Paypal- Should I request to be paid in USD or in my local currency?
June 11, 2020 10:32 PM   Subscribe

I am a freelancer with a regular client whose fees are denominated in USD. She is paying me through paypal. Should I request for USD or to be paid in my local Asian currency given that paypal has a terrible currency conversion rate?

Since the amounts are not that large (<USD 1000), she is unwilling to do wire transfers.

Paypal does not allow me to withdraw USD to my local bank account, only local Asian currency. If I'm not wrong, this means that I would have to convert my USD into local Asian currency at paypal's terrible rate before I can withdraw the money.

I am wondering if I should ask her to pay me in local currency instead but that brings up the problem of which exchange rate to use and on what date (payment is not regular and not on a fixed date every month).

Or should I just suck it up and stick to USD? It would be the simplest way and I could use some of the USD to buy from US merchants and then convert the rest. Some people have suggested Transferwise but I feel uneasy about using Transferwise.
posted by whitelotus to Work & Money (20 answers total) 1 user marked this as a favorite
 
I am wondering if I should ask her to pay me in local currency instead but that brings up the problem of which exchange rate to use and on what date (payment is not regular and not on a fixed date every month).

In a perfect world where she needs your services and will pay for them without question, and it's just a matter of figuring out how to do the billing, you would just build the conversion fee into your invoice. Make a reasonable estimate at what the conversion rate will be (and maybe reduce it a little if it makes sense to spend part of it mail ordering things from retailers that you can pay with Paypal), unless your local currency is unstable to the point that even a week's time could make a big difference.

On the other hand, per your previous asks - if this work is the main thing keeping you afloat at the moment and you have a feeling that charging her more might cause her to balk and switch to someone local with less currency friction issues, consider whether it's worth sucking it up and just eating the fees. If her view is that the work is worth $20/hour and there's any number of people willing to work for that rate, she may view exchange issues as your problem.
posted by Candleman at 12:59 AM on June 12, 2020 [2 favorites]


I’ve looked at this a lot and I just want to say please don’t be worried about using TransferWise- it’s made exchanging money with my family back and and paying my student loans off back in Australia (I am in the U.K.) so much cheaper and more convenient and I’ve not had a single issue in over three years now.
posted by ozgirlabroad at 1:00 AM on June 12, 2020


I use Transferwise all the time. They're great.
posted by all the light we cannot see at 1:02 AM on June 12, 2020 [1 favorite]


The currency is important.

When I contracted to a US company I was told to bill in USD.
I did and the exchange rate against the £ went bad.
The cost to the company remained the same but I would never know how much I would end up with.

If you ask to be paid in your local currency, then you have stability - but the person paying does not. They will have to absorb any costs if the exchange rate goes bad.
posted by I shot a fox in Skyrim and it made me sad at 1:27 AM on June 12, 2020


For transferwise: Will she be paying me in USD (she is not in the US btw but the fees were negotiated in USD and cannot be changed) or local currency? I have no idea how transferwise works. Does the money get deposited directly into my bank account or do I have to do a withdrawal? I do have a foreign currency account that can hold USD.
posted by whitelotus at 1:36 AM on June 12, 2020


fees were negotiated in USD and cannot be changed ... I do have a foreign currency account that can hold USD

Then the best thing all round, it seems to me, would be for you to hook that foreign-currency account up to your Paypal so that you can accept your client's Paypal-mediated USD payments without Paypal being involved in any currency exchange, and then for you to do the exchange entirely on your end whenever the exchange rates look favourable.

If PayPal won't play nice with your present bank, try working with PayPal customer service to find one that both of you can use this way.
posted by flabdablet at 2:10 AM on June 12, 2020


flabdablet: As I mentioned, "Paypal does not allow me to withdraw USD to my local bank account, only local Asian currency." It doesn't help even if I have a foreign currency account.

Their policy is that you can only withdraw in the local currency of whatever country your bank account is in.

Bonus: Due to Covid-19, there is no Paypal phone customer service. They have not responded to email inquiries for weeks. It's a hard time to sort out tricky issues.
posted by whitelotus at 2:22 AM on June 12, 2020


Their policy is that you can only withdraw in the local currency of whatever country your bank account is in

Screw 'em, then. Transferwise it is.
posted by flabdablet at 2:39 AM on June 12, 2020


Sorry, forgot to add. Not sure if I can persuade client to use transferwise either. i believe she would need to upload photo id etc for identity verification? She naturally wants to pay via paypal because it's the easiest option for her.

If it's a friend, it'll be different but it's just a freelance client.
posted by whitelotus at 2:53 AM on June 12, 2020


I've never used either service so sorry if this is wrong, but if she transfers money to PayPal, would you be able to then transfer that money to a Transferwise account and from there to your bank account? It might make sense if the combined service fees are less than the exchange rate differential.
posted by trig at 3:08 AM on June 12, 2020


trig: I don't believe that is possible. As far as I know, you can only withdraw from paypal to a bank account or a card.
posted by whitelotus at 3:12 AM on June 12, 2020


Transferwise has multi-currency accounts. To anyone in the outside world it looks like a bank in that country.

For example, I have a USD account and a EUR account. Recently a US person deposited into my US account (you get a routing number, account # etc) then I can keep it there, convert it to EUR and hold it in my EUR account, or transfer from either one into my local bank account. If you keep it in TW, they send you a debit card you can also use to spend the money in there if you wish.
posted by vacapinta at 3:23 AM on June 12, 2020


vacapinta: How would you advise that a multi-currency account be utilized in my case assuming that my client is willing to use transferwise (which is not a given)?
posted by whitelotus at 3:50 AM on June 12, 2020


The person paying you knows nothing about Transferwise. They are just depositing in a local (to them) bank account.

This could be used for example for them to transfer money from their account to your account, all in USD. For them its not an international transfer.

Paypal should also accept this account as a USD account that sits in the US and pay you into that using USD. Transferwise actually uses a US bank (USWEST I think) and the account is just as valid as having an account in the US.

Those are some options. Hopefully that helps.
posted by vacapinta at 4:53 AM on June 12, 2020


Update: Client is unwilling to use transferwise. Also, they are not in the US but paying in USD.
posted by whitelotus at 5:14 AM on June 12, 2020


As far as I know, you can only withdraw from paypal to a bank account or a card

If I understand the TransferWise multi-currency account correctly, TransferWise partners with in-country banks to give TransferWise account holders a genuine bank account inside whatever country the currency is for. And if I'm reading PayPal's policies correctly, they allow PayPal account holders to attach US bank accounts to PayPal accounts, as well as bank accounts in their own countries of residence. So it seems to me that it ought to be possible to link the US-facing account numbers that come with a TransferWise multi-currency account to a PayPal account. Worth a try, anyway.
posted by flabdablet at 7:21 AM on June 12, 2020


flabdablet: It's unclear whether paypal will allow this loophole given that the transferwise account is a virtual account. I tried googling and it seems that some people have tried this but had trouble verifying the accounts with paypal.

Has anyone tried this recently with success?
posted by whitelotus at 8:09 AM on June 12, 2020


I'm in Australia. Just signed up with TransferWise, started a multi-currency account and got US bank details. PayPal is indeed being difficult about linking that US account to my PayPal account; when I try, I just get a message telling me to please try again. Will report back again after giving PayPal customer support a chance to fix this.
posted by flabdablet at 12:09 PM on June 12, 2020


flabdablet: Thank you for trying it out. I'll be curious if Paypal does sort it out for you. Paypal customer service is currently non-existent for me.
posted by whitelotus at 1:18 AM on June 13, 2020


Me also, alas. Will keep trying.
posted by flabdablet at 6:31 AM on June 13, 2020


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