A Philippine business selling to someone in another country has more ways to get paid than it did ten years ago, and most of them work. Access is no longer the problem. The work now is picking a route that matches how the customer wants to pay, then handling the things that go differently once money crosses a border: who sets the exchange rate, why cards get declined more often, what the fees are, and what happens when a customer in another time zone disputes a charge.
This guide goes through those in the order a business tends to run into them.
Start with how the customer wants to pay
A freelancer with two retainer clients in Singapore and a resort taking a deposit from a stranger in Toronto are both accepting international payments, but they are not solving the same problem. The freelancer can ask the client to use whatever is convenient. The resort has to work with what the guest already has in her wallet, because nobody opens a new account to pay a deposit.
The freelancer case is the larger one by headcount. Most estimates put the Philippines at around 1.5 million online freelancers, and a Payoneer and GCash survey found that those who serve both local and overseas clients earn 57 percent more per hour than those who only work locally.
The resort case is where most of the money is: tour operators, schools enrolling students from the region, online stores shipping to Filipinos abroad, software companies selling subscriptions to anyone with a browser.
What separates the options is how much the customer has to do.
If your clients already pay you through PayPal or Wise and nobody is complaining, there is no reason to move them. The fee is a few percent, the client knows the flow, and a change on your side becomes a chore on theirs. We wrote a longer comparison of PayPal and local options if you want the detail.
The calculation changes when you sell to people you have never spoken to. An online store, a booking page, a course, a subscription: those customers expect to type a card number at checkout and be done.
Visa and Mastercard issued abroad can be accepted by any Philippine business with an online payments account that supports foreign cards. With most providers, PayMongo included, that is switched on per account after a short risk review rather than by default, because foreign cards carry more fraud. Once it is on, the same account that takes a GCash payment from Cebu takes a Mastercard from Melbourne.
Pesos or dollars
Once a card is involved, the next question is what currency to show and what currency to charge. If most of your customers are Filipino and a few happen to be abroad, show and charge pesos. The foreign customer's bank will convert the amount at its own rate, usually with a markup of a few percent that only shows up on their statement, and your books stay in one currency.
If a real share of your revenue comes from overseas, or your prices are compared against international competitors, you will want to show prices in US dollars. A travel agency quoting USD 450 for a package reads as normal to an American traveler. PHP 26,000 makes them open a calculator. Showing a dollar price and charging a dollar amount are two different things, though.
Most Philippine processors, PayMongo included, process and settle card payments in pesos only. You can display USD, but the charge that reaches the customer's card is the peso equivalent you computed at checkout, and their bank converts it back at its own rate. If the customer must be charged in dollars, the realistic routes today are a platform account like PayPal or Wise, or a bank wire into a foreign currency deposit account.
What happens when a foreign card pays a peso amount
Based on our experience, here is what actually happens when a foreign card pays a peso amount on PayMongo, since this is where most of the confusion sits. On your side nothing changes. You create the charge in PHP, whether that is a Payment Link, an invoice or a Payment Intent through the API, with the amount in centavos like any other.
The customer enters a Visa or Mastercard from any country. If their bank wants to check, they get a 3D Secure prompt from that bank, usually a one-time code or an approval in their banking app. Once approved, we settle the peso amount to you on your normal payout schedule, with the foreign card surcharge applied to the fee.
The customer's statement shows the charge in their home currency, converted by their bank at its own rate, which is why the figure they see will not exactly match whatever dollar price you showed them. If you display USD pricing, say on the checkout that the charge is made in PHP and the final amount depends on their bank's rate. That one sentence prevents a surprising number of support emails.
There is a tax reason to think about this early. Under Section 108(B)(2) of the Tax Code, services rendered to a nonresident who is outside the Philippines, paid for in acceptable foreign currency and accounted for under BSP rules, can qualify for zero-rated VAT.
KPMG has a readable summary of what the BIR and the courts have required as proof. The income is still subject to income tax and the documentation standard is strict. Note too that a card payment processed in pesos is not a foreign currency payment, so the clients you can zero-rate are the ones paying by wire or through a platform in USD.
If you are a VAT-registered service business with foreign clients, invoice those clients in the foreign currency and keep the contract, the invoice and the bank record together. Talk to your accountant before relying on it.
Foreign cards get declined more, and cost more
From the customer's side, paying a merchant in Manila with a card from Frankfurt looks like any other online purchase. On the issuing bank's side it looks like a cardholder paying an unfamiliar merchant in a country they have never transacted in, and the bank's fraud model has less to go on. Cross-border transactions are declined at a higher rate than domestic ones across the industry, and a share of those declines are false positives: real customers, real cards, blocked by a cautious issuer.
Some of that is out of your hands. Some of it is not. Make sure 3D Secure is available on your checkout, so a customer who gets flagged can confirm the payment with a one-time code from their bank instead of being bounced. Check what your business name looks like on a card statement; if it is an abbreviation or a holding company, a customer abroad has no way to recognize it, and "I do not recognize this charge" is the most common dispute reason there is. And expect the first decline. Some bank somewhere will block a transaction for no reason you can see. Have a short message ready that asks the customer to approve it in their banking app or try another card. Most of these go through on the second attempt.
The cost is higher too. Card networks charge more interchange on cross-border transactions and processors pass that through.
At PayMongo, payments from non-Philippine cards carry a 1% surcharge on top of the standard card rate. Build it into the price. For most businesses it is a small fraction of the margin on a sale they could not otherwise make.
Disputes take longer to resolve when the issuing bank is overseas, the evidence standards vary by region, and the customer may have forgotten what they bought by the time the statement arrives.
Most chargebacks from foreign customers are not fraud. They are a customer who could not find how to cancel and called their bank instead. A visible refund and cancellation policy on the checkout page and an order confirmation sent by email prevent more disputes than any amount of evidence wins afterward. The mechanics of chargebacks are covered in our guide earlier on.
If you use PayMongo
Foreign Visa and Mastercard are enabled per account after a short risk review. Once on, they work across every channel: Payment Links for a one-off charge, Invoices for a client on retainer, Hosted Checkout and the Shopify and WooCommerce plugins for a store, and the API for anything custom. Everything processes and settles in pesos, on your standard payout schedule, with instant settlement available for a fee when you need the cash sooner. Charging the customer in US dollars is not something we offer today.
If you already use PayMongo, ask support to enable foreign cards on your account. If you do not, create one and ask for foreign cards to be enabled when you set up.
Frequently asked questions
How do I receive payment from a foreign client as a freelancer in the Philippines?
The usual options are a platform account such as PayPal or Payoneer, a bank wire, or an invoice with a card payment link. The invoice route lets the client pay by card without opening an account anywhere, and the funds settle to your Philippine bank in pesos.
Should I charge international customers in pesos or US dollars?
Most Philippine providers, PayMongo included, process card payments in pesos. You can display USD prices to foreign customers, but the charge itself is in PHP and the customer's bank converts it at its own rate. If the customer must be charged in dollars, that currently means a platform account such as PayPal or Wise, or a bank wire.
Is income from foreign clients subject to VAT in the Philippines?
Services rendered to nonresidents outside the Philippines and paid in acceptable foreign currency can qualify for zero-rated VAT under Section 108(B)(2) of the Tax Code, subject to documentation requirements. The income remains subject to income tax. Confirm your situation with an accountant.