A foreign currency payment is a payment denominated in a currency that differs from the home or account currency of the payer, the payee or both. Examples include a UK company paying a supplier in US dollars, a traveller paying in euros with a card billed in yen, or a remittance sent in one currency and received in another. Such payments normally involve currency conversion at some point, by the payer's bank, the payee's bank, a card network or a payment provider.
Foreign currency payments can be cross-border, as with an international wire transfer, or domestic, such as a dollar payment between two banks in the same country. Costs include exchange rate margins, sending and receiving fees and foreign transaction fees on cards. Businesses that make many such payments often hold accounts in the relevant currencies and manage their currency exposure with forwards or other hedges.