Reference

Cross-Border Contractor Payments Glossary

Paying international contractors comes with its own vocabulary — banking rails, ID numbers, compliance checks, and pricing jargon. This glossary defines the terms you'll encounter when paying contractors in Mexico and Colombia, in plain English.

Last reviewed: August 14, 2026 · Free to reference and link to.

SPEI

SPEI (Sistema de Pagos Electrónicos Interbancarios) is Mexico's interbank electronic payment system, operated by Banco de México, the country's central bank. It moves money between Mexican bank accounts in seconds and operates 24/7, including weekends and holidays. For contractors in Mexico, a payment delivered via SPEI lands directly in their local bank account in MXN — no international wire delays or correspondent-bank fees. See how PagoDirect pays contractors in Mexico via SPEI.

CLABE

The CLABE (Clave Bancaria Estandarizada) is Mexico's standardized 18-digit bank account number, required for interbank transfers such as SPEI payments. It encodes the bank, branch, and account, plus a check digit that catches typos. When a Mexican contractor is onboarded for payouts, their CLABE is the key banking detail collected.

FX conversion

Foreign-exchange (FX) conversion is the exchange of one currency for another — for example, converting a company's USD into MXN or COP so a contractor is paid in their local currency. The rate applied determines exactly how much the contractor receives, which is why transparent conversion (seeing the payout amount before sending) matters when comparing payment platforms. See how PagoDirect prices FX conversion.

FX spread

The FX spread is the difference between the mid-market exchange rate (the rate banks trade at) and the rate a provider actually applies to your conversion. It is how many payment platforms earn revenue without charging a visible fee — a hidden markup on every payment. A 2% spread on $10,000/month in payments costs $2,400 per year, which is why comparing spreads matters more than comparing advertised fees.

International wire transfer

A traditional cross-border bank transfer routed through the SWIFT network, often passing through one or more intermediary ("correspondent") banks. Each intermediary can deduct fees and add delay, so wires typically take 1–5 business days and arrive with unpredictable deductions. Local payment rails like SPEI avoid this routing entirely for the final leg of the payment.

KYC (Know Your Customer)

KYC is the identity-verification process financial-service providers are required to perform before moving money on someone's behalf. For contractor payments it typically means verifying a government-issued ID and tax identifiers — such as the RFC in Mexico or the Cédula in Colombia — before payouts can begin.

RFC

The RFC (Registro Federal de Contribuyentes) is Mexico's federal taxpayer registry code, issued by the SAT (Mexico's tax authority) to individuals and businesses. Mexican contractors provide their RFC so payments can be documented correctly for tax and compliance purposes.

Cédula de Ciudadanía

The Cédula de Ciudadanía is Colombia's national identity document, issued to citizens by the Registraduría Nacional. It is the standard government-issued ID used to verify Colombian contractors during KYC checks before payouts are enabled.

Payor

The party sending the money — in contractor payments, the company paying its international team. Payors handle platform subscription costs and initiate payments. If your company pays contractors abroad, the Early Access program for companies explains how to get started.

Payee

The party receiving the money — the contractor. Payees care about the exchange rate applied, payout speed, and visibility into when money arrives. Contractors can join through the Early Access program for contractors.

Per-seat fee

A pricing model where a platform charges per contractor ("seat") per month, rather than a percentage of payment volume. Per-seat pricing is predictable as payment amounts grow, but the seat fee should be evaluated together with the FX spread to understand total cost. Compare on the PagoDirect pricing page.

Seguro de Vida

Spanish for "life insurance." In the context of contractor benefits in Mexico, it refers to life-insurance coverage offered to contractors as part of their payment relationship — a localized benefit that full-time employees often receive but independent contractors usually lack.

MXN

The ISO 4217 currency code for the Mexican peso, the official currency of Mexico. USD-to-MXN conversion happens at the moment a cross-border contractor payment is exchanged before local delivery via SPEI.

COP

The ISO 4217 currency code for the Colombian peso, the official currency of Colombia. Colombian contractors are paid in COP after USD-to-COP conversion. See contractor payments to Colombia.

Missing a term?

We keep this glossary current as cross-border payments evolve. If a term you ran into isn't here, tell us and we'll add it.

You're welcome to link to this page or to individual terms (each has a stable anchor, e.g. glossary.html#spei).