short, remembers. It shows up in their availability next time.
For one payment a year this is a nuisance. For six contractors paid monthly it is a recurring afternoon and several hundred pounds.
What the alternative looks like
The money goes from your wallet to theirs. Directly, in seconds, for a fraction of a penny regardless of the amount. Fifty pounds and five thousand cost the same to send.
There is no account for them to open, no minimum, no bank deciding whether their country is worth the compliance cost. If they have a phone, they can be paid. That last point matters more than it sounds in places where a business bank account is genuinely difficult to get.
Paying a designer in Buenos Aires becomes the same action as paying one in Bolton. Not similar. The same.
And it lands in the books
A payment run of twenty contractors is one review and one approval rather than twenty separate transfers and twenty reference numbers.
Each payment records itself against the right supplier, marks their bill paid, is valued in sterling at the moment it went out so the deduction in your accounts is a real figure, and posts to Xero against a nominal code. That is the part that usually costs more time than the payment itself.
Where this does not apply
UK employees are a different matter, and anyone telling you otherwise has not spoken to an accountant.
PAYE and National Insurance are due to HMRC in sterling. Wages paid in cryptoassets carry PAYE on their value at the time of payment. And National Minimum Wage has to be paid in money, so paying staff in tokens risks a breach regardless of what it was worth.
So the sensible arrangement is: calculate and record what you owe in one place, pay UK employees through your existing payroll, and pay contractors and freelancers outside that directly. Nobody should be selling you crypto payroll for British staff.
One practical point
Your contractor needs somewhere to receive it, and they will want to convert some of it into their own currency eventually. In a lot of countries that is easy and cheap; in some it is neither.
Worth a two-minute conversation before you change how you pay someone. Plenty of freelancers in exactly these markets already prefer being paid this way, precisely because their alternative was worse than yours.
Paying people is in development in Ceodore. If you pay contractors abroad every month, we would rather build the version you actually want.