How it works

How a payout runs, step by step

Follow the $2,000: quoted, funded, converted, sent, credited, unless it's held for compliance or returned for wrong details. The rate is quoted before the money arrives, so someone carries the FX risk until conversion.

A contractor payout through a prefunded local account (US company to a contractor in Mexico)

1. Onboarded: KYC (identity checks), a W-8BEN (the IRS form for a foreign person; a W-9 for a US person), bank details, an address with town and country in separate fields, a sanctions screen. What can go wrong: no W-8BEN means presuming a US person; Swift may reject a one-line address from November 14, 2026.
2. Quoted: a rate valid 30 seconds to 24 hours in the APIs I read; the provider carries the market risk meanwhile, so longer locks cost a wider spread. What can go wrong: the quote expires before the dollars arrive.
3. Funded: by ACH, wire or balance, on US banking days. What can go wrong: a US holiday or a missed cut-off.
4. Held, sometimes: screening of payer, payee, payee's bank and destination. What can go wrong: a false positive, a missing purpose code, a payee bank under a US order. Blocked funds need a licence from OFAC, the US sanctions office.
5. Converted: into pesos already in Mexico, bought in bulk ahead of time at a local partner. What can go wrong: India and Brazil require a locally authorized FX institution, in local hours.
6. Sent: by SPEI to the contractor's CLABE (an 18-digit account number); Banxico, the central bank, settles it and issues a receipt. What can go wrong: a closed account bounces back; a wrong but valid CLABE pays a stranger, since SPEI doesn't check names.
7. Credited: usually within 30 seconds. What can go wrong: with Banxico's approval, a bank can delay crediting MXN 50,000 or more a day.
8. Documented: the contractor invoices under Mexican rules; the US payer files no 1099 or 1042-S for a foreign person with a W-8BEN working abroad.

An EOR payroll run (Mexico, one month)

1. Pre-funding invoice in dollars at the EOR's rate, on the first business day. One provider's terms say "usually 14 days", and that can't be extended.
2. Cut-off for changes, between the 5th and the 20th. What can go wrong: a late change means an off-cycle run with a fee.
3. Funded and converted into the EOR's Mexican entity, or a partner's. What can go wrong: the client pays late; the EOR fronts the money, or pays late and the worker may quit with severance.
4. Calculated and paid: gross to net under the 2026 tax tariff, a CFDI (the legal electronic payslip) per payment, pesos by SPEI at least every 15 days.
5. Remitted and reconciled: tax and social security by the 17th of the next month, an invoice for actuals, and the aguinaldo (a year-end bonus of at least 15 days' pay) by December 20. What can go wrong: the peso moved between invoice and pay day.

A wire has the same shape, but the money travels hop by hop, and Swift puts about 80% of the elapsed time in the last mile, at the receiving bank. Either way the rate is fixed before the money lands, and the provider carries the FX risk in between.

Payout methods compared

I inferred the cash pickup reversibility myself; hop fees and markups are vendors' published ranges, as of October 2026.

More on pay rules in Employee or contractor.

A marketplace paying 2,000 sellers in Mexico a few hundred dollars each every week would lose a big slice of each payout to a wire's flat fees. Pesos already in Mexico, sent over SPEI, cost a fraction of that and land in seconds.

Why do wires survive? They reach any country, settle in dollars and carry amounts local caps don't allow. Swift is answering: gpi tracks each payment end to end by its UETR reference and promises fee transparency per hop, and a retail scheme announced in September 2025 promises upfront fees and full value, reportedly live since July 2026 in 17 countries, including the US, Canada, the UK, India and the Philippines.