Question concerning payment methods Thread poster: Yulia Bakhrekh
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Hello,
As I have graduated recently and I'm breaking into translation market, I would like to ask you whether it is common practise to be paid (by a new client) via Paypal account. If not, are there any risks that I should be aware of?
Thank you very much
| | | | Jenn Mercer 
United States
Local time: 08:23
Member (2009)
French to English
| quite common | Jan 22, 2012 |
Yes, being paid via PayPal is quite common and would not raise any red flags that I am aware of. The downside is that there are often fees attached, but these vary widely depending on the amount, whether you are exchanging currencies, and even how the customer made the payment.
| | | | | Who should pay the fees | Jan 22, 2012 |
Thank you for your answer. I would also like to ask if I should ask the client to pay the fees, that is to include them in the price for a translation.
Cheers
| | | | Sheila Wilson
Spain
Local time: 13:23
Member (2007)
English
+ ...
| One of various payment methods | Jan 22, 2012 |
Hello Yulia,
Welcome to ProZ.com. Here's my 2 cents' worth:
Jenn Mercer wrote:
Yes, being paid via PayPal is quite common and would not raise any red flags that I am aware of. The downside is that there are often fees attached
I believe there are ALWAYS fees attached to receiving payments for professional services. Still, Paypal is often a good way of accepting payment as long as you take those fees into account. Just for information (and this may not suit you personally) what I do is the following:
I insist on all EUR zone clients paying by bank transfer unless they can give me a good reason to do otherwise. You should check with your bank, but this is often free or very cheap. I do the same for GBP clients as I have a UK bank account which accepts free GBP credits.
For clients who prefer for one reason or another to pay in USD (or very occasionally some other currency if I choose to accept it), I am happy to accept payment via PayPal. I will generally add 3.5% to the quoted price, either by incorporating it in the rate per word or as an additional item of the invoice. If they become regular clients and are open to the idea, then I remove the extra fee but specify on the invoice that payment must be received within 10 days. If they pay between 11 and 30 days (my maximum), they must add a 3.5% surcharge to the invoice to cover my costs.
In this way, I aim to receive all of what I am owed within 30 days. If the client pays quickly then I am happy to forego 3.5% in return for the peace of mind of having the other 96.5% in the bank.
I don't know of any risks linked to PayPal unless you live in a country which PayPal regards as some sort of a risk or which isn't really covered fully by them. Although I hear they do have a habit of locking accounts from time to time. I keep two balances in my PayPal account, in EUR and USD, so that I can pay for things bought online just by pressing one button and without having to worry about that day's exchange rate. But I wouldn't keep thousands of Euros there, just in case.
Good luck with the first clients, Yulia.
Sheila
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Thanks for the answers, they are very helpful! I will follow your advice, as it seems very reasonable.
Cheers
| | | | | Agree with Sheila | Jan 23, 2012 |
I also have a new client who insists on paying smaller amounts via PayPal. As they are paying in another currency there will be fees involved (for both payment via PayPal and via wire transfer). So we agreed to add a certain percentage to the rate, and that it is.
Annett
| | | | Richard Foulkes (X)
United Kingdom
Local time: 13:23
German to English
+ ...
| Paypal - read up on chargebacks and disputes | Jan 23, 2012 |
I don't use Paypal for receiving translation payments, both because of the fees and peace of mind.
When a bank transfer clears in my bank, it's mine. When you receive money in Paypal, the purchaser has, I think, up to 45 days to raise a dispute and claim they didn't receive the goods / service or that the goods weren't received as advertised / promised. Paypal then investigates this and their decision is final. This would seem open to abuse by dishonest clients. How would you prove... See more I don't use Paypal for receiving translation payments, both because of the fees and peace of mind.
When a bank transfer clears in my bank, it's mine. When you receive money in Paypal, the purchaser has, I think, up to 45 days to raise a dispute and claim they didn't receive the goods / service or that the goods weren't received as advertised / promised. Paypal then investigates this and their decision is final. This would seem open to abuse by dishonest clients. How would you prove delivery (you'd have to keep 'read receipts' / replies / proof of postage for every job at the very least)? Does translation quality come into the 'not as advertised' equation?
If the client has paid by credit card, they have a much longer period (I think 120 or 180 days) to raise a similar claim with their credit card company. They, in turn, raise a claim with Paypal, known as a 'chargeback'. Paypal charge you the vendor to investigate chargebacks raised by the purchaser and, again, their decision is final.
In both instances, I understand Paypal withholds the payment until the dispute is resolved. This, to me, means your payment isn't truly 'in the bank' for up to 6 months.
I've had disputes raised against me (incorrectly of course!) over small amounts when selling things on ebay and it's more trouble that it's worth. I certainly wouldn't like to have a few thousand euros hanging in the balance.
Maybe it would be an idea to satisfy yourself of the facts in the Paypal 'Help' section before receiving large payments this way. ▲ Collapse
| | | | | very helpfull informations | Jan 23, 2012 |
Thanks a lot for the answers, that's exactly the kind of things I want to avoid. The information you have provided me with is very helpfull.
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Balasubramaniam L.
India
Local time: 17:53
Member (2006)
English to Hindi
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SITE LOCALIZER | Payment options | Jan 24, 2012 |
As a rule, insist on a bank transfer if the amount is large (say above 500 USD) as this is the cheapest way to receive large funds, especially if the sender also bears the bank fees. The reason, banks charge a fixed fee per transfer (usually in the range of 40 USD) and this fee is not dependent on the amount being transferred - it will be the same for 100 USD as for 1000 USD. Also, if the sender agrees to pick up this bank fee, you receive your money free of any transfer cost.
For s... See more As a rule, insist on a bank transfer if the amount is large (say above 500 USD) as this is the cheapest way to receive large funds, especially if the sender also bears the bank fees. The reason, banks charge a fixed fee per transfer (usually in the range of 40 USD) and this fee is not dependent on the amount being transferred - it will be the same for 100 USD as for 1000 USD. Also, if the sender agrees to pick up this bank fee, you receive your money free of any transfer cost.
For smaller amounts, various options are there, including paypal. I have found paypal to be rather costly, for two reasons -
1. they take about 2% of the amount transferred as their fee, so for large amounts this can be substantial.
2. If you are receiving money in one currency and withdrawing it in another currency, they also charge a currency conversion fee. Also, the exchange rate they offer between the two currencies is much lower than what banks will give you.
Both the above add up to quite a bit and can pinch hard if the amounts being received are large.
Other options to paypal are -
1. Skrill - (formerly Moneybookers)
2. Western Union
3. Cheque
They all have their plus and minus points.
The worst option is the last - cheque. It can takes months to clear if you are in another country from the sender and banks charge the moon to clear foreign currency cheques. ▲ Collapse
| | | | | And moreover... | Jan 24, 2012 |
Richard Foulkes wrote:
In both instances, I understand Paypal withholds the payment until the dispute is resolved. This, to me, means your payment isn't truly 'in the bank' for up to 6 months.
... even if you withdraw your money quickly enough and spend it on this new Ferrari Paypal will reach out to your bank account connected to the PP account and withdraw the sum involved, never giving a damn if this causes you an overdraft or not.
That is, unless you're covered by their Seller protection scheme - I've got no idea which countries are (apart from the US).
On the positive side, service purchases are not covered by the Paypal scheme of buyer protection, which means that in our case any chargeback must be based on the claim of erratic payment. Not many people are willing to risk fraudulent statements... but some are, as the recent example discussed on the Polish forum has demonstrated.
[Edited at 2012-01-24 20:29 GMT]
| | | | Sheila Wilson
Spain
Local time: 13:23
Member (2007)
English
+ ...
| Groundless fears, IMO | Jan 24, 2012 |
Richard Foulkes wrote:
When a bank transfer clears in my bank, it's mine. When you receive money in Paypal, the purchaser has, I think, up to 45 days to raise a dispute and claim they didn't receive the goods / service or that the goods weren't received as advertised / promised.
If they weren't happy with delivery and/or quality, why on earth would they settle your bill in the first place? If you didn't offer PayPal, couldn't they simply forget / refuse to pay and let you spend months and money chasing them?
I've had disputes raised against me (incorrectly of course!) over small amounts when selling things on ebay and it's more trouble that it's worth.
There's a world of difference between trading in goods as a private individual on Ebay and running a business offering PayPal as a payment method.
Sheila
| | | | LEXpert
United States
Local time: 07:23
Member (2008)
Croatian to English
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| PayPal can't take money from your bank account | Jan 24, 2012 |
Sheila Wilson wrote: Richard Foulkes wrote:
When a bank transfer clears in my bank, it's mine. When you receive money in Paypal, the purchaser has, I think, up to 45 days to raise a dispute and claim they didn't receive the goods / service or that the goods weren't received as advertised / promised. If they weren't happy with delivery and/or quality, why on earth would they settle your bill in the first place? If you didn't offer PayPal, couldn't they simply forget / refuse to pay and let you spend months and money chasing them? I've had disputes raised against me (incorrectly of course!) over small amounts when selling things on ebay and it's more trouble that it's worth. There's a world of difference between trading in goods as a private individual on Ebay and running a business offering PayPal as a payment method. Sheila
Agree.
BTW, PayPal doesn't take money from your bank account for the funds you owe them in the event of lost dispute. PP will pay the winner of the dispute, and then it will freeze your PP account and apply any new monies to the debt. You will have a negative PP balance until you pay up. Eventually, if you don't pay back what you owe, PayPal will initiate collection or legal proceedings.
Your bank won't simply give your money to PayPal or anyone else solely on the basis of their claim that you owe them. If your bank ever does that, find a new bank - fast, because there will probably be a heap of lawsuits coming its way.
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Richard Foulkes (X)
United Kingdom
Local time: 13:23
German to English
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| I'd prefer to have no fears than groundless ones... | Jan 25, 2012 |
@Sheila - Why would somebody pay you then later change their mind? Maybe they'd be like those millions of people who take things back to a shop every year after previously having sight of it / trying it on and then paying for it? Or maybe a translator / agency relationship turns sour - not uncommon. Or maybe an agency doesn't have knowledge of the source language and simply passes on your translation to the end client and crosses their fingers but has a clause in the their T&Cs, just in case, to... See more @Sheila - Why would somebody pay you then later change their mind? Maybe they'd be like those millions of people who take things back to a shop every year after previously having sight of it / trying it on and then paying for it? Or maybe a translator / agency relationship turns sour - not uncommon. Or maybe an agency doesn't have knowledge of the source language and simply passes on your translation to the end client and crosses their fingers but has a clause in the their T&Cs, just in case, to say the translator is liable for subsequently discovered defects (I'm sure we've all seen those)? Or maybe an agency is about to go under and desperately looking to save / recover money any way they can?
All hypothetical of course, and I could come up with many more. But none apply to bank transfers. I was merely flagging this up to the OP for info.
I disagree that there's a 'world of difference' with ebay. I think the principle is quite similar. You provide a product or service in exchange for money. As I said, I'm not sure how a claim of a defective translation would stand up against the 'not as advertised' issue, but any claim would be decided by a bod at Paypal without an ounce of knowledge of translation. Maybe we'll find out...it won't be affecting me though.
@Rudolf - phew, that's ok then. But I believe disputed monies would still be deducted from any positive balance...again, it won't be affecting me but I thought the OP should know. ▲ Collapse
| | | | LEXpert
United States
Local time: 07:23
Member (2008)
Croatian to English
+ ...
| Goods vs services | Jan 25, 2012 |
Richard Foulkes wrote: I disagree that there's a 'world of difference' with ebay. I think the principle is quite similar. You provide a product or service in exchange for money. As I said, I'm not sure how a claim of a defective translation would stand up against the 'not as advertised' issue, but any claim would be decided by a bod at Paypal without an ounce of knowledge of translation. Maybe we'll find out...it won't be affecting me though .
Interesting point... I think that the main difference is that the retail buyer of a good must pay up front, and therefore any subsequent decision not to pay due to perceived defects must be realized in the form of a payment reversal. OTOH, the payment for a service such as translation will generally be made with sufficient delay for the customer to determine whether the translation is satisfactory, i.e., there is a strong presumption that payment = acceptance. All the scenarios you mention are possible, though - if rare.
Besides the merits of the case, much depends on the time frame. Of all the potential levels of dispute resolution for, e.g., an eBay dispute (1. eBay 2. PayPal 3. the credit card, if any, which you funded the PayPal payment with), the credit card company probably has the most generous time frames, but I doubt that any CC company would consider a dispute after six months or so have passed. PayPal's dispute time frames are fairly right - for eBay purchases I believe it's 45 days.
Richard Foulkes wrote: @Rudolf - phew, that's ok then . But I believe disputed monies would still be deducted from any positive balance...
That is definitely true - they will apply any existing positive balance to resolve the dispute.
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