U.S.-based translator wants to phase out payment by checks/How?
Thread poster: Robert Forstag
Robert Forstag  Identity Verified
United States
Local time: 13:36
Member (2003)
Spanish to English
+ ...
Jul 5, 2011

I am interested in phasing out payment by checks from my U.S. and Canadian clients. My fundamental question concerns the easiest and cheapest way to do this, for both the client and myself. PayPal really only works for fairly small payments. Wire transfers via Western Union or MoneyGram are prohibitively expensive. So that leaves bank transfers.

Would requesting bank transfers on a regular basis from U.S. and Canadian-based clients seem to be an unreasonable imposition? What is the typical cost associated with such a transfer?

The main reason that this issue arises for me is that I travel a good deal and I want to get away from imposing upon third parties to receive and deposit my checks.

Any helpful suggestions regarding my options in this regard will be appreciated!


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philgoddard
United States
Member (2009)
German to English
+ ...
. Jul 5, 2011

Hi Robert

As you know, I'm a Brit living in the US, and I'm still amazed at how people in this country cling on to the old-fashioned check as a means of payment. In Europe, the check is all but dead, and all my many customers there pay by wire transfer. It's far easier, especially if you have 100 suppliers to pay at the end of the month, and it's free in the UK. And yet I had a US customer this week who told me that if I wanted payment by wire transfer, I'd have to pay their charges.

Anyway, I'd be interested in others' views.
Best wishes
Phil


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Henry Hinds  Identity Verified
United States
Local time: 11:36
English to Spanish
+ ...
Direct Deposit? Jul 5, 2011

I know that direct deposit works fine, I use it to receive payments, though not for translating. There is no cost involved. I am not sure if it can be done online, you so would have to check with the banks involved to find out those mechanisms. It is of course quite convenient when both you and the payer have physical access to branches of the same bank. I would suggest contacting your bank(s) for more information.

Within the US it should work fine, but with Canada who knows?


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Glenda Janssen  Identity Verified
Local time: 12:36
English to Italian
+ ...
Personal Checking Jul 5, 2011

I can give you only a very personal answer, as I'm not an outsourcer, so I don't have to send lots of payments out to multiple people, but my online banking, through several major U.S. banks, allows me to send wires easily and effortlessly, with fees between $3-$5.

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Nathaniel2
Local time: 19:36
Slovak to English
Also from a personal perspective Jul 5, 2011

Back in December I wanted to send my sister money for my nephews and I thought a wire transfer would be the safest and easiest way. I checked with my bank (here in the EU) and found out that it would cost me €10, which I thought seemed fairly reasonable, and that it would take 5-6 business days, so I calculated what amount I needed to send to end up having $200 go to her account and dispatched the transfer order. On my end everything went dandy, the money left my account, I was debited €10 for the transaction, and I went on my merry way.
Twelve days later, the money showed up in my sister's account - all $140 of it. My bank washed their hands of it - they transferred the money per my order with all the fancy SWIFT and IBAN codes and whatnot - so my sister set about finding out from her bank where the rest of the money was. Turns out her bank has some nice fine print in their terms and conditions and any routing of the money done between banks (that is, if not straight between just the 2 banks) is charged, at each bank, an unspecified amount (no range or limit stated in the terms and conditions). Essentially, her bank has a parent bank so that parent charged $30 and the parent bank does not apparently work with my bank - part of the Raiffeisen group, so quite large - and they used their bank in Europe where a further $30 was "deducted" from the sum. In all, next time I'll put cash in the mail. It's cheaper and if it gets lost, at least it won't end up improving the bottom line of some megaworlddomination conglomerate.
Sorry for the rant, but really do your homework to see if it's worth having your money a few days quicker.
That is to say, at least as far as the Canadian clients would be concerned. I'm sure that bank to bank transfers within the US are reasonable.

[Edited at 2011-07-05 20:14 GMT]


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Kevin Fulton  Identity Verified
United States
Local time: 13:36
German to English
ACH Direct Deposit Jul 5, 2011

Some of my agency clients (US and EU) pay me via Automated Clearing House direct deposit.
See
http://en.wikipedia.org/wiki/Automated_Clearing_House

I don't know what the process is for the payer to set this up, but it seems an efficient means for a company with a lot of vendors to pay them. I don't understand why all my agency clients don't utilize this.



[Edited at 2011-07-06 03:52 GMT]

[Edited at 2011-07-06 03:52 GMT]


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The Misha
Local time: 13:36
Russian to English
+ ...
The problem with the US is Jul 5, 2011

that no one really does domestic wire transfers. I was thinking of the same thing a while back, and for similar reasons too, and the only thing I could think of so far is having my party deposit the check in person at a local branch of my bank. However, this is a bit of an imposition too, not to mention that there's hardly a bank that would have branches in all 50 states, or at least in most of them, so what might work with some payers definitely wouldn't with others. Oh, and by the way, the spread of online bill pay didn't make things better for us individual payees - it made them worse. Paper checks from some of my payers that live in the same city arrive the next day if dropped in the mail. It takes me up to a week to receive a paper check from their bank if they pay online.

In the end, I am still waiting for my checks in the mail ...


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John Fossey  Identity Verified
Canada
Local time: 13:36
Member (2008)
French to English
Canada Jul 6, 2011

I don't think direct deposit will work from Canada to the US since the Canadian system doesn't use the ABA routing code.

Within Canada, most major banks are members of Interac and funds can be send to a recipient through a link on the bank's site via Interac. The recipient gets an email from Interac with a link to their own bank. Costs are minimal ($1.50 or so) and the transfer is virtually instant.

Cross-border, though, is more difficult as the US and Canadian banking systems are completely different.

To answer the question of wire costs, a bank charges the sender about $30 to send a bank transfer. Receivers costs will be deducted from that.

There are some foreign exchange firms (Denarius Financial in Montreal is one) who offer wire transfer at much more reasonable costs. I seem to recall their fee was about $10 when I last used them about 5 years ago.

[Edited at 2011-07-06 01:48 GMT]


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Robert Forstag  Identity Verified
United States
Local time: 13:36
Member (2003)
Spanish to English
+ ...
TOPIC STARTER
Thank you! Jul 6, 2011

Thanks to all of you who responded. It looks like bank transfer and direct deposit are the most viable options within the US.

For Canada, bank transfer (at a higher rate than in the US) would seem to be the best option (though not a particularly attractive option) or PayPal for jobs less than $700 or so.

As Phil points out, hardly anyone uses checks in Europe any more, so it surprises me that checks are still so widely used in the US.

Thanks once again!

[Edited at 2011-07-06 16:07 GMT]


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Glenda Janssen  Identity Verified
Local time: 12:36
English to Italian
+ ...
Why are checks used in the US? Jul 9, 2011

Robert, it is no surprise to me that checks are still so widely used in the US...

In Italy, cashing or depositing a check from a bank different than your own was (in the eighties and nineties, I don't know about now) an adventure--often fraught with amazing costs. This probably has to do with the fact that check fraud was more common there.

In Holland, they moved to an interbank wire transfer method which was incredibly efficient somewhere in the eighties, if not earlier.

In the US, wires are still a bit iffy. As some commenter said, some banks charge for incoming international wires. I forgot about this. One of the banks I was with did this very thing, but didn't charge the fee if I had a business checking account. I have a feeling that they charge for incoming international wires because some foreign banks are a gigantic pain in the neck to deal with.

However, in the past few years, I have seen wires improve. Now Chase, Wachovia (and by extension Wells Fargo, I assume), and BofA offer wire transfers at very low fees. They all charge nothing to transfer between the same banks.

Definitely do check if your bank charges you for receiving a wire, though.


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Glenda Janssen  Identity Verified
Local time: 12:36
English to Italian
+ ...
PayPal? Jul 9, 2011

Hello again, Robert!

I have a quick question for you: why does PayPal only work for small amounts? I'm sure I could dig around the PayPal site for the answer, but I figure you would have the answer at the top of your head.

Thanks!


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