Paypal - painless payment abroad?

AS MORE English language media outlets spring up all over the world, there's potentially a big market for writing and photography for publications abroad. (The US market, for example, is easily four times the size of the UK's.)

One of the biggest obstacles to writing for the media abroad is the hassle, time and expense in getting paid. Freelances may like to consider taking a look at the Paypal system, (www.paypal.com) which seems to offer a way to get paid relatively quickly, and with charges a lot lower than overseas banks and/or your bank will string you for foreign currency transactions.

Luxembourg-based Paypal isn't, strictly speaking, a bank, even though you open a Paypal "account. People pay money into the system through transfers from their bank account or credit card, and then send an instruction for someone else to be paid out of some of that money that they have already paid into the system. It can handle payments in 17 currencies, and can deal with payments to a lot more countries, although the money will arrive in US dollars, so there will be a small charge attached for conversion.

The fees system isn't very transparent. It seems that you get hit with fees (deducted from the amount paid to you) when you withdraw money from the Paypal system into your bank or credit card account. These charges can be anything from 20p to £2, depending on where you are in the world. There may in some (unclear) circumstances be a transaction charge of up to two per cent of the total, but it still works out cheaper and quicker than using foreign banks. If you accumulate money paid to you via Paypal in your Paypal "account," and later spend it on stuff through the Paypal system rather than withdrawing it, this, in theory at least, minimises the charges you end up paying.

A glance at Paypal's website suggests that humble freelances who are basically only using the system to receive money can open a Paypal account for free, and can get away with a 'personal account which has minimal transaction charges. Every Paypal account is connected to an email address, so you just include the relevant email address and account name on your invoice, after the word "Paypal", and your client should know how to pay you. It saves them a bunch of money and hassle too, so they're usually more than happy to do it that way.

The system appears to be safer than credit card transactions over the net. Problems arise when there are disputes between payers and payees, and there have been lawsuits around Paypal's dispute resolution process. You've still got no guarantee the client will actually cough up into the Paypal system, of course, and it remains as hard as it has ever been to squeeze money out of clients abroad who don't pay. (See www.londonfreelance.org/fl/0709scc.html and www.londonfreelance.org/fl/0707hoff - especially its last three paragraphs - for more on the subject.)

There are obscure Paypal restrictions for each country, too. You can't receive money via Paypal from China (except into another Chinese account in the renminbi currency) and a freelance in Korea tells us that the bank accounts of resident aliens in that country are identified by a special number which means these can't receive money through Paypal. HM Customs and Revenue have already successfully prosecuted people who've accumulated large undeclared sums via Paypal, so don't say we didn't warn you of the need to declare it just like any other kind of income.

We invite freelances with more experience than us at getting paid for work done abroad via Paypal to pass on to the Freelance their wisdom regarding the risks, drawbacks, advantages of this payment system.

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