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An unnecessary fee of the correspondent bank
Thread poster: ptansri

ptansri  Identity Verified
Thailand
Local time: 15:21
Member (2015)
English to Thai
+ ...
Dec 26, 2014

Hi, Colleagues.


I just would like to share a bad experience.


I have recently got a translation job from a Russian agency who has many offices in Europe.
They look professional and have a good payment system. However, the payment period is about 45 days and they will just pay at the end of the month.


I have no choice but need to wait for the payment to be transferred to my bank account. Then, I have received my payment at the beginning of this month but it turned out that I lost around 49 USD.
I know that there is a bank fee around 11 USD. But where have 49 USD gone?

I have checked with them and they said it's the fee of my correspondent bank. Then I asked them to provide a pay slip which shows the name of this correspondent bank. I have checked with my bank and got informed that this is the correspondent bank of the sender's bank. So this agency did not tell me about the correspondent bank.


I have had no problem with wire transfer from USA or Germany before. I just wondered why they did not inform me until I found it out after losing the unnecessary fee of 49 USD. The bank of this agency is located in Greece. But the correspondent bank is in USA. I decided to not work with them any more because I lost my trust in them.


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Thayenga  Identity Verified
Germany
Local time: 10:21
Member (2009)
English to German
+ ...
Hidden fees Dec 26, 2014

This is indeed a negative "surprise". IMO your client should have at least informed you of these hidden fees, if only out of courteousy. But then you might not have accepted the job.

Did your PO include anything regarding the fees? Usually these should be split between the parties, each bearing its own fees, e. g. you should be paying only those fees that your bank is charging, and not those at your client's end.

Payment terms of 45 days and at the end of the month only can easily turn into a 70 - 74 days' free loan for which your or your client's financial institution would charge anywhere between 13 - 20% interest.

Since you have apparently agreed to your client's payment terms (You should be the one to set the terms for your services and then come to an agreement with your client/s.) there is not much you can do about it. However, again IMO, your trust in this client seems to be damaged, so that it's best for you to move on.


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ptansri  Identity Verified
Thailand
Local time: 15:21
Member (2015)
English to Thai
+ ...
TOPIC STARTER
No such a fee mentioned Dec 26, 2014

In the agreement, it says "Bank charges are fully covered by Payee.". As far as I know, I just have to pay for the bank fee around 11 USD. They never mentioned that they will have the payment transferred via a correspondent bank so they have never ever informed me about that high charge I was forced to pay.


They can't even explain why there is a correspondent bank and said like it's my own fault to ask to pay by wire transfer. They saidd this kind of problem hasn't happened to any of the translators they work with before.

I don't know if this is true. I don't want to waste my time arguing with them anymore. For myself, I have learned a lesson. Hope it's the first case and the last one for me.


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Vadim Kadyrov  Identity Verified
Ukraine
Local time: 11:21
Member (2011)
English to Russian
+ ...
The thing is that Dec 26, 2014

you can never be sure 100% about the fee when it comes to SWIFT transfers. That is not the fault of your outsourcer. They just don't know the way the money will be transferred. This is the huge drawback of the system.

They can honestly pay the transfer fee in full, and still, the bank can send the money through 1 or (rarely) two banks, which will bite off their penny along the way.





[Edited at 2014-12-26 10:23 GMT]


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ptansri  Identity Verified
Thailand
Local time: 15:21
Member (2015)
English to Thai
+ ...
TOPIC STARTER
What is the best way of receiving payment? Dec 26, 2014

How do you guys normally receive the payment? What would be the best way to get paid with less fee?

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Sheila Wilson  Identity Verified
Spain
Local time: 09:21
Member (2007)
English
+ ...
This is not your client's fault Dec 26, 2014

Vadim Kadyrov wrote:
you can never be sure 100% about the fee when it comes to SWIFT transfers. That is not the fault of your outsourcer. They just don't know the way the money will be transferred. This is the huge drawback of the system.

They can honestly pay the transfer fee in full, and still, the bank can send the money through 1 or (rarely) two banks, which will bite their penny along the way.

It depends entirely on whether the two banks have an arrangement to transfer funds directly or whether they use an intermediary. It is indeed highly frustrating.

The only options you have are to ask your client to use a different bank (which may well be possible) or to set up an account yourself with a second bank. That may solve the problem with this client.

Failing that, PayPal and Skrill are quite common means of payment. They're anything but free, though.


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Philippe Etienne  Identity Verified
Spain
Local time: 10:21
Member
English to French
Of microjobs delivered at the other end of the world Dec 26, 2014

Bank fees are something very difficult to know in advance between main "regions" (Americas/EU, EU/Asia, etc.). I've always been amazed at how much money intermediary/correspondent banks can make by just shoving money from one bank to another.

Even though customers usually pay their bank fees at their side, you're bound to have your own bank fees and any intermediary bank fees deducted from your invoice amount.
From experience, I can expect a ghost fee of about $50 on transfers from the US to the EU or Africa, and about 4% of the amount for Paypal.

From there, when dealing wioth a first-time customer:
- Charge more when you know bank fees will be high, i.e. when the customer is in another "banking region" than yours
- Do not take on microjobs from the other side of the Earth when half of your fee will be withdrawn during its journey to your account.

Paypal is ok for payments up to $1,000-1,500. Receiving $1000 costs you a hefty $40, but it's for a good cause: prevent shareholders from starving.
Beyond $1,500, wire transfers are the best bet, you will usually pay around $50-70 in bank fees (


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Vadim Kadyrov  Identity Verified
Ukraine
Local time: 11:21
Member (2011)
English to Russian
+ ...
Some thoughts Dec 26, 2014

ptansri wrote:

How do you guys normally receive the payment? What would be the best way to get paid with less fee?


I believe bank transfers is the best option. Skrill and PayPal are OK as well, but you should remember that they are a kind of an intermediary between you and your bank account. So, you end up receiving the very same SWIFT/bank transfer (or Visa/Mastercard transfer, which is almost the same and does not work for a lot of countries).

And, e.g. Skrill expressly states that they can`t control the way the money will be sent, namely, how many banks will be involved (for example, every time I send the money from my Skrill account to my bank account through SWIFT, 4 euros mysteriously vanish somewhere along the way).





[Edited at 2014-12-26 10:42 GMT]


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Vadim Kadyrov  Identity Verified
Ukraine
Local time: 11:21
Member (2011)
English to Russian
+ ...
yes Dec 26, 2014

Philippe Etienne wrote:

From there, when dealing wioth a first-time customer:
- Charge more when you know bank fees will be high, i.e. when the customer is in another "banking region" than yours
- Do not take on microjobs from the other side of the Earth when half of your fee will be withdrawn during its journey to your account.

Philippe


Yes.


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Samuel Murray  Identity Verified
Netherlands
Local time: 10:21
Member (2006)
English to Afrikaans
+ ...
Correspondent costs are not always predictable Dec 26, 2014

ptansri wrote:
I just wondered why they did not inform me until I found it out after losing the unnecessary fee of 49 USD. The bank of this agency is located in Greece. But the correspondent bank is in USA. I decided to not work with them any more because I lost my trust in them.


I agree with what was said by others here: don't judge the client on their bank's choice of correspondent bank, because the client often does not have a say in the matter. Correspondent costs are a part of international money transfers. Sometimes you are lucky, and pay nothing or very little, and sometimes you are unlucky.


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ptansri  Identity Verified
Thailand
Local time: 15:21
Member (2015)
English to Thai
+ ...
TOPIC STARTER
Need to pick a job Dec 27, 2014

Thanks for all comments. I will not accept any microjob anymore when you will get nothing after the fee. I had better work with an agency who can share or cover this kind of fee than the one who just shove the fee to the freelancer. They should make a fair business.

By the way, that agency advised me to change the correspondent bank which I have nothing to do with. That's ridiculous.


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inesec  Identity Verified
Latvia
Member (2014)
German to English
+ ...
Keeping in mind the current state of affairs, Dec 27, 2014

I would advice you to refrain from any business with Russian agencies. Of course, it's just my opinion based on a long experience.

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Katalin Horváth McClure  Identity Verified
United States
Local time: 04:21
Member (2002)
English to Hungarian
+ ...
See previous discussion about intermediary banks and their fees Dec 28, 2014

http://www.proz.com/forum/money_matters/181460-bank_fees.html#1592617

http://www.proz.com/forum/money_matters/187609-translator_charging_extra_20_eur_to_his_invoice_as_a_bank_fee.html#1645552


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Gabriele Demuth  Identity Verified
United Kingdom
Local time: 09:21
Member (2014)
English to German
Are you barking up the wrong tree? Dec 28, 2014

Vadim Kadyrov wrote:

you can never be sure 100% about the fee when it comes to SWIFT transfers. That is not the fault of your outsourcer. They just don't know the way the money will be transferred. This is the huge drawback of the system.

They can honestly pay the transfer fee in full, and still, the bank can send the money through 1 or (rarely) two banks, which will bite off their penny along the way.





[Edited at 2014-12-26 10:23 GMT]



So is it the bank you should be complaining to? This sounds as if we were at their mercy, had to pay whatever they chose to charge and if they chose to invite other banks to the party then we pay for that as well.


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ptansri  Identity Verified
Thailand
Local time: 15:21
Member (2015)
English to Thai
+ ...
TOPIC STARTER
Small payment but fee almost half of it. Dec 28, 2014

I also wonder why the bank deducted almost half of the payment as fee.

I should get paid around 1xx.00 before the fee. So after the bank fee, the left amount is not even worth my effort doing that job. They obviously ripped me off.

If the amount is up to 1,000 USD or more, the fee may be acceptable.


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An unnecessary fee of the correspondent bank

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