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Best way to receive payment from US agency?
Thread poster: Sarah Silva

Sarah Silva  Identity Verified
United Kingdom
Local time: 14:10
Member (2008)
German to English
+ ...
Aug 16, 2012

Hi there,

I am UK-based and a well-respected US agency has contacted me to ask for help with upcoming projects. I've just been sent their payment policy which states they will charge USD 33 per wire transfer which will be deducted from the invoice.

Other payment options are "check" or Paypal. I don't currently use Paypal but have seen they will charge a currency conversion fee and possibly other charges such as a cross-border fee - does anyone use this as a method of payment from other countries and can enlighten me on the fees?

Waiting for a cheque to arrive from the US doesn't seem sensible so the options are transfer or Paypal.

Can anyone tell me what option they use in this situation and how they would approach the transfer fee? I have already agreed a rate per word for translation but wonder if I should renegotiate to compensate for the bank fees...

Many thanks for your adviceicon_smile.gif


 

Tom in London
United Kingdom
Local time: 14:10
Member (2008)
Italian to English
Say no Aug 16, 2012

Sarah Silva wrote:

Many thanks for your adviceicon_smile.gif


My advice would be not to work for these people. Why should they charge you USD 33 per wire transfer? Did they say why? Do they really mean $33.00? Seems like an awful lot. Why should they charge anything at all?

And then they say they will also deduct a currency conversion fee and possibly other charges such as a cross-border fee? What on earth is a "cross-border fee"? See here for a brief discussion: http://www.wetcanvas.com/forums/showthread.php?t=280941

And I assume their "currency conversion fee" would be on top of the currency conversion itself - whereas they could just pay USD into your bank and let your bank look after the currency conversion, including any fee that might be applicable.

I'm aghast! I would walk away from this "well-respected" agency and never look back.

[Edited at 2012-08-16 11:55 GMT]


 

Sarah Silva  Identity Verified
United Kingdom
Local time: 14:10
Member (2008)
German to English
+ ...
TOPIC STARTER
Additional fees related to paypal Aug 16, 2012

Hi Tom,

I think I was unclear - the currency conversion and cross-border payment fees are just related to Paypal. This is what I uncovered during initial research and was hoping someone who uses this service might enlighten me as I don't understand why a cross-border payment fee would apply in addition to currency conversion fee!


 

ATIL KAYHAN  Identity Verified
Turkey
Local time: 16:10
Member (2007)
Turkish to English
+ ...
High Fees Aug 16, 2012

I agree with Tom in that $33.00 per wire transfer is an extremely high fee. Can it perhaps be only $3.30 per wire transfer? That is more reasonable. Whatever the amount, I suggest that you ask to be reimbursed for any fees like that. Negotiating beforehand for any fees is definitely a good idea.

 

José Henrique Lamensdorf  Identity Verified
Brazil
Local time: 10:10
English to Portuguese
+ ...
Xoom Aug 16, 2012

If they agree to have some individual there (your assigned PM?) to receive payments in cash on your behalf and then send the funds to you (Xoom is P2P only), it will cost only USD 4.99 from their US bank account to yours in the UK. Into Brazil it works at most within 24 hours on business days. The link is http://www.xoom.com . It only serves from the USA to some 30 countries.

PayPal is expensive. While they charge nothing to the sender, their fees may be hefty to the receiver. You'd have to check your UK account's rates, however in Brazil they deduct about 6.5% in fees + 3.5% in lower exchange rates = 10% overall. Were that not enough, they delay the actual payment by 3-10 business days.

The cost and hassle in sending a wire transfer from the USA varies a lot. One client in California did it online apparently at no cost, via Bank of America. Another one in Massachusetts had to set an appointment with a local bank, go there personally, and wait for 45 minutes to get it done for a USD 30-ish fee.

[Edited at 2012-08-16 12:06 GMT]


 

Anna Bednarska, MA MCIL  Identity Verified
United Kingdom
Local time: 14:10
Member (2012)
English to Polish
+ ...
I'd choose Paypal method Aug 16, 2012

Hello Sarah,
I am also UK-based and I've already been paid by US customers.
The method I am using is Paypal and I've just checked my payment history for more detailed information on fees. According to this, I am charged with the standard cross-border rate of 3.4% + GBP 0.20 per each trasaction, which is IMO not that bad and - in case of smaller projects - undoubtedly more profitable than being charged with over USD 30 for each assignment. However, if you expect to receive larger payments from this outsourcer (or e.g. to be paid monthly), then wire transfer would be a better option.

Hope that helps, good luck!
Anna


 

LEXpert  Identity Verified
United States
Local time: 08:10
Member (2008)
Croatian to English
+ ...
PayPal fees explained Aug 16, 2012

Sarah Silva wrote:
I think I was unclear - the currency conversion and cross-border payment fees are just related to Paypal. This is what I uncovered during initial research and was hoping someone who uses this service might enlighten me as I don't understand why a cross-border payment fee would apply in addition to currency conversion fee!


Sarah,
PayPal charges a cross-border fee whenever you receive money from outside of your home country. The currency conversion fee does not apply until you actually convert the money. For example, you are in the UK, a US agency sends you USD via PayPal. At this point, the cross-border fee is deducted. If you have set up your account to have a USD balance in addition to Euros or GBP (or whatever other currencies), then those USD will sit in your PayPal account as USD until you do something with them, such as withdraw to your bank, or buy something through PayPal. Generally, to withdraw them to your bank account, you will have to first convert them in PayPal to GBP or whatever the main currency of your bank account is. That's where PayPal charges the conversion fee. If you don't have a USD balance set up in PayPal, and receive USD, I believe (not 100% sure) that PP will ask you if you want set one up or convert the money to your preferred currency.

Of course, if you can get the agency to send the PayPal funds in your preferred currency right off the bat, then you can at least obviate the conversion fee, but not the cross-border fee.


 

Sheila Wilson  Identity Verified
Spain
Local time: 14:10
Member (2007)
English
+ ...
Whose fees? Aug 16, 2012

Do they perhaps mean they would deduct $33 from the amount owing, but then transfer the balance free of all charges at your end?

I'm not sure what's possible between the USA and the UK, but when I transfer money from my UK bank to my French or Spanish one, they offer various possibilities e.g. payee to pay all charges, payer to pay all charges (i.e. from the UK account), or for each to pay their own charges. Of course, when it's from me to me then it's only total amount that's important.icon_smile.gif

In actual fact, there are often 3 organisations eager to get their hands on some money: the issuing bank has charges; the receiving bank has charges; one or more intermediary banks may have charges. These last ones are the worst as nobody seems to know if/when they will be incurred, or how much they will be. They occur when the issuing and receiving banks do not have a formalised agreement in place. In my case, transfers from NW in the UK to Sabadell in Spain go direct, whereas NW UK to Groupama in France goes via Société Générale, who want their cut, too.

It might pay you to check with your bank how much they would charge to process a transfer from America. IF (and it's a big "IF") your potential client will pay ALL charges, 33$ off a large monthly payment could be interesting. Of course, I imagine you are increasing your rate a little to cover possible exchange rate losses, bank fees, etc.

BTW, I forgot to add that it can pay to keep a USD stream in your PayPal account, rather than converting dollars to your local currency. PayPal admit they give a lousy exchange rate! I often find there are things I want to buy that can be bought in USD, sometimes at a very good rate, so I use my USD stream for that.

[Edited at 2012-08-16 12:31 GMT]


 

Louisa Berry
United Kingdom
Local time: 14:10
Member (2009)
German to English
+ ...
Avoid cheques in other currencies Aug 16, 2012

I would also avoid the cheque option. They would send the cheques in dollars and I investigated this a while ago and my different banks would charge between £15 and £25 to cash a cheque in dollars.

Some US wire transfer fees are that steep as far as I recall. Also my bank (Barclays) charges me £6 to receive such transfers from the US.


 

Sonia Hill
United Kingdom
Local time: 14:10
Italian to English
Avoid Paypal Aug 16, 2012

José Henrique Lamensdorf wrote:

PayPal is expensive. While they charge nothing to the sender, their fees may be hefty to the receiver. You'd have to check your UK account's rates, however in Brazil they deduct about 6.5% in fees + 3.5% in lower exchange rates = 10% overall. Were that not enough, they delay the actual payment by 3-10 business days.


I have found Paypal fees to be similar in the UK and I never use Paypal to receive payments these days.

I suspect I know the US agency you're referring to (having worked for them in the past - enough said!) and I opted to receive a cheque. Perhaps surprisingly, this proved to be by far the cheapest option as the exchange rate was much more reasonable than the one offered by Paypal and I simply had to pay a one-off fee of £7 per cheque (this is with First Direct). I asked the agency to make sure they didn't send me cheques for less than a certain amount of money. The cheques always arrived promptly I have to say.


 

texjax DDS PhD  Identity Verified
Local time: 09:10
Member (2006)
English to Italian
+ ...
It is expensive Aug 16, 2012

Tom in London

My advice would be not to work for these people. Why should they charge you USD 33 per wire transfer? Did they say why? Do they really mean $33.00? Seems like an awful lot. Why should they charge anything at all?



Fees for international wire transfers from the US are expensive. Please take a look at the following link of BofA.


http://www.bankofamerica.com/deposits/checksave/index.cfm?template=lc_faq_wire


Regards





[Edited at 2012-08-16 13:07 GMT]


 

LEXpert  Identity Verified
United States
Local time: 08:10
Member (2008)
Croatian to English
+ ...
Wire transfers in the US *are* expensive Aug 16, 2012

Tom in London wrote:

My advice would be not to work for these people. Why should they charge you USD 33 per wire transfer? Did they say why? Do they really mean $33.00? Seems like an awful lot. Why should they charge anything at all?


Yes, it does cost that much. Wire transfers are relatively uncommon in the US (except for moving large amounts between banks or large commercial entities. They are also complex to execute, and often cannot even be done by on-line banking, instead requiring a personal trip to the bank to present identification. If you are sending the money to yourself - i.e., to an account also in your name - you might be able to get away with faxing a notarized instruction.
From that standpoint, it is understandable that an agencies would want to disincentive the use of wire transfers, or at least recoup their cost. Unfortunately, some deduct fees for wire transfers that are obviously far in excess of the actual cost - I've even seen agencies who say they deduct $75 if you want a wire transfer!


 

Tom in London
United Kingdom
Local time: 14:10
Member (2008)
Italian to English
My goodness Aug 16, 2012

How backward ! I thought the US tried hard to be more efficient than other countries. We live and learn !

 

Neil Coffey  Identity Verified
United Kingdom
Local time: 14:10
French to English
+ ...
US does seem to have some mental block... Aug 16, 2012

Tom in London wrote:
How backward ! I thought the US tried hard to be more efficient than other countries. We live and learn !


I've also found this: for some reason, US banking seems to be much more oriented around cheques (sorry, "checks") whereas they've been virtually phased out in many other countries such as the UK.

Just for the sake of being pragmatic, Paypal possibly isn't a terrible option. Yes, they're not a charity, but they're well recognized and you'll probably get (what's left of) your money quicker.


 

Nicole Schnell  Identity Verified
United States
Local time: 06:10
English to German
+ ...
Backwards? The problem are the European banks. Aug 16, 2012

Tom in London wrote:

How backward ! I thought the US tried hard to be more efficient than other countries. We live and learn !


In this age of electronic checks and whatnot I have absolutely no understanding why it takes banks in Europe several weeks to deposit a check. I call this backwards.

The US banking system is based on our strict money laundering laws and regulations. That's why only a bank teller is allowed to send international transfers, and the sender has to show up in person with photo ID.

In short: Don't blame the US system if your bank in Europe prefers to play with your money for a couple of weeks before they generously decide to put your money on your account.


 
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