The Freelance Translator and PayPal

Anita Karlson Henssler A problem most freelance translators are faces 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
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.

Lets have a look at an example. I perform a small translation and
charge a minimum fee of 20 Euro. 3.4 % of 20 Euro is 0.68 Euro,
plus the flat fee of 0.35 Euro. Add the cross boarder fee of 1%,
which is 0.20 Euro. So, of my 20 Euros PayPal takes 1.20 Euros.
In addition comes 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 reason.

Some negative aspects of PayPal

The problems with PayPal only start when you have a problem, so
to speak. Resolving 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 machines!

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 numbers, to hackers
going in to 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 normal
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:

http://www.paypalwarning.com
http://www.aboutpaypal.org/

A few tips for using PayPal

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 with criminal activity.

As long as you use PayPal to receive money and don’t connect you
PayPal account to a credit card the risk is relatively low. In
the worst case you could loose the money available on you
PayPal account, threw whatever reason: hackers getting in to
your account, PayPal freezing your account etc.

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 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 threw PayPal.

I am sure there soon will be 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 threw PayPal.

1. Only receive smaller amounts threw 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. Log in to 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.

About the Author

About the author
Anita Karlson Henssler is working as a freelance translator.
Join PolarZone; her Free Newsletter for the Freelancer.
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