If you are paying a Latin American contractor through your US bank, you are almost certainly losing $80-150 per transfer to fees and exchange rate margins you cannot see. This article breaks down exactly what each payment method costs on a real $3,000 monthly contractor payment — with specific numbers, not approximations.
The test case: $3,000/month to a contractor in Colombia
To make this concrete, we use a $3,000 USD payment to a software developer in Bogotá. This is a representative number for a mid-level Latin American contractor working full-time for a US business. The same math applies proportionally to smaller or larger payments.
Option 1: Bank wire transfer
- •Outgoing wire fee: $25-45 (charged by your US bank, regardless of destination)
- •Intermediary bank fees: $10-25 (often deducted from the amount before it arrives)
- •Exchange rate margin: 2-3% above mid-market rate (the hidden cost most businesses never calculate)
- •On $3,000 at 2.5% margin: $75 lost in the exchange rate alone
- •Total cost above the transfer amount: $110-145 per payment
- •Annual cost at monthly cadence: $1,320-1,740 in pure overhead
- •Your contractor receives: approximately $2,855-2,890 worth of COP instead of $3,000 worth
Option 2: PayPal
- •Sending fee from bank account: 0% (looks free — this is the trap)
- •Currency conversion fee: 4.5% above mid-market rate (this is where PayPal makes its money)
- •On $3,000 at 4.5%: $135 lost in conversion
- •Recipient withdrawal fee in Colombia: additional 1-2% when converting to local currency
- •Total effective cost: $150-200 per payment
- •Annual cost: $1,800-2,400
- •Additional problem: PayPal freezes business accounts frequently for international payments — unreliable for payroll
Option 3: Wise Business
- •Transfer fee: 0.4-0.9% of the transfer amount (shown transparently before you confirm)
- •Exchange rate: real mid-market rate with no markup
- •On $3,000: $12-27 total fee
- •Your contractor receives: $2,973-2,988 worth of COP at the real exchange rate
- •Annual cost: $144-324
- •Compared to bank wire: saves $1,000-1,400 per contractor per year
- •Compared to PayPal: saves $1,500-2,000 per contractor per year
The math at scale
Ejemplo
Real scenario: a 10-person US agency with 4 Latin American contractors each earning $3,000/month. Currently paying by bank wire: $110 x 4 x 12 = $5,280/year in overhead fees. Same payments through Wise Business: $20 x 4 x 12 = $960/year. Annual savings by switching: $4,320 — enough to fund an additional month of one contractor's salary.
When bank wire still makes sense
- •Payments over $50,000 where the percentage-based Wise fee exceeds the flat wire fee
- •Recipients in countries where Wise does not operate (check wise.com/us/send-money for coverage)
- •When your bank offers no-fee international wires as part of a business account package
- •One-time large transactions rather than recurring monthly payments
Disclosure: CréditoClaro may receive a commission if you open a Wise Business account through our links. This does not affect what you pay, and our comparison reflects actual fee structures as of 2026.