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Who should absorb international bank transfer charges?
Thread poster: Alba1

Alba1  Identity Verified
Local time: 06:18
French to English
+ ...
Jun 12, 2008

Hello,

I've recently come back to freelancing. I have done some jobs for a translation agency in the UK, whose HQ is in Ireland. I deal with the UK office. Their POs are in sterling and the invoice system they ask me to use is in sterling.

However, when they make payments into my UK bank account, I am charged £6 each time by my bank as it is an international transfer, originating at the agency's head office in Ireland.

My question is, do agencies or freelancers normally bear these transfer fees?

Many thanks.


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James McVay  Identity Verified
United States
Local time: 00:18
Russian to English
+ ...
Cost of doing business Jun 12, 2008

Both parties pay fees for int'l fund transfers, and I absorb the cost of my part in the transaction -- not that I like doing it. I just view it as a cost of doing business.

My experience has been that PayPal and Moneybookers charge lower fees than banks, at least when money is moved from Europe to the U.S. My understanding is that they don't charge the party making the payment. Makes me wonder why so few outsourcers like to use their services.


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Jan Willem van Dormolen  Identity Verified
Netherlands
Local time: 06:18
English to Dutch
+ ...
Both in EU? Jun 12, 2008

From your message, I get the impression that both you and your agency/client are in the EU. In that case, there shouldn't be any bank tranfer costs at all. (Provided that both parties mention their IBAN and BIC numbers.)
The EU actually forbids charging transfer costs if above conditions are met.


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lexical  Identity Verified
Spain
Local time: 06:18
Portuguese to English
no right answer Jun 12, 2008

The fact is that it varies, and it's up to you to agree who pays what with your customers. Bank transfers are now extremely cheap within the Euro zone and my customers simply absorb the 1-2 euros that they have to pay their bank. In earlier times, when transfers were more expensive, most of them paid all the costs, but a few only paid the expenses at their end, leaving me to pay my expenses.

As I say, it's up to you to negotiate something with your customers.


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Ralf Lemster  Identity Verified
Germany
Local time: 06:18
English to German
+ ...
EU Directive applies to *euro* transfers Jun 12, 2008

Hi Jan Willem,
From your message, I get the impression that both you and your agency/client are in the EU. In that case, there shouldn't be any bank tranfer costs at all. (Provided that both parties mention their IBAN and BIC numbers.)
The EU actually forbids charging transfer costs if above conditions are met.

That applies to transfer in euros; the relevant EU directive does not apply to payments in pound sterling, which appear to be involved here.

Best regards,
Ralf


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lexical  Identity Verified
Spain
Local time: 06:18
Portuguese to English
euro zone not EU Jun 12, 2008

Jan Willem van Dormolen wrote:

From your message, I get the impression that both you and your agency/client are in the EU. In that case, there shouldn't be any bank tranfer costs at all. (Provided that both parties mention their IBAN and BIC numbers.)
The EU actually forbids charging transfer costs if above conditions are met.


This is a common misunderstanding. In fact, both parties have to be in the Euro zone, not just in the EU.


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Ralf Lemster  Identity Verified
Germany
Local time: 06:18
English to German
+ ...
EC Regulation 2560/2001 vs. EU Payment Services Directive Jun 12, 2008

Hi again,
Very often this subject leads to some confusion...

Since 2001, standard cross-border euro payments were governed by EC Regulation 2560/2001, according to which cross-border euro payments complying with certain standard could not cost more than a comparable domestic euro payment.
Although the UK was covered by this regulation, UK banks were exempted in practice as domestic euro payments were virtually non-existant within the UK.

Since 28 January 2008, however, a new regime has been in place, with the introduction of the Single European Payments Area. SEPA is governed by the EU Payment Services Directive ("PSD" - Directive 2007/64/EC).
Although full implementation of the PSD will not happen before 2009, SEPA payments are already possible. See http://www.europeanpaymentscouncil.eu/ for more background information.

HTH, Ralf


[Edited at 2008-06-12 18:18]


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xxxJPW  Identity Verified
Local time: 05:18
Spanish to English
+ ...
Simple solution Jun 12, 2008

Just set up a euro account at your UK bank: in this day and age it should not be a major issue for them to do this. My bank offered to set one up for me, must get round to it someday... (my accounts are in sterling too).

But here's how it works for me:

any money due to my bank account (from Europe) goes through the Dublin branch (or 'international office' as they grandly call it) which processes it in euros. It then gets converted to sterling at the going rate and ends up in my account. I should point out my bank is a local, Northern Irish one, so if they can get their act together, the leading banks on the mainland should be able to do it too. Or maybe it's because we effectively use two currencies on this island. Personally I find it easier to deal in Euros anyway, but as long as people are giving me money, I'll take any kind....

I distinctly remember on the advice slips they send, it says in big letters "no charges for intereuropean transfers" or words to that effect, ah, yes here it is:

"From 1 Jan 2007, all euro payments to EU/EEA must quote a valid BIC and IBAN" - exact wording.

I take this to mean, as pointed out above by someone, that as long as BIC and IBAN are present there is NO charge. In fact, I fail to see how the transaction can be carried out effectively without these pieces of information.

Above this official notice for the BIC and IBAN codes on this statement, there is the summary of the various charges:

Cheque charge,
Advice charge,
Telephone charge, and
Miscellaneous charge - all of them totalled at EUR 0.00 and NONE of which are applicable anyway, as it is an electronic transfer. Nor is commission charged on the exchange rate either. It goes in as euro and I withdraw it from a hole-in-the-wall as sterling. Everyone's happy.

Basically your bank is ripping you off IMO, something they're very good at anyway. I would query them on this one, i.e. why they have not explained the most cost-effective way for you to receive payments. This is what they are supposed to do. It's called customer service. And you may as well try and recoup the charges too, the worst they can say is "no".

What you need, therefore, is an account that operates in Euros alongside your sterling account. If they can't or won't do it, it's time to change bank.

I hope this can work for you too good luck.


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Alba1  Identity Verified
Local time: 06:18
French to English
+ ...
TOPIC STARTER
Thank you Jun 12, 2008

Thanks for taking the time to reply and for all the info.

I am a Brit, based between the UK and Italy (officially resident in Italy). So I have a couple of UK bank accounts (sterling) and an Italian bank account (euro). When working for a UK agency, I naturally gave them my UK bank details, and it has only been in the last few days that this business of the bank charges (due to the Irish head office) has come to light.

I had not heard about a euro account linked to a sterling account.

I will also look into having the payments made to my Italian bank account. I will ask the bank when I'm next in Italy.... though in general my experience with Italian banks has not been very positive and I had assumed they would have higher transfer charges than my UK bank. It may, however, be the solution!

Thank you.


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MariusV  Identity Verified
Lithuania
Local time: 07:18
English to Lithuanian
+ ...
one more question Jun 12, 2008

If I understand it correctly (just from the point of pure logics), if a translator does a job for 100 EUR, he/she SHALL receive 100 EUR. Not less, and not more. Why he/she shall cover the costs of the client? We do not charge any extra cost for electricity or internet we pay? Of course, best is when the parties agree on that before the deal, but shouldn't that thing "I shall get what I worked for" be something like a "default" thing?

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Paul Merriam  Identity Verified
Local time: 00:18
Member (2008)
Russian to English
+ ...
From the other direction Jun 13, 2008

MariusV wrote:

If I understand it correctly (just from the point of pure logics), if a translator does a job for 100 EUR, he/she SHALL receive 100 EUR. Not less, and not more. Why he/she shall cover the costs of the client? We do not charge any extra cost for electricity or internet we pay? Of course, best is when the parties agree on that before the deal, but shouldn't that thing "I shall get what I worked for" be something like a "default" thing?


The agency at which I used to work would say that it's logical that if we agree to pay EUR 100, that's what we should pay. The fact that you don't have an American bank account that would allow us to simply send a check in US dollars (which is how American agencies usually pay their American translators) doesn't mean that we should pay the costs associated with your choice to bank in Lithuania. Aren't those your costs? Why should we pay them?

Of course, an American agency wouldn't necessarily have any idea as to what the transfer fees are, so it's quite all right to raise your rates slightly for clients outside of Lithuania to account for these fees or to charge them as a separate line item. If you aren't going to absorb these costs, you need to make that clear in advance.


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The Misha
Local time: 00:18
Russian to English
+ ...
There's no such thing as "should" Jun 13, 2008

As a freelancer you are in business, and so is the agency that contracts your services. This being the free world (presumably), it is what you two as parties to a contract agree to. There are no clear cut or government mandated (Thank God for that) solutions.

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ViktoriaG  Identity Verified
Canada
Local time: 00:18
English to French
+ ...
I know there will be disagrees, but here goes... Jun 13, 2008

I know that many people, especially in Europe (where businesses often absorb transaction charges when you pay by debit card) believe it is OK to bear the transfer charges. However, the simple notion of getting paid for your work says otherwise. In fact, normally, you are supposed to get the total amount of your invoice (not the invoice amount minus the fees). Especially if you offer different payment methods for the client to choose from - bank transfers are always the most expensive payment method, except within the Euro zone.

Of course, I live in Canada and have almost no European clients, so my opinion or advice may not be so relevant here. Still, my clients bear the charges when they transpfer payments to me - and they never asked me to pay even part of the transfer charge.

Of course, in other parts of the world, the common practice may be different - but my clients are all over the world as well.


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Caroline Makropoulos  Identity Verified
Greece
Local time: 07:18
Greek to English
+ ...
Can you use Moneybookers? Jun 13, 2008

I have used Moneybookers.com very successfully, which has much lower charges than bank charges.

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John Rawlins  Identity Verified
Spain
Local time: 06:18
Spanish to English
+ ...
The sender always chooses Jun 13, 2008

When making an international transfer, the bank requires the sender to choose one of three options:

a) pay all the charges
b) pay the sender's charges, but not the receiver's charges
c) pay no charges - and effectively ensuring that all charges are deducted from the transferred sum.

Each of these options has an internationally agreed code that appears on the transfer order, so you can easily work out the sender's true intentions. Sometimes, banks (and I am thinking of Spanish banks here) will try and deduct a receiver's charge, even if the sender has paid all charges. However, if challenged they will return the money immediately with a mumbled apology.

Personally, I believe (b) is a reasonable compromise - but everything is negotiable.


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