What are my options?
October 4, 2005 1:08 AM   Subscribe

Is Paypal the best method for someone in Europe to get paid by a client in the US?

I've recently been doing some work for a client in the US who will pay me in dollars. Is paypal the best option? I've only ever used the personal account in paypal to make payments, never to receive payments. I presume I need to change to a premium paypal account. The question is are there other methods for occasional cross-continental payments? I'm specifically looking for ease of use and low transfer fee and lowest possible exchange rate. Any other suggestions? If paypal is the best, are pitfalls that I need to avoid?
posted by sic to Work & Money (10 answers total)
This page details Paypal's fees for transactions within and outside the US. As the recipient, you will pay an exchange fee on top of your transfer fee.

I imagine bank transfers are an option. You might pay smaller fees, albeit via a slower, less convenient transaction.
posted by Rothko at 1:12 AM on October 4, 2005

I've received ungodly amounts of money through PayPal over the last four years. Nearly all of it from the US. You will need a premium account, yes. You will lose 3.9% + 30 cents on each transaction, and PayPal's exchange rate is a few percent off of ideal. From dollars to pounds I generally divide by 2, and that's how I set my rates.

Wire transfers are a lot better on larger transactions, though my bank charges me £7 for converting them. They're fast though, but cause the client at the other end a bit of work.. whereas if they already use PayPal, it's easy.

After a while PayPal will demand documentation and ID from you to comply with the EU's anti money laundering laws, so bear that in mind too.
posted by wackybrit at 1:29 AM on October 4, 2005

By ungodly I'm not talking about hundreds of thousands or anything, by the way.. just usually about half my income for the past few years. :)
posted by wackybrit at 1:33 AM on October 4, 2005

Personally I'd just recommend using a bank. It is possible for a US business client to pay you to your UK bank - at least, that is the case with my UK business account.

Though I've received and sent huge amounts of money via PayPal, as Wackybrit says there are complications after you've transferred a certain amount of money. Plus, a Google search will show you just how harsh PayPal can be if it decides it wants to freeze your account and keep your money. PayPal is more convenient but in my humble opinion you're taking your financial life into your hands.
posted by skylar at 1:35 AM on October 4, 2005

I've gone Europe-to-US, and its pretty easy to wire the money through a bank. Just go to your bank, and ask them to write down all the information you'd need to transfer money to your account from the US.

You'll get a better exchange rate, and the overhead (usually about $10 on each side) should be made up for if you're transferring over $1,000.

Sorry the units are in dollars, but it roughly works out for Euros too.
posted by onalark at 4:53 AM on October 4, 2005

www.moneybookers.com ?
posted by banished at 5:45 AM on October 4, 2005

No to PayPal, yes to bank transfers. The protocol you need is called SWIFT, and you'll have to ask your bank for its SWIFT identifier. Or look it up here.
posted by holgate at 5:55 AM on October 4, 2005

It all depends on how much your bank charges for transfers from outside the Euro zone. If they're convenient enough then that's definitely the best method. Especially for higher amounts.

The main downside about Paypal for dollar to euro payments is the exchange rate, like wackybrit said it is far from ideal - it's not updated daily and they also retain an extra 2.5%. On the other hand it's faster, less hassle and you can accept payments directly by credit card. I use it for small-ish amounts for which bank transfer would be impractical or too expensive.

Moneybookers and PPPay are other good options, but overall the charges are similar to Paypal.
posted by funambulist at 6:40 AM on October 4, 2005

Response by poster: Thanks for the input guys. I'm in Spain, so I'm not sure if my bank has as good a rate as the English banks for transfers out of the Eurozone. I used to do wire transfers about 6 years ago when the bulk of my salary came from US clients and I remember it being somewhat expensive (but worth it) at the time. Since then paypal has become ubiquitous, so I thought that it might have a better deal.

I'm going to check with my bank.

Thanks again.
posted by sic at 8:17 AM on October 4, 2005

I also live in Spain and just had to transfer a large sum of money from a US Citibank account. I found that the exchange rate Citi offered was a mess. I wire transfered the money into La Caixa (where I also have an account) through the Citibank webpage. La Caixa exchanged the dollars to euros. There was a $30 fee from Citibank and also a fraction of a percent fee on the total from La Caixa (which added up to about 20 euros on the total transferred).

Those are some hefty fees but you are going to get nailed no matter what you do - you really need to look out at the exchange rate because it is amazing how much they differ. La Caixa, for example, was at 1.20 while Citibank would have transfered at 1.28!!!

I don't know what the exchange rate is for Paypal. I didn't even consider the option because their fees are generally so bad.
posted by BigBrownBear at 8:48 AM on October 4, 2005

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