Paying Independent Contractors in Mexico

Payments to Mexico can be quite expensive due to the fees associated with currency conversion from dollars to Mexican Pesos. On average, you lose 3 - 7% of the transfer value on fees using traditional banks. The overall cost includes, Swift fee, exchange rate mark-up and receiving fee on the recipient side. This means that transferring $2000 to Mexican Pesos can cost around $40 - $70.

Let’s see how you could reduce these fees.

1. Money Transfer Services

The good news is that there are Money transfer Services that could save you over 40% on international transfer fees. Here are some of them.

Pay Your Employees With BatchTransfer

BatchTransfer has an easy-to-use instant payments system that allows you to make multiple payments, for both domestic and international, in one go. Small businesses and enterprises can get access to BatchTransfer with no additional cost after getting a Wise Business account.

BatchTransfer’s core strengths for payroll:

What sets BatchTransfer apart is its commitment to providing the mid-market rate for currency conversions. This means that businesses get a fair and transparent deal when making international payments.

Another perk of using BatchTransfer for international payroll is its extensive coverage of over 160+ countries and 40+ currencies! With features like automatic payment scheduling and API integration, small businesses can streamline their payroll process, freeing up valuable time and resources for other important tasks.

How can businesses use BatchTransfer for payroll?

Businesses can send up to 1000 payments with a single click with BatchTransfer.

Connect to your accounting software

You can easily manage and reconcile your mass payments through accounting software integrations such as QuickBooks or Xero.

US-based business can access BatchTransfer at no extra charge

Start making payments
with BatchTransfer >>

Pros:

• Real Exchange rate
• High Transfer limit - up to $1,000,000
• Low transfer cost
• Recipients don’t need a Wise account to receive payments
• Instant transfer for some currencies
• Accepts Payments through debit and credit card, ACH direct debit and Wire transfer
• Bank-level security.

Cons:

• Business and personal accounts need to get verified first
• No Cash Pick-ups
• Recipient cannot track the status of the transfers

OFX

OFX doesn’t charge transfer fees however, they make money by adding a mark-up on their exchange rate which can vary according to the transfer amount and your transaction history with them. It’s usually higher for smaller amounts and vice versa.

Pros:

• No transfer fees
• No transfer limit
• Operates 24 hours a day, 7 days a week

Cons:

• Exchange rate mark-up
• Doesn’t offer same-day delivery
• Minimum transfer is $2,000

TorFx

Just like OFX, TorFX doesn’t charge transfer fees but makes money from exchange rate mark-ups.

Pros:

• No transfer fees
• Can make transfers both online and over phone
• Operates 24 hours a day, 7 days a week
• Can be cheaper for large transfers (above $10,000)

Cons:

• Exchange rate mark-up
• Can be slow at times
• Expensive for smaller amounts (below $10,000)

2. Payroll services

Bigger companies often employ payroll software for larger volumes but this usually comes with monthly subscriptions and cost per employee. But this reduces errors and eases tax reconciliation. However, not that many support global payroll. But here's one good example.

BitWage

In order to run Payroll using BitWage, the employees need to be invited to set up a receiving account so even though the service is cost effective for companies, the challenge comes from convincing employees to use BitWage to receive their wages. Unfortunately, as it can be quite expensive for them due to 1% charge per deposit, or $15.99 per month for the Premium Invoicing service, they tend to use other services that charge no fee for receiving payments.

Pros:

• Helps manage employee salary and sends necessary form to fill out
• Less expensive for employers

Cons:

• Best suited for workers who prefer to be paid in Bitcurrency.
• Employees need to use the service too in order to receive payments

3. Banks

Stanford Federal Credit Union

They’re one of the banks that offers real-exchange rates. They partnered with Wise to execute international payments and the fees are relatively the same. However, there’s a maintaining balance depending on the type of account you have and an opening deposit of $100.

Pros:

• Real Exchange rate
• Low transfer cost
• Instant transfer for some currencies

Cons:

• Requires maintaining balance and opening deposit
• No Cash Pick-ups
• Recipient cannot track the status of the transfers