How a Philippine outsourcing firm gets paid by US clients

A Philippine agency with fifteen seats billing a US client $40,000 a month has a problem that has nothing to do with the work. The invoice is in dollars. The payroll is in pesos. Between those two facts sit five possible routes, and the gap between the best and worst of them is larger than most firms realise.

This is a walk through all five, with the published cost of each.

Route 1: the international wire

The client's bank sends a SWIFT wire to your Philippine bank. It is the default because it is what the client's finance team already knows how to do.

It is also the most expensive way to move the money. A traditional SWIFT wire runs $25 to $50 per transaction plus a 2 to 4% currency spread. On $40,000 that is $800 to $1,600 of spread before the flat fee, and the spread is the part nobody sees, because it arrives folded into the exchange rate rather than itemised on a statement.

Two other things go wrong on this route. The wire lands in pesos, converted on arrival at whatever rate your bank applied that morning, which means you never had a decision to make about timing. And correspondent banking adds intermediary deductions that can shave the amount again in transit, so the figure on the invoice and the figure in the account rarely match.

Route 2: PayPal

Fast to set up, and the most expensive per dollar of anything on this list.

PayPal Philippines charges 4.40% plus ₱15 on international commercial transactions, then a further 3.0% conversion fee in the APAC band to turn those dollars into pesos. Stacked, that is over 7% on a commercial receipt. On $40,000 a month, you are paying roughly $2,900 for the privilege of being paid.

It works. It is worth knowing exactly what it costs before it becomes the habit.

Route 3: Payoneer

Payoneer is built for this and a lot of firms use it. The published costs:

• 1% to receive by bank debit
• 1.2% to 4% to withdraw with conversion, depending on the route and currency
• 0.5% to move funds between your own Payoneer currency balances

The structural cost is not the percentage, it is the onboarding. Payoneer's mass payout cannot pay someone who is not already connected: each recipient registers through a link, links by Payee ID, and clears their own KYC before the first payment can go out. For an agency paying fifteen people that is fifteen signups. For one paying two hundred, it is a permanent job.

And Payoneer holds the money. It is a regulated e-money business, funds are safeguarded, and the balance is still theirs to freeze. Whether that matters to you depends on how much of one month's payroll is sitting in it.

Route 4: Wise

Worth being precise about, because Wise is widely misdescribed.

Wise does not mark up the exchange rate. It uses the mid-market rate and charges a separate, visible fee. That is a genuinely different model from the wire and from Payoneer, and anyone telling you Wise hides an FX spread is wrong.

Two things do apply in the Philippines:

A 12% VAT on every fee. Since September 2023, any customer with a Philippine address pays 12% Philippine VAT on top of the Wise fee. It applies to the fee, not to the amount sent, so a 0.57% conversion fee costs 0.638% and a 0.9% fee costs 1.008%. This is a government tax under the digital services VAT regime, not a Wise markup, and it does not appear on the public Philippine pricing pages.

Conversion caps. Philippine customers are capped at $10,000 per conversion and $50,000 per calendar month when converting or sending pesos into another currency. Read that carefully, because it is often quoted wrong: the cap is on converting out of pesos. It does not cap receiving or holding US dollars. For an agency that bills in dollars and only ever converts inward, this particular limit is not the binding constraint.

Route 5: your own US or EU account details

The fifth route changes the shape of the problem rather than the price of it.

Instead of your client sending an international payment to the Philippines, you hold account details in the client's own country. The client pays what looks to them like a domestic transfer, because that is what it is. No SWIFT, no correspondent chain, no intermediary deductions, and nothing for their finance team to learn.

Then the dollars sit as dollars. You decide when to convert, not your bank at 9am on the day the wire happened to land. And when you do convert, the pesos go out over local rail, InstaPay and PESONet, into local bank accounts.

This is what Oncade does. We issue US and EU bank account numbers to businesses, hold the dollars until you choose to move them, and pay out in local currency. Payouts land in 95 countries and territories and onboarding covers 227. Balances earn interest while they sit.

The part that actually costs you money

Firms optimise the fee and ignore the spread, and the spread is the larger number. World Bank corridor data puts the FX spread at 32% of the total cost of a US-to-Philippines transfer at $200, and 60% at $500. As the amount goes up, the flat fee stops mattering and the rate is almost the entire cost.

Which means the question to ask about any route is not "what is the fee." It is: who picked the exchange rate, and when? On a wire, your bank did, on the morning the money arrived. On the fifth route, you did.

One more thing worth knowing, because it removes an objection people assume is a blocker: the BSP's Manual of Regulations on Foreign Exchange Transactions permits Philippine residents to hold foreign exchange earnings abroad, with no surrender requirement. You are not obliged to bring the dollars home and convert them.

Picking a route

If you are billing under a few thousand dollars a month, the convenience of PayPal may be worth its cost, and you should at least know what that cost is.

Above roughly $50,000 a month, the spread on a wire is the single largest line item in your cross-border costs, and it is invisible. That is the point at which holding your own dollar account details stops being a nicety.

If you want to see what your corridor looks like, have a look at country coverage or talk to us.