The most cost-effective way for a UK business to pay US suppliers in dollars is usually a specialist currency broker: the GBP/USD conversion is the largest hidden cost in the payment, and a specialist typically applies a far tighter margin than a business bank account, with forward contracts to fix the rate on future invoices. Banks remain the default — and the most expensive habit — for recurring dollar payments. This guide covers the options, the mechanics of USD payments, and how importers protect their margins from the rate.
Who this guide is for
UK businesses paying invoices in US dollars — American suppliers and manufacturers, US software and SaaS contracts, freelancers billing in USD, or Asian suppliers who invoice in dollars (common across electronics and commodities). If your supplier base is in China specifically, our guide for UK importers from China covers the RMB-vs-USD invoicing decision; this article focuses on the dollar leg itself.
What the GBP/USD rate does to your costs
Dollar invoices are a moving cost in pounds. Take a business paying a $40,000 supplier invoice each quarter:
- At GBP/USD 1.35, the invoice costs £29,630.
- At 1.28, the same invoice costs £31,250.
That is a difference of around £1,600 per quarter — over £6,000 a year — on identical goods, driven only by the rate. Layer a 2–3% bank conversion margin on top of every payment and the total cost of “just using the bank” becomes one of the larger avoidable line items in an importer’s accounts. You can follow what is moving the pair in our GBP to USD forecast, driven primarily by the Federal Reserve and Bank of England rate paths.
Your options for paying US suppliers, compared
| Business bank (SWIFT) | Online payment platform | Specialist currency broker | |
|---|---|---|---|
| Exchange rate margin | Often 2–3% plus transfer fees | Lower margin, per-payment fees; caps can apply on large invoices | Typically well under 1%, no transfer caps |
| Forward contracts | Rarely offered to SMEs | Not offered | Yes — fix the rate on your invoice pipeline up to 12 months ahead |
| Speed to the US | 1–3 working days, intermediary banks can deduct fees en route | Often same/next day | Usually same or next working day via the payment network |
| Support | Branch or call centre | In-app chat | Dedicated dealer by phone who knows your payment schedule |
For the full method-by-method breakdown — including when SEPA, cards and wallets make sense for other corridors — see our pillar guide to the best way to pay overseas suppliers from the UK.
The mechanics: what a USD payment needs
US banking does not use IBANs. To pay a US supplier you will need their account number, the bank’s ABA routing number (nine digits) and the bank’s name and address; payments from the UK travel via SWIFT, sometimes through an intermediary bank that may deduct its own fee en route — one reason suppliers occasionally chase a payment that arrived short. Sending the exact invoiced amount in USD, with charges set so the recipient receives in full, avoids most of these disputes. Our SEPA vs SWIFT guide explains the routing in more detail.
Pay in dollars, not pounds. If you send GBP and let the supplier’s bank convert, you hand the margin decision to a bank you have no relationship with — and the supplier may receive less than invoiced, souring the relationship. Invoicing and paying in USD keeps the conversion on your side, where you can control it.
Protecting your margins: forwards, orders and timing
A forward contract fixes today’s GBP/USD rate for payments due months ahead — typically up to twelve months, for a small deposit. If you have a confirmed order book of dollar invoices, a forward turns a variable cost into a fixed one you can price against; the trade-off is that you give up the benefit if the pound strengthens. A market order targets a rate above today’s level and converts automatically if the market touches it — useful for building a dollar balance opportunistically. Many importers blend the two: fix a core percentage of known invoices forward, leave the rest flexible. Our currency hedging guide for UK businesses works through the strategy in detail.
“The businesses that get hurt are the ones treating the exchange rate as weather — something that just happens to them each quarter,” says Anthony Bull, CEO of Cambridge Currencies. “In our experience with UK importers paying dollar invoices, the conversation that changes things is simple: how much of next year’s order book is already confirmed? Fix the rate on that portion and the finance director can finally price with certainty.” We have written more on this in why UK businesses are losing margin on overseas supplier payments.
Common mistakes when paying US suppliers
- Defaulting to the business bank account. Convenient, but the margin plus fees on every payment is usually the most expensive option available.
- Sending pounds to a dollar invoice. The supplier’s bank converts at its own rate and the supplier may receive short.
- Ignoring intermediary fees. Set charges so the recipient gets the full amount, or expect reconciliation queries.
- Converting invoice-by-invoice with no plan. Each payment takes whatever the market offers that day; a forward on confirmed orders removes the lottery.
- Not reviewing the rate you actually achieve. Compare your effective rate against the mid-market rate periodically — the gap is your real cost. If you also bill US customers, see our guide to receiving international payments as a UK business, since the same margin applies in both directions.
How a specialist handles it
With Cambridge Currencies, a dedicated dealer handles your dollar payments by phone: you confirm the rate verbally, we lock it, and the USD is delivered to your supplier through our payment network, usually the same or next working day. Forward contracts and market orders are set up in the same conversation, and funds move via FCA-authorised partners Currencycloud (FRN 900199) and ScioPay (FRN 927951), with client money held in safeguarded accounts. For the wider service, see our business foreign exchange page.
Frequently asked questions
What is the cheapest way to pay a US supplier from the UK?
For regular or larger invoices, a specialist currency broker is usually cheapest overall, because the exchange rate margin — not the transfer fee — is the dominant cost, and specialists typically work from a much tighter margin than business bank accounts.
Should I pay my US supplier in dollars or pounds?
In dollars. Paying in USD keeps the conversion under your control and ensures the supplier receives the invoiced amount. Sending pounds forces a conversion at the receiving bank’s rate, which is usually worse and can leave the invoice short-paid.
What details do I need to pay a US bank account?
The account holder’s name, account number, the bank’s nine-digit ABA routing number, and the bank’s name and address. US accounts do not use IBANs.
How long does a USD payment from the UK take?
Typically the same or next working day through a specialist’s payment network; bank SWIFT payments commonly take one to three working days, occasionally longer if intermediary banks are involved.
Can I fix the GBP/USD rate for future invoices?
Yes — a forward contract locks today’s rate for payments due on future dates, typically up to twelve months ahead, usually for a small deposit. It suits confirmed orders where cost certainty matters more than chasing a better rate.
Are specialist brokers safe for business payments?
Funds sent through authorised payment institutions must be safeguarded under FCA rules — held separately from the firm’s own money. Cambridge Currencies operates with FCA-authorised partners Currencycloud (FRN 900199) and ScioPay (FRN 927951). Verify any provider on the FCA register before sending funds.
Do I need a US dollar account?
Not necessarily. Many businesses simply convert and pay per invoice or on a schedule. A USD balance or currency account can help if you also receive dollars, letting you net flows and convert only the surplus — worth discussing once dollar volumes grow.
Put a number on it
If you are paying dollar invoices through your bank, a ten-minute call will show you the rate a specialist would give on your typical payment — and what fixing your confirmed orders forward would do to your costings. Every Cambridge Currencies business client deals with a dedicated specialist by phone, from first quote to confirmed payment. Request a business quote for your USD payments.
