Who pays the bank charges? The sender of the money!
Thread poster: TTilch

TTilch  Identity Verified
Local time: 09:40
English to German
+ ...
Oct 5, 2015

Hello,

When dealing with agencies you will have come across terms like "If a collaborator chooses payment by wire then he/she has to pay the fees which the bank is charging us."

Well, have you ever tried to order a product from another company and then told them that you expect them to pay for your bank charges? If you tried, you will have been told: "Then we won't deliver, we expect full payment of the article's price." And this is the only correct answer.

It is not the recipient's problem that the bank of the buyer charges the buyer any/high bank charges. Also, the recipient cannot influence how many intermediate banks the buyer's bank may require to make the wire transfer to your account. It is up to the buyer himself to choose a bank that asks low fees.

You should always insist on the buyer to pay with the so-called "OUR" payment option, which means that the full invoice amount is credited to your account - without any deduction of any bank charges.

Best regards,

Tanja


 

Yasutomo Kanazawa  Identity Verified
Local time: 16:40
Yes, exactly! Oct 5, 2015

But the sad thing is that the industry is full of amateurs who do not know the basics of buying/selling a product.icon_frown.gif

 

TTilch  Identity Verified
Local time: 09:40
English to German
+ ...
TOPIC STARTER
True... Oct 5, 2015

Yes, that's true, but that's why I took up this topic.

Don't let anyone talk you into accepting to pay their bank charges!

It helps to use some common sense. E.g. when you order something from Amazon, Apple, Microsoft, etc., did they ever offer to pay your bank charges for you? No!
And if you were to deduct this amount from the invoice amount, they simply would not deliver until the full amount has been credited to their account.


[Bearbeitet am 2015-10-05 10:42 GMT]


 

jyuan_us  Identity Verified
United States
Local time: 03:40
Member (2005)
English to Chinese
+ ...
You can choose to increase your price to compensate for the bank charge Oct 5, 2015

TTilch wrote:

Yes, that's true, but that's why I took up this topic.

Don't let anyone talk you into accepting to pay their bank charges!

It helps to use some common sense. E.g. when you order something from Amazon, Apple, Microsoft, etc., did they ever offer to pay your bank charges for you? No!
And if you were to deduct this amount from the invoice amount, they simply would not deliver until the full amount has been credited to their account.


[Bearbeitet am 2015-10-05 10:42 GMT]


 

José Henrique Lamensdorf  Identity Verified
Brazil
Local time: 04:40
English to Portuguese
+ ...
It is a corollary of the desperate translators' plight Oct 5, 2015

Every day we see threads here and elsewhere on low translation rates. They are the outcome of - according to Pareto's Law - 80% of the translators accepting lower rates as their only solution to avoid joblessness.

Okay, some reputable translation clients cannot relinquish quality, so they have to pay decent rates. In order to spare themselves from the 'defeat' of having to pay competent translators what their work is actually worth, they charge all bank expenses to their vendors.

This procedure is as unique - and just as bizarre - to the desperados-fraught translation marketplace, as the habit bottom-feeders have to impose their rates. Yet now we are talking about the privileges of the high-end customers, those who select their vendors carefully, and pay whatever they cost.

On top of unique, charging payment fees is blatantly UNFAIR!

PayPal charges nothing to the payer, however it will deduct a variable percentage of the gross amount from the payee's net receivables. I know it's cheaper elsewhere, but in Brazil it represents about 10% of the total. On top of speed and practicality, that's why so many translation clients LOVE PayPal. If any vendor complains about these fees, they can divert the blame to PayPal and still look good!

Wire transfers is where unfairness thrives. A vendor cannot impose a specific bank upon a client to do their banking. I've seen clients in the very same USA deducting from US$10 to US$60 per wire remittance. A translator is not empowered to suggest they move to a $10-bank. Why should they, if they are not the ones paying for the extra cost?

There are often fees on the receiver's side too. Itau (largest BR private bank) charges me a BRL 60 fee to receive each wire transfer. I've heard of local colleagues who were charged BRL 200+ by HSBC for the same service. To illustrate my point, if the client were expected to cover this fee, they wouldn't have the clout to suggest a translator in Brazil to move, say, from HSBC to Itau.

So the fairness would reside on each party paying the cost of their own choice. Yet the desperado translators keep the game unbalanced. As quality-demanding clients are having to pay fair rates, they cling to their privilege of forcing translators to pay all bank fees.

A few years ago I decided to set apart translation and financial costs. My rates include both the payment method and term. Differently from many colleagues who feel insulted at requests for 'best rate', I don't. My best rate is is for COD payment, significantly lower than other financially-burdened options I have. My translation rate in itself doesn't change.


 

Soonthon LUPKITARO(Ph.D.)  Identity Verified
Thailand
Local time: 14:40
Member (2004)
English to Thai
+ ...
You can choose to increase your price to compensate for the bank charge Oct 5, 2015

I support jyuan_us's word above.
To avoid dispute on paying for fees, I add extra price to all of my quotes.

Soonthon L.


 

Samuel Murray  Identity Verified
Netherlands
Local time: 09:40
Member (2006)
English to Afrikaans
+ ...
Some points Oct 5, 2015

TTilch wrote:
When dealing with agencies you will have come across terms like "If a collaborator chooses payment by wire then he/she has to pay the fees which the bank is charging us."


1. Note that for a USA client the word "wire" may mean something different than for a translator from outside the USA. It may refer to a type of speedy payment that is different from normal country-to-country bank transfers. Ask the client if they also do non-"wire" international bank transfers.

2. Who pays what charge is always a matter of negotiation. For example, some remote delivery stores (for product sales) offer "free delivery" whereas others charge a fee for postage and packaging. So it's all up to what you and the client agree to.



[Edited at 2015-10-05 11:24 GMT]

[Edited at 2015-10-05 11:24 GMT]


 

xxxDorothyX
France
Local time: 09:40
Wire Oct 5, 2015

Samuel Murray wrote:

TTilch wrote:
When dealing with agencies you will have come across terms like "If a collaborator chooses payment by wire then he/she has to pay the fees which the bank is charging us."


1. Note that for a USA client the word "wire" may mean something different than for a translator from outside the USA. It may refer to a type of speedy payment that is different from normal country-to-country bank transfers. Ask the client if they also do non-"wire" international bank transfers.



Agree. It may mean speedy payment, immediate payment, etc.

Ask your client if they do direct bank-to-bank transfers.
But even these, which are common and without charges in Europe, may be very costly in the US.
It may even mean that your client has to go in person to his local bank office.
If you ask for that, you ask for something that is outside their common procedures.
And of course, then you should set higher prices.


 

Niina Lahokoski  Identity Verified
Finland
Local time: 10:40
Member (2008)
English to Finnish
+ ...
Agree Oct 5, 2015

I don't think online shops are really comparable with our business. We should compare ourselves with other independent professionals, such as lawyers or graphic designers. I don't think any lawyer would allow their client to dictate the payment method, let alone get away with paying anything less than the exact invoiced amount. And even in the case of online shops, it's the shop that decides to give shipping for free, not the client demanding it.

I'm currently struggling with this issue myself - somehow 12 EUR disappear from every payment I receive from a certain client that was recently merged with another company. This client is in a country that uses another currency, but I invoice and they pay in EUR. I know my bank doesn't charge me anything, so it must be the sender's bank. Also, even though the client claims to pay in EUR, I can see in my bank statement the original amount in the foreign currency, as well as the foreign bank's exchange rate. So, I asked the client about this, and they sent their bank statement, on which only the Euro amount is mentioned, and told me to contact my bank. I did, and surprise, my bank advised me to ask the client to contact theirs, as they cant see what has happened in the foreign bank. Argh.

This is not someting we have negotiated or agreed on, in fact after the first time this happened, I specifically asked the client to make sure nothing would be deducted from the payment in the future. Didn't change anything.

[Edited at 2015-10-05 12:52 GMT]


 

TTilch  Identity Verified
Local time: 09:40
English to German
+ ...
TOPIC STARTER
Thank you for your thoughts on this Oct 5, 2015

@ jyuan_us and Soonthon:

It will be difficult to add this to your pricing if you do not know beforehand how much other people's banks will charge for this and not knowing how many intermediary banks are involved. See Josés comment - charges range from nothing up to $60 etc.

@ Samuel:

Ok, granted, "EFT" (electronic funds transfer) may be a better term than "wire transfer".

@ Niina:

I totally agree with you.

It is probably an intermediate bank that charges a fee - the sender's bank may be too small to do it direct. In Europe we differentiate between the options "BEN", "SHA" and "OUR" for international bank transfers. BEN means the beneficiary pays all charges, SHA means shared (each party pays its own bank's charges), this is the standard option, and OUR which means the sender pays all charges. You may need to be more specific in your instructions on your invoice.icon_smile.gif


 

José Henrique Lamensdorf  Identity Verified
Brazil
Local time: 04:40
English to Portuguese
+ ...
Clarification Oct 5, 2015

TTilch wrote:

@ jyuan_us and Soonthon:

It will be difficult to add this to your pricing if you do not know beforehand how much other people's banks will charge for this and not knowing how many intermediary banks are involved. See Josés comment - charges range from nothing up to $60 etc.


There are TWO (or THREE) bank charges involved.

1. The sending charge, what your client pays to the bank of THEIR choice (here lies the unfairness) for sending a wire transfer. Most translation agencies try to dump this liability on their vendors. Many state their charge - which often includes an allowance for their accounts payable incumbent's time and effort - as a fixed amount.

2. The receiving charge, which your bank of YOUR choice charges you.

3. It never happened to me, but I've read accounts of colleagues of nondescript and countless intermediary banks having taken chunks from the lump sum sent, as it went through them.

An important point is that all these charges are fixed, per transaction, while PayPal's fees are a percentage of the total sum involved, without any cap.

Let's do some calculations...

Assumed variables are:
- Agency deducts $20 for sending the wire
- Receiving bank charges $20 for receiving the wire
- PayPal deducts 10% on the total

If the cost of getting paid via wire is $40, that's what PayPal would deduct on a $400 payment. Therefore PayPal is a better option for any payment under $400, while for a higher amount will justify the wire transfer costs.

Every translator working across borders should know the variables to do this math.


Another payment option, a bit shady, is P2P systems like Western Union or Moneygram.

Accounting-wise, as they are P2P only - it technically involves some employee at the client receiving in cash on behalf of the translator, and them personally sending that money. This usually costs US$ 5 per transaction, but depending on the location, it may involve that person taking cash somewhere outside the office.


 

Erik Freitag  Identity Verified
Germany
Local time: 09:40
Member (2006)
Dutch to German
+ ...
Intermediary bank charges Oct 5, 2015

José Henrique Lamensdorf wrote:

Every translator working across borders should know the variables to do this math.



The problem is: Up to now, I haven't found a way to determine whether intermediary banks will be involved for a given transaction, and how much they're going to charge, before the payment is actually processed. Also, as far as I understand the process, there can be intermediary banks on both ends of the transaction. The usual reply to enquiries about charges is that my bank as well as the debtor's both say "we didn't withhold any charges", yet some money got lost underway, for which I pay, not the debtor. The only way to solve this indeed seems to be to chose the "OUR" option.


 

Annamaria Amik  Identity Verified
Local time: 10:40
Romanian to English
+ ...
OUR doesn't always solve the problem Oct 5, 2015

Erik Freitag wrote:

The only way to solve this indeed seems to be to chose the "OUR" option.


An Indian client did choose the OUR option, yet by the time the money got here, somebody changed it to SHA and all the intermediary bank fees were charged to my account... Other colleagues reported the same problem, see this thread: http://www.proz.com/forum/money_matters/286477-bank_claims_charges_were_sha_client_proves_our.html


 

Thayenga  Identity Verified
Germany
Local time: 09:40
Member (2009)
English to German
+ ...
Bank and PayPal fees Oct 5, 2015

These fees usually are laid upon the translator to pay. I have only two clients who actually pays the entire amount that they owe me, and it is through PayPal.

Although it might be a little early, my New Year's resolution will be that I shall receive the money in my account that has been stipulated in my invoices. This can be accomplished only in two ways: raise my rates or find new clients. After all, as a business woman I need to generate income and not lose money by accepting less than the agreed upon amount in my account due to fees.icon_smile.gif


 

Patrick Porter
United States
Local time: 03:40
Spanish to English
+ ...
shared Oct 6, 2015

TTilch wrote:

...SHA means shared (each party pays its own bank's charges)...


This is how I handle it with all my clients. The client pays its own fees to initiate the transfer, whatever that may be. Any intermediate charges and fees by my bank are borne by me. My bank's basic fees are a flat rate (they don't vary according to the amount), and although not always the same, generally fall into the range of $12-$18. My account is denominated in USD, and whenever I get a transfer from another account denominated in USD, even from abroad, there don't seem to be any intermediary charges. Some of my foreign clients have USD accounts and can pay me this way, so I always request this up-front if they have the capability.

When I get a transfer in another currency, there does seem to be a "haircut" applied to the exchange rate, compared with the quoted market rate for the currency pair at the time. It isn't clear how much of this relates to any intermediary fees and how much corresponds to the haircut by my bank. Although the records my bank sends show a tracing of the different banks involved, it doesn't indicate specific fees paid to intermediaries and/or the exchange rate. I would prefer more transparency, but it has been difficult for me to find an account that would allow this. It would also be nice to be able to open accounts in different currencies to lower the fees and decide for myself when to exchange into dollars, if at all, but that is also hard to find in the US for an individual (without large fees just to maintain the account). PayPal offers something like this, but its fees are a percentage, which can be fairly high, and on top of that it also applies a "haircut" to the exchange rate. So the transparency there isn't worth the higher fees. For these reasons I try to avoid taking PayPal unless it is for smaller, isolated jobs from occasional clients.

In any event the haricut/fees on foreign-currency transfers to my present bank account seem to be somewhat predicable, i.e., a certain range of percentage points below the market rate. I generally keep an eye on the applicable exchange rates and will sometimes adjust my fees for new projects/clients partly based on these factors. This doesn't remove all currency exchange risk or offset the fees, but it helps keep the costs relatively predictable. And as some other posters have said, if it is predictable it can be accounted for in whatever fees are negotiated.


 


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