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Agency charging fees for payment - is this normal practice?
Thread poster: John Gamble
John Gamble
John Gamble  Identity Verified
Local time: 22:54
Swedish to English
TOPIC STARTER
Thanks for your reply. Apr 16, 2018

Lian Pang wrote:

In my practice I mainly use Paypal for oversea transfers. And as a service provider, Paypal charges me for receiving payments. Sometimes the agencies will cover the commission for me by sending a little extra money.

I have never heard or encountered any agency charges as much as 10$ per paypal payment. That's just strange. I suggest you do some further investigation on the legitimacy of this agency.

If the charge is a one-off fixed thing for a project over, say, 1000 dollars, then I guess you can consider it. But if it's written in the contract that for EVERY paypal payment you will be charged 10$, I suggest you investigate and contact their head office, or simply get away from this agency.

It might be a scam. You never know.


Hi Lian,

Thanks for your reply. I don't think it's a scam, in the sense of being anything illegal, but I'd say it was a scam in the sense of being underhand business practice. In any case, I've decided not to work for this agency.

Regards,

John


 
José Henrique Lamensdorf
José Henrique Lamensdorf  Identity Verified
Brazil
Local time: 19:54
English to Portuguese
+ ...
In memoriam
On behalf of fairness, a roundup, and some transparency Apr 16, 2018

Years ago, I decided to separate 'translation costs' from 'financial costs', in order to let my clients have a choice.

My RATE for my translation or other services alone doesn't change. If the client chose me to do a job, they chose my rates, too. Unless the requirements change, I won't grant any discounts on my initial bid. AMOF I'd consider it dishonest if I did, since
... See more
Years ago, I decided to separate 'translation costs' from 'financial costs', in order to let my clients have a choice.

My RATE for my translation or other services alone doesn't change. If the client chose me to do a job, they chose my rates, too. Unless the requirements change, I won't grant any discounts on my initial bid. AMOF I'd consider it dishonest if I did, since I'd be ripping off by default the less assertive clients, those who didn't ask for a discount.

However I think my client should be free to choose the FINANCIAL SERVICES they'll hire. As a professional translator, I'd be an eternal amateur in financial services, something I'm not interested at all in providing. Large banks compete against each other on which one offers loans at the lowest interest rate. As an amateur in their trade, my interest rates should be - by far - the highest around.

PayPal is owned by - and hence supposedly devised for - eBay, i.e. selling 'stuff' online. It's a different setup than for providing translation (or any other) services on the web. In its policies, PayPal strictly and explicitly forbids surcharging the 'buyer' for the fees it deducts from the amount receivable. Penalties range from freezing the account to scooping the balance.

In Brazil, PayPal deducts from the payee's receivables ~6.5% in fees, and openly (it's in their help screens) adopts a 3.5% lower-than-market foreign currency exchange rate. Hence a translator in Brazil 'pays' ~10% for the privilege of getting paid via PayPal.

In view of the aforementioned penalties, I state my "standard" rate for payment via PayPal due in two weeks (payment term being discussed below). I offer the client a 10% discount (= PayPal total cost to me) if they choose any other payment method from bank/wire transfers, Payoneer, or P2P services (e.g. Moneygram, Western Union). As PayPal will not be a party in the transaction, they cannot impose me any penalty whatsoever.

Some comments on these methods:

Bank/wire transfers - Each party (viz. translator/client) is free to choose the bank they use, so it is fair that they pay the associated fees.

My bank (Itau) charges be BRL 115 (~USD 40) to receive a wire transfer. A while ago, I learned that HSBC in Brazil (bought over by Santander) charged a fee 3x higher for the same servicr. Since Itau was MY choice, it is fair that I should pay these fees.

Banks also vary in the fees they charge from the sender. I've seen these ranging from USD 10 to 65 overseas. As the client is free to choose the bank they use, I think it's fair that they pay for the associated fees. However it is understandable that they won't include "payment fees" in the budget for a translation job, so I include them in my total price, when it's the case.

Payoneer, I've only used it once. It seems similar to PayPal, however the fees they charge are capped to a considerably low amount, so I have no objection to charge these to the cost of doing business.

P2P services are cheap, often USD 5 for payments up to USD 3K. However they are - as the name says, person-to-person. IOW they require someone at the client receiving payment in cash on the translator's behalf, and then sending the funds as an individual. In a Mom & Pop translation agency, this is simple. In a larger operation, it is too easy for the cash to vanish in the process, leaving no trail.



Then there is the payment term issue. A translator accepting payment later than COD is tantamount to granting his/her client a loan for the time elapsed between delivery and payment. In countries where interest rates are low, a small fraction of 1% per month, this is just a matter of cash flow.

However if the translator is located in a country where the interest rates charged by banks, credit cards, and other companies are two-digit in monthly percentage (e.g. Brazil - where I am - Argentina, and some others), that translator will be paying a high price - at no other benefit than goodwill - to fund his/her overseas clients' operating capital. If the client abroad doesn't have the cash to pay on delivery, and secures a local loan, it will take them years to accrue as much interest as it does to the translator located in a high-interest country to pay his/her bills with the payment received after one month, or later.

So if my client chooses to pay earlier, say, in two business days after delivery instead of the stated two weeks, they can get an additional 6.6% discount from me. Of course, if they want to pay a month or more later, my total price will be way higher, on account on my improperly located and admittedly amateur financial services.

Who - in order to pay for a translation job - instead of getting a loan, say, from a reputable bank at their location, would rather "borrow" money from an unwilling amateur financier (a professional translator) in Brazil? For the sake of record, I asked, and my bank does NOT offer translation services of any kind.

Well, the truth is that many translation agencies do. The smarter ones pay me COD, and get the same service 16.6% cheaper! Nevertheless, I briefly (in three lines) state my basic rates for the different payment methods and terms to all my prospects, so they have a CHOICE on financial services. I love transparency!
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Marissa Aguayo Gavilano
Marissa Aguayo Gavilano  Identity Verified
Peru
English to Spanish
+ ...
Not for every country Apr 16, 2018

tmm99 wrote:

I thought you couldn't get a bank account without providing the bank with proof of residence? The borderless banking feature must be the key to bypass the residency issue. I get paid via PayPal from a Japanese agency (with a huge fee by PayPal) because I don't live in Japan and I do not have a bank account in Japan they can transfer money to. I will look into transferwise and see if it can help me also.

[Edited at 2018-04-15 15:41 GMT]



You won't be able to get an account in Japan via Transferwise. They only offer USD (with a US bank), EUR (with a German bank), and GBP (with a British bank). You do need to provide proof of residency, that doesn't mean you need to live in the same country as the bank. I provided proof that I live in the UK and that was enough to be able to open these accounts.


 
Tomo Olson
Tomo Olson  Identity Verified
Canada
Local time: 18:54
Japanese to English
Back to PayPal Apr 21, 2018

Marissa Aguayo Gavilano wrote:

tmm99 wrote:

I thought you couldn't get a bank account without providing the bank with proof of residence? The borderless banking feature must be the key to bypass the residency issue. I get paid via PayPal from a Japanese agency (with a huge fee by PayPal) because I don't live in Japan and I do not have a bank account in Japan they can transfer money to. I will look into transferwise and see if it can help me also.

[Edited at 2018-04-15 15:41 GMT]



You won't be able to get an account in Japan via Transferwise. They only offer USD (with a US bank), EUR (with a German bank), and GBP (with a British bank). You do need to provide proof of residency, that doesn't mean you need to live in the same country as the bank. I provided proof that I live in the UK and that was enough to be able to open these accounts.


Thank you, Marissa. I looked into it, and according to transferwise, Japan is one of the few countries which won't allow you to open an account unless you can prove residency. I guess I will have to stick with PayPal for payment.


 
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Agency charging fees for payment - is this normal practice?







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