Here’s a question from a reader: What’s the best way to have clients in my own country or in other countries pay me? I’m in the US, and checks seem slow but electronic payments seem expensive? How can I handle this?
What’s the best way to receive money from clients, especially if you live in the US?
Well…the tricky part here is “especially if you live in the US.” The best way to receive money from clients is to live in a country that has an actual modern banking system (sorry for that snarky dig, US banking system) and has converted to low-fee or no-fee electronic payments. But if you live in a country that hasn’t done that–like let’s say, the US, where, by various estimates, up to 50% of business payments are still made by paper check, and up to 50% of businesses don’t use electronic payments at all–then you have to be strategic about how you receive payments.
Here, I want to give a shoutout to my friend and colleague Eve Lindemuth Bodeux, who has presented and written extensively about international payments, including on this episode of Speaking of Translation, and in this ATA Chronicle article. Eve’s experience with payment methods is much more comprehensive than mine, so I’ll focus here on how I handle payments from various types of clients.
So here’s my short answer to this question: the best way to receive money from clients (especially if you live in the US), is via the method that is the most convenient, the least onerous, and the least expensive for the client, as long as that method is not completely unacceptable or financially nonsensical for you. Here’s what I mean: the vast majority of the time, I offer clients a variety of payment methods and let them choose the one that works best for them. In a very few cases (i.e. a client who wants to pay by bank wire transfer for a minimum charge job, or a client who wants to pay by paper check in a currency other than US dollars) I will outright say no, but that’s pretty rare. Let’s dig in a little further.
Why (on earth) do paper checks persist?
This is purely a rant and not at all constructive, but let’s pause for a moment and ask: why does the US cling so tenaciously to paper checks? When, in many other countries, people don’t even know how to write checks anymore? What’s going on here? I’m not a banker, but I’d theorize that:
- Checks are free. In the US, we have yet to see widespread use of an electronic payment system that’s free. There are possibilities, but they all have issues. For example there’s Zelle, but if you have multiple sets of accounts at one bank (which I do), you have to (as far as I can tell) link Zelle to either your personal account or your business account, because your Zelle ID is an e-mail address, not your account number.
- And on and on it goes: PayPal and Venmo transactions to “friends and family” are sometimes free, but not covered by purchase protection.
- Checks have a few other “advantages” (I put that in quotes, because really, who likes checks? Basically no one…), largely related to the fact that the US has been so slow to adopt electronic payments. People are familiar with them and understand how they work; many people in the US who I talk to are still terrified that if they give someone their bank account details–for example, for an electronic payment–that person can somehow steal all the money out of their account. The death of checks will be a beautiful moment, but it’s not coming soon enough.
Live with fees and hassle, or try to find a better way?
Especially if you live in the US, I think your first payment method question is a conceptual one: am I willing to put up with bank fees and bank hassles, in the name of “the cost of doing business,” or am I not? That may sound kind of weird, but here’s what I mean: I paid $3,154 in banking fees in 2019. Oh, yes. even my accountant almost fell off her chair when I read her the number. However, $2,683 of that was PayPal fees on my online course and book sales, and I don’t really see a way to sell those things without taking credit cards. Some people (thank you!) will e-mail me and offer to pay for their online course registration via TransferWise, but otherwise it’s PayPal and a commission of approximately 3.5% on every transaction. So there’s the “expense” part of the equation.
On the flip side, I have numerous clients who still pay by paper check. It’s a hassle. I have to wait for the check to arrive. Then I have to not toss the check into the recycling bin with all the rest of the mail which is spam. Then I have to deposit the check using my bank’s app on my phone (as an alternative to taking it to the ATM), keep the signed check until it clears, then shred it, etc. etc. So there’s the “hassle” part of the equation.
But here’s the point: I have personally decided to chalk all of this up to “whatever,” or–phrased more professionally–“the cost of doing business.” With each invoice, I give the client at least three ways to pay:
- Mail a check
- Pay electronically, by bank transfer
- Pay electronically by credit card, using PayPal.me
And whatever the client’s preferred option is, that’s what they do, unless there are some really extenuating circumstances. For example if a new client outside the US wants me to do a minimum charge job, I’ll ask ahead of time how they pay, because I don’t want to pay $15 (the flat-rate international wire transfer fee at Chase, where I have my business accounts) to receive something like $75. But otherwise, I just present the client with the options, and they pick.
But couldn’t you ask/tell the client…
Sure. Sure, I could ask/tell the client that I accept only electronic payments, or that wire transfers must be made by TransferWise–in my experience, it’s the cheapest international wire transfer option, and it’s often even free, as if the payment were coming as a US direct deposit–or that if the client wants to pay by credit card, they have to pay the processing fee. All of those things are possible. However, one of my values in my business is to be as painless and low-stress as possible to deal with. I want clients to finish a project with me and think, “That was so much less stressful than we thought!” And part of that is saying, “Here’s how I accept payments. Take your pick.” If the client already has an established wire transfer method set up, I’m not going to force them to create an account with TransferWise to save me $15. In the same way that I might ask someone, “Would you like to talk on the phone, Skype, or Zoom?” and I don’t really question why they prefer Zoom over Skype, I just put my payment options out to the client and let them have at it.
It’s also completely fine (and a lot cheaper than what I’m doing!) to be less permissive with your clients when it comes to payments. I know several translators who are part-time or full-time digital nomads, who absolutely refuse to take paper checks. If a client’s only way to pay is by paper check, they have to find someone else. I know a couple of other translators who will only accept wire transfers through TransferWise. All of those options are completely fine, as long as you’ve deliberately decided that this is what’s best for your business.
“Because it costs money” is not a great decision-making tool
My preferred ways to get paid are–roughly in descending order of preference:
- TransferWise (free, fast, easy)
- PayPal for small amounts (fee is a percentage so it’s a small amount, fast, easy)
- Paper check (free, slow, painful)
- Bank wire transfer for large amounts ($15 but at least it’s a flat rate, fast, easy)
- PayPal for large amounts (fee is a percentage so it can be a big hit, fast, easy)
- Bank wire transfer for small amounts (pay $15 to receive $75?, fast, easy)
Regardless of your preference, I think there are way too many translators objecting to various payment methods not because they’re objectively really expensive, but because they cost money at all. PayPal for large amounts is really expensive; it’s worth avoiding it if you can. But refusing to see any fee at all as the cost of doing business is, in my opinion, short-sighted.
Readers, over to you? Thoughts on what payment methods you’re using these days and what you think of them?