The freelance translator and PayPal
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One problem most freelance translators
are faced with is how to receive payment. In
particular: How to receive payment for small
jobs. Many translation agencies are reluctant
to pay small fees via wire transfer due to the
transaction fees; often they will send you a
check instead. And I suppose I don't have to
tell you: The banks charge an enormous commission
when you come and want to cash in your check.
Then along came PayPal...
Basically PayPal lets you send and receive payment
over the Internet. It bases its service on the
existing bank and credit card networks, but
it is not a bank in itself.
Registering is free; all you need is an email
address. Sending money is free - receiving money
however, is not. You pay 3.4 % of the received
amount unless you are receiving Dollars; in
this case you pay 2.9 % of the received amount.
Then you have to pay a flat fee for each transaction:
0.35 Euros or 0.30 Dollars. In addition you
have to pay a cross boarder fee of 0.5 % - 1.0
% if you receive payment from someone located
in another country.
Then you have to pay a small fee when you withdraw
your money to your regular bank account. (Unless
your bank is located in the United States; then
you don't have to pay this fee.) How much this
fee is depends on the country you are located
in. I for instance live in Switzerland and have
to pay 0.50 CHF to withdraw to my account. Banks
in countries within EU, except the United Kingdom,
all charge 1.0 Euro.
Let us have a look at an example. I perform
a small translation and charge a minimum fee
of 20 Euros. 3.4 % of 20 Euros is 0.68 Euros,
plus the flat fee of 0.35 Euros. Add the cross
boarder fee of 1%, which is 0.20 Euros. So,
of my 20 Euros PayPal takes 1.20 Euros. In addition
I have to pay the fee of 0.50 CHF for withdrawing
the money to my regular bank account.
If the agency sent me a check instead of using
PayPal, my bank would charge 7.50 CHF (4.80
Euros) for cashing the check for me. Each bank
has its own fees for cashing checks and receiving
wire transfers. But for smaller amounts PayPal
is definitely the cheapest way of accepting
payment. You will have to do a small calculation
and see how large amounts you can receive before
the PayPal fees exceed the fees your bank charges.
But is it safe?
Most freelance translators using this way of
receiving payment are satisfied with the service
and have had no problem with PayPal. I have
only heard of one-two translators having their
accounts frozen by PayPal for no legitimate
Some negative aspects of PayPal
The problems with PayPal only start when you
have a problem, so to speak. Solving a problem
can be very time-consuming and frustrating,
and in many cases no solution is reached. Their
customer support is not exactly something to
brag about. It is very difficult to get behind
their wall of auto responders and answering
Another thing to be aware
of are scams. There are numerous scams around,
from people sending out emails pretending to
be from PayPal asking you to confirm your credit
card number, to hackers entering your account
and spending all your money.
Other negative aspects of PayPal are that it
is not available in all countries and you can
only receive payment in a few currencies.
By using PayPal you take a large risk compared
to using the traditional banking system. The
chance of loosing your money is there. At the
moment there are several lawsuits filed against
PayPal and a lot of people who have lost money
and not received any compensation. Have a look
at these web sites:
A few tips for using
The majority of the people having problems with
PayPal are people selling items via auctions
etc. Some examples: Payment is cashed from the
buyers account and not transferred to the sellers
account. A buyer uses a stolen credit card number
to purchase items from you and your account
risk being frozen for being involved in criminal
As long as you use PayPal to receive money and
don't connect your PayPal account to a credit
card the risk is relatively low. In the worst
case you could loose the money available on
your PayPal account, for whatever reason: hackers
getting into your account, PayPal freezing your
Having read a few of the horror stories about
PayPal, I am very cautious using their system.
But I still use it for receiving small payments.
Basically out of a lack of alternatives. PayPal
was the first company to offer this kind of
service, and for a long time it was the only
company providing this service.
In the last year or so a few other companies
have started providing the same service or very
similar services. Most of them are very new
companies and still not industry standard. When
I ask agencies if they pay via Moneybookers
for instance, they have never heard of this.
But many of them can offer payment through PayPal.
I am sure we soon will have very good alternatives.
But for now it seems we are stuck with PayPal
whether we like it or not.
Guidelines for using PayPal
The only advice I can give is to be careful
using PayPal. Here are some tips to help minimize
the risk of loosing money through PayPal.
1. Only receive smaller amounts through PayPal.
2. Never leave large amounts on your PayPal
account: Withdraw your money as soon as you
have a couple of hundred Euros/Dollars.
3. Access your account and check that everything
is ok each time you expect to receive payment.
4. Be prepared to loose the money on your account.
Anita Karlson Henssler
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