When it comes to accepting payments from overseas, I’ve learned the hard way that there is no single answer as to what works best. It all depends on a range of factors, such as:
- the country in which you live
- the country or countries in which you hold bank accounts
- the facilities available to you either through your bank(s) or in the country in which you live
- the country in which your clients are based
- the currencies in which you will (hopefully) be paid
- the amount and frequency of payments
- applicable fees, exchange rates and transfer times
I was reminded of this when listening to Episode 5 of the podcast Speaking of Translation. Presenters Corinne McKay and Eve Bodeux cover many interesting points on receiving payments, particularly for freelancers working across borders.
In my case, I have clients from all over Europe as well as here in Australia. I’ll quote and accept payments in one of three currencies – euro, sterling or Australian dollar – with payments made into one of my respective bank accounts in either Ireland, the UK or Australia. (I also need a good tax accountant to help keep things straight!) These are nothing fancy – just regular current (US: checking!) accounts, with full internet and telephone banking facilities and the lowest general account fees I could find.
My “deposit mix” changes all the time. However, in the interest of giving you some background, at the moment the largest percentage of my income comes from a couple of regular payments in sterling, followed by occasional healthy payments in euro and finally, many relatively smaller sums in Australian dollars.
As for playing the exchange-rate game, I’m pretty careful when it comes to quoting. I also have the luxury of a little leeway when it comes to transferring money between accounts. I’m sure I could be much smarter about it if I really tried, but ultimately cash flow is king. Some days I win and some days I lose, but I like to think it all evens out in the end.
In terms of payment methods, sterling and euro payments are all made by direct bank transfers (this seems to be called ACH in the US), which has never been an issue for my clients as it is quick, easy and free. Dollar payments tend to be a mix of cheque and direct bank transfers. Surprisingly I don’t get asked to accept PayPal payments so often anymore, possibly due to my shift towards more Australian-based individual as opposed to business clients.
However here’s what I had to say about PayPal almost 2 years ago, when Michelle Goodman asked me for my thoughts on payment methods, among other things, when she interviewed me while researching her book My So-Called Freelance Life. It echoes Corinne and Eve’s discussion, so I thought it would be worth digging up and posting here:
… PayPal is certainly a convenient way to have clients pay you (and some clients even specifically ask if can they pay this way), but you pay handsomely for the honour. The initial payment fees are high, the fees to then transfer it into your bank account are high – and when it comes to changing between currencies, it gets even more expensive. Worst of all, it’s not very transparent, so until you actually see the final balance in your account, it’s very hard to figure out just how much of your income you’re about to lose in fees (it depends among other things on what kind of card your client uses to pay you, for example…)
Personally, I don’t think it’s worth it, except as a once-off, last resort measure. Of course, if clients are happy to pay me a slightly higher rate to cover these fees, then I’m happy to receive payment that way. But funnily enough they rarely are, and if I included these fees in my rate upfront then I wouldn’t appear competitive, so I’d lose out there too. All in all, PayPal has far too many cons for me.
I tend to use a complicated mix of several bank accounts in different currencies, and keeping an eye on exchange rates to change money over when things are in my favour. It can negatively affect my cash flow and creates bookkeeping headaches at times, but I see it as part of the cost of overseas clients and at the end of the day, it’s more than worth it financially.
Ultimately, if you’re going to deal with overseas clients, then it’s absolutely essential that you work out the hidden costs behind getting paid before you take them on…
If clients were to request online payments in the future, I’d certainly look into some of the other options out there. For now though I’m happy with my current set-up, arrived at after much trial and error. I’m sure there must be as many variations on this as their are translators though, feel free to share yours in the comments.
Finally, I’d highly recommend subscribing to Speaking of Translation, if you haven’t already. (Eve and Corinne are looking for suggestions of themes for future episodes too, so head over to their blog and leave a comment to let them know what you’d like to hear covered). Details on how to subscribe here, or to subscribe from within iTunes, go to ADVANCED, SUBSCRIBE TO PODCAST and then enter the audio feed’s URL: smcpodcasting.libsyn.com/rss.