Why Paying International Invoices in Local Currency Could Benefit Irish Importers

International trade is expanding the opportunities available to Irish importers, with more businesses sourcing goods from China, India and other developing markets.

In 2025, Chinese imports to Ireland reached approximately €7 to €8 billion making it the 5th largest source market. It also accounted for 5-6% of total imports.

India has also become an increasingly important sourcing market, particularly for engineering products, industrial components and manufactured goods.

When these payments are settled in EUR or USD, Irish importers are exposed to FX rate movements, the cost of conversion and with little control over the final amount they pay.

Is There a More Flexible Alternative?

If suppliers are paid in their local currency, Irish buyers could create better opportunities for negotiation, build better relationships with overseas suppliers and importantly, manage costs more efficiently.

Are Foreign Exchange Costs Removed if I Pay in Euro?

This is probably one of the most popular misconceptions around paying foreign suppliers .

Let’s use the following scenario to illustrate the point.

An Irish company buys goods from a manufacturer in China who invoices the buyer in euro. As the Irish business doesn’t need to convert currency, there is no exposure to volatility on its part.

To cover local expenses, however, the Chinese manufacturer will have to convert the euros received into local currency (RMB) and that conversion comes at a cost.

If the price for goods is quoted several weeks or months in advance of payment, there is much uncertainty for the supplier around where the EUR/RMB will be when the payment lands.
In such an instance, it is common for a supplier to build a currency buffer into its pricing to protect his margin.

Rather than appearing as a separate transaction cost, the FX cost becomes part of the price of the goods.

So, Can Paying in the Supplier’s Currency be Cheaper?

When payment for goods is settled in local currency, a layer of currency-related costs (conversion of euro or US dollars by the supplier to their local currency) is removed from the transaction.

Consider the costs that may be incurred by a Chinese manufacturer in terms of utilities, wages and locally sourced materials. These are generally paid in RMB meaning any payment received in Chinese currency can be used without the headache of converting it first.

This could give the buyer an opportunity to discuss whether the saving can be reflected in the commercial terms.

Could Paying in Local Currency Strengthen Relationships with my Suppliers?

The simple answer is yes and here is why.

When a supplier quotes in US dollars, he does so to facilitate the common practice of international buyers paying in USD, not because it is the most efficient currency for him.

Paying in the supplier’s domestic currency means he does not have to convert dollars or euro to pay local expenses, hence making the entire transaction easier for the supplier.

By removing unnecessary complication from the payment process, Irish businesses regularly trading with overseas manufacturers can establish stronger commercial relationships.
This could also provide an opportunity to negotiate on pricing and payment terms.

The currency of the payment is often rarely discussed but the invoiced currency can often affect the buyer’s negotiating position.

Suppose a Chinese supplier sells similar products to two Irish wholesalers. One accepts a euro invoice from the supplier and pays accordingly, the other pays in RMB using a specialist foreign currency payments provider.

Because the second business paid in RMB, the supplier now has greater certainty given much of his costs are incurred in local currency. This is an important factor when it comes to discussing the overall commercial price.

It must be noted, however, that paying in local currency may not produce a lower product price. It does give the buyer added flexibility when negotiating with overseas suppliers.

Costs Can be Easier to Understand When Paying in Local Currency

When an Irish buyer receives an invoice in euro, it can make the whole payment process seem more straightforward. However, the price a supplier charges may reflect the cost of converting his currency into euro.

When a supplier is paid in his local currency, finance teams can quickly get a clearer distinction between the price of goods, the FX cost and the cost of making a cross-border payment.
This provides an important financial reporting benefit.

The true cost of overseas purchasing becomes more transparent for procurement and finance teams when reviewing quotations or comparing suppliers. It can also be beneficial when negotiating any future contracts.

Are Less- Traded Currencies Readily Available to Irish Buyers?

This largely depends on the payments provider.

US dollars, sterling and euro are widely available through traditional banking channels along with other popular major currencies.

When Irish buyers are purchasing from markets such as China, Mexico, Brazil or India for example, there may be a requirement to pay in local currency.

However, many less commonly traded currencies such as Chinese renminbi, Mexican peso, Brazilian real or Indian rupee may not be handled through mainstream providers.

Fexco International Payments provides access to more than 165 currencies, including many less commonly traded or ‘exotic’ currencies such as RMB, INR, MXN and BRL.
This helps businesses to pay out to overseas suppliers in the currency they actually use.

Should I Consider Paying Overseas Suppliers in Local currency?

If your business imports from outside major markets like the eurozone, it could be worth enquiring.
Rather than simply accepting the invoiced currency, consider the following:

• In what currency does my supplier pay local expenses?
• Does the supplier’s price include an exchange rate I am paying for?
• Do I have an advantage from a negotiation point of view if I pay in local currency?
• Can the cost of goods be separated from the cost of conversion and transfer of funds?
• Can I transfer funds in my supplier’s local currency using my current payment provider?

If your current provider has difficulty accessing lesser traded currencies, you could reduce the cost of your cross-border payments by switching to a provider proficient in the transfer of local (exotic) currencies.

It is fair to say that paying for goods in the supplier’s currency will not be the right solution in every situation. But If you can get a better understanding of what currency your supplier needs, it could bring benefits you may not have previously considered.

How Fexco International Payments can Help

Fexco International Payments helps small businesses, large corporates and institutions to make cross-border payments to almost 200 countries and territories across more than 165 currencies.

It specialises in the delivery of exotic (less commonly traded ) currencies that can be more difficult to access through traditional banking channels.

If your business is paying overseas suppliers, you could save money by paying in local currency. Contact Ian Craddock for a no-obligation conversation about your business requirements and opportunities for savings.

Ian Craddock
Senior Business Development Executive
Fexco International Payments
Mob: +353 87-9094392
Landline: 066 979 9072
icraddock@fexco.com

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