Is sending a credit card to offshore subcontractor the best way to avoid conversion fees?

I’m looking for a way to pay to an offshore subcontractor regularly without paying too much to payment systems.

Somewhere - either here or on some podcast (was it Release Notes? hmm) I heard how a company owner said that they just sent a guy a credit card, and he takes cash in ATM or buys stuff with it, and they transfer payment money to it. They claimed that the usual transfer fees and conversion fees (hello Paypal!) do not apply - the conversion happens at the current local currency conversion rate, and that’s it.

Neat, but perhaps too neat?

I went to my bank to ask them what it takes to have another CC account for my small company, and are there any potential problems with this. The guy at the bank clearly did not like the idea of their bank card being god knows where. He said that the card would still have my company name on it, not the subcontractor name, and that can potentially cause some security incidents with the local banks maybe. Other than that he couldn’t come up with immediate counter-arguments tho.

(Also, my accountant said that legally - I’m in Canada - if I pay a person (not a company) oversees, I should pay taxes for that individual in Canada at 40%(!) rate. But that is OK, the guy has a company registered.)

So - anyone has an experience doing that - i.e. sending a physical credit card as a payment channel?


I haven’t heard of this.

I wonder if TransferWise is a good alternative for you? The fees to transfer money to another country/currency via TransferWise are low, and the exchange rate is the inter-bank rate.

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Looks good. Have you use it?

Oh, nevermind, I see you post about it. Will check it out, thanks!

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I use TransferWise frequently. For example, I use it to receive my monthly FastSpring payout, and convert it from USD to EUR. I get a nice saving every month compared to the old “let FastSpring pay out directly to my Spanish account” approach.

I use PayPal and pay $2.99 fee for each transfer. TransferWise is also good.

I would not feel comfortable giving a credit card to a contractor.

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