Inside U.S. Bank's tariff payments strategy

• Key Insights: U.S. Bank is adding payment services to counter tariff risk. 
• What's at Stake: Businesses are concerned about higher costs due to inflation. 
• Forward Look: Other banks and payment companies are tackling the same issue. 
  

With tariff threats mounting, U.S. Bank is pushing a payment strategy to enable businesses to operate internationally while storing funds inside the U.S. 

"Tariffs are the most obvious thing that's been in the news. But the other big issue is the weakening dollar," Tarek El-Yafi, head of U.S. Bank Global Transaction Services, told American Banker. "That's a double whammy." 

U.S. Bank has built what it calls a "suite" of foreign currency accounts, which enable businesses to hold funds in up to 23 foreign currencies, such as euros, pounds, yen and Australian dollars, while keeping those balances in the U.S. in FDIC-insured accounts. The bank says this enables companies to manage payments to and from suppliers, minimizing currency conversions and foreign exchange volatility.

"You can derisk that cash by bringing it back into the U.S." El-Yafi said.

Tariff troubles

U.S. Bank is particularly focusing on U.S. based companies with cross-border payment needs that want to avoid managing accounts in non-U.S. jurisdictions.

Banks and fintechs have applied numerous methods in recent years to enable smaller businesses to move funds between countries while avoiding third parties such as correspondent banks, which add fees for payment processing and heighten foreign exchange risk given the longer settlement times.

To avoid this, firms such as Ripple and the bank-led R3 blockchain consortium use distributed ledgers to sell fast processing and lower FX risk for cross-border payments. U.S. Bank is relying on its own scale and ability to support multiple currencies inside the U.S. to sell small businesses on the ability to use a U.S.-regulated and insured bank to execute payments directly in other countries in local currencies without converting U.S. dollars beforehand. The bank is also offering a reporting dashboard to consolidate visibility across global banking accounts.

Read more about tariffs. (Tariffs and Banking: Key Insights and Analysis | American Banker)

In addition to economic challenges such as higher prices for international supply chains, the bank is bracing its clients for potential retaliatory moves from other countries that may complicate working with banks based outside of the U.S. 

"You don't know what these countries are going to do," El-Yafi said. "They make it harder to do business in that country. "What will that do for middle-market businesses? Will there be a risk of cash being trapped outside of the U.S.?" El-Yafi said. 

U.S. Bank is also backing up earlier investments in business payments technology.

The bank in July began offering working capital loans to business clients through a partnership with fintech Liberis, countering payment firms such as PayPal and Block that use future payment flows to offer fast decisions on short-term loans to merchants. In another July partnership, U.S. Bank teamed with the blockchain-powered WaveBL platform to streamline trade finance by encrypting digital document transfers between trade partners and their banks, reducing the need for paper.

And earlier in 2025, U.S. Bank introduced a spend management app for businesses. This followed a U.S. Bank-led  survey of small-business owners that found 80% of businesses want "bundled digital banking" business tools. 

"With free trade and the global rules-based system under assault, risks are increasing," Eric Grover, a principal at Intrepid Ventures, told American Banker. "U.S. Bank's providing a platform for American firms operating abroad to manage their cash and payments from a U.S.-domiciled platform. That has to have a market, particularly I would think with midsize firms."

What other banks are doing

Banks and payment companies are ramping up efforts to sell technology that expedites B2B payment processing, thus shortening settlement windows. Goldman Sachs, for example, has augmented its payment technology to address supply chain friction, while Citizens has added real-time billing and BNY Mellon has joined the Marco Polo global trade finance and payments network. Capital One partnered with technology firm Melio to power supply-chain finance card payments for firms that use digital payments but get supplies from check-centric suppliers.

And HSBC, for example, offers a multicurrency digital wallet that is available to midsize businesses that have been traditionally underserved, Aaron McPherson, principal at AFM Consulting, told American Banker.

"Maintaining accounts in foreign currencies, while still under the protection of FDIC insurance, gives businesses greater flexibility in handling tariffs and other disruptions in international trade," McPherson said.

Among large payment companies, Mastercard has added artificial intelligence to improve payment processing.

These companies are chasing a global B2B payments market that's expected to slow due to tariffs, compounding preexisting challenges.

"Even before the recent rounds of tariff uncertainty, the intersection of payments and treasury management was growing as interest rates rose and both banks and their customers re-discovered the value of cash deposits," Aaron Press, research director of Worldwide Payment Strategies, told American Banker. Treasury management is especially complicated for organizations that deal with global trade, according to Press.

"Tariffs are just one element of a complex environment that also includes FX challenges and shifting regulations," Press said. "Having the ability to move funds quickly and predictably is critical to optimizing the value of these programs. Banks with broad global capabilities are better positioned to help their customers manage."