Dealing with exchange rates and transfer fees
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Thread: Dealing with exchange rates and transfer fees

  1. #1
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    Dealing with exchange rates and transfer fees

    So recently I've dipped my wick into the well of freelancing and a client is paying me about 50% upfront, so I'm very lucky to have such an honest guy as my client.

    But the problem is, there's the agreed upon amount (For arguments sake, 1000 USD.) Since the AUD is around 0.96 to the USD, this means that I'm already down $41. Then apparently Paypal lumps in a currency conversion fee (In the case of Australia, $15.00). And then there's a complicated table explaining what the base transfer fee for invoicing internationally is, but for now I'm going to put it at 2.4% + 30c flat.

    The point of all this math is, after we've agreed upon an amount obviously a lot of money gets lost in the process. Now for this particular job that I'm doing I'm not going to double back and ask the client to pay the extra hole because it was never agreed upon and would probably be rude, but I want to know for further reference what to do.

    I think it's case by case; if the client says, 'My Budget is X' then it's my responsibility to check out all the mathematics behind it and see if the money I'm actually receiving is worth my time. But if I say 'my base working rate is X, and your scope will take Y amount of time, therefore with all taxes and fees included my quote is Z. I think who has right of way in this situation is all to do with bargaining power but I wanted to get your guy's experience on this.

    Does anyone who has experience working internationally, especially with Paypal, have any advice on this matter? Specifically a way to bring the costs to the opposite party at the negotiating table. That would be much appreciated.



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    I just charge according to my own needs in SA. What I require to cover living costs, time and of course to make a profit.
    Plus enough to cover paypal and tax.

    Whatever that works out to in dollars is the price I use.

    The clients budget doesn't matter to me. I don't cater to their budget, I cater to mine.
    I don't mean that to sound elitist, but whether they can afford me or not is, unfortunately, their problem.

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    I just include the fees in the price I quote my clients, I don't list them as extras.
    Just increase your fees according to the amount you need to have in the end. No negotiating for Paypal fees needed.
    (edit: Because it probably feels like a better deal to your client if Paypal and conversion fees are not listed separately.)

    Paypal is still one of the cheaper and faster ways to send and receive money internationally. International bank transfer is slower and costs at least the same amount, while Western Union appears to be even more expensive, usually for the sender. Seeing no alternative I stick with Paypal.

    Last edited by Maidith; November 12th, 2012 at 08:52 AM.
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    As you do this more and more you will learn to include everything in your quote. This takes practice like everything else, different countries etc.. When you start selling originals and prints then shipping becomes part of the hassle and that's even more fun.

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    Paypal etc is just cost of doing business, but I didnt understand this:

    "But the problem is, there's the agreed upon amount (For arguments sake, 1000 USD.) Since the AUD is around 0.96 to the USD, this means that I'm already down $41."

    1000 US dollars in australian dollars is still 1000 us dollars..

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    The currency conversion cost is 4%, unless you're in the UK or Ireland ( https://cms.paypal.com/uk/cgi-bin/ma...en_GB#Schedule 1. Table of Fees ).

    Also, check if your account is in USD like Kendall said.

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    I just tack an extra 3% on for paypal transactions. Depending on what type of paypal account your client has the fees vary. (between 1.5-4.2% ? can't remember). I add it as a line item on the invoice and add it in the conditions on quotes. Never have trouble with it. If they questioned it I'd just ask them to confirm their rate. If they can be bothered finding it out I'd charge them that, otherwise they can just take a general rate. It's their money and moving it around is their cost, same as if they wrote a cheque and mailed it to you.

    Taking a hit on currency fluctuation is just tough. Sometimes it goes your way, sometimes it doesn't. Every business in the world that trades across borders takes a hit on that. Really smart operators should build that into their pricing structure too I suppose.

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