A Brief Guide To Getting Paid Online
Photo by wajakemek
This is a brief guide to one of the most common questions that we’re always asked:
“How do clients pay you?”
The tools and tips below are based on personal experience only - and I appreciate that many of you will have your own tips, good & bad experiences and learnings to add to the conversation, so please do add them in the comments!
Range of tools:
There are the usual suspects such as Paypal, Google Checkout, 2Checkout.com or Online Banking services. Key considerations to keep in mind when deciding on which option(s) is the most suitable include:
- Security
- Ease of set-up
- Ease of use
- Overseas access
- Fees for transactions
- Compatibility and integration with existing bank accounts
- Facilities and options available to customers & clients
What we do: We use a combination of Paypal and online banking which has so far worked out fine for the past year of travelling and 2-3 years prior to that.
What about cheques (checks)?
A very valid concern for many small businesses is the ability to be able to accept physical cheques from customers. An option to consider is to ask a friend or relative to do this for you, or hire an assistant to manage this.
In order to set this up, you will need to organise the following prior to your departure:
- A mailing address to which customers can send their cheques - either hire a mailbox or agree with your “willing assistant” to be able to give their address out.
- A willing assistant who will collect and collate cheques regularly.
- Paying in books with which your assistant can visit the bank to pay cheques in for you.
What we do: We use the husband’s parents’ address as our UK mailing address and have clients send cheques there - which are then usually paid in once a week for us. This is typically the last option we give to clients and direct them instead to pay by Paypal or make direct bank transfers.
What currency to use?
You have a few options here:
- Work in the currency of your home country
- Work in the currency of your ‘host’ country
- Work in the currency of your clients’ country
If you service clients from different countries, then it makes sense to charge your services out using either the currency of your home country or that of your ‘host’ country where you’ll be spending your earnings. Whilst it can be a matter of preference, it’s also worth considering the stability and value of the currency you work in and where you do your banking - this may help avoid unnecessary charges when working in multiple currencies.
In important point to note here is that unless you arrange a working visa for the countries you visit, it’s unlikely you’ll be allowed to work and service clients from within your host country.
What we do: We price and charge all our services in GBP (as that’s where we currently bank). We provide approximate equivalents for clients in different countries but make it clear that they will be charged in GBP. Typically either Paypal or the bank services then make the conversion from other currencies to GBP for each transaction.
Online Banking
One important service to set up before you depart is an online banking facility. Ideally your current bank has this service but if not and you need to find a suitable bank, then consider asking about the following:
- Additional charges - some banks charge hefty fees for using services such as online banking; check these out before signing up.
- Range of standard transactions available online - some banks allow you to complete the full range of transactions online whilst others will require a phone call or even worse, a visit to the branch.
- Ease of requesting non-standard transactions - as above, for non-standard transactions some banks will require you to visit a branch or jump through several hoops before you can complete a transaction such as requesting a copy statement or a bank referral letter.
What we do: I currently use an online bank in the UK (Smile) and the husband uses HSBC. As my bank is an online bank only (i.e. there are no branches to visit), the range of transactions and requests I can complete, in comparison to HSBC, is far greater and even non-standard requests usually just require a secure message. We are however in the process of setting up an offshore bank for tax purposes - but this will have online banking facilities.
Practices to Help You Stay Secure:
One of the key concerns with managing your money remotely or online is of course, security. Here are some tips to stay secure…
- As ever, never click on links in emails purporting to be from your bank to access your account - instead always open up a new browser tab/window and type in the url.
- Don’t keep your security details anywhere except in your head!
- Avoid logging into your bank accounts on public computers in internet cafes - instead always try and use your own laptop.
- Be careful when checking your online bank using unsecured wireless networks.
- When travelling and checking your details, just be aware of who is around you and who is able to see your screen and what you’re typing.
In Summary…
A key consideration for deciding on how to get clients to pay you when you work from multiple places is this:
What is the simplest method for your clients?
If your clients typically come from one geographic location (or your home town) and mailing a cheque is easiest for them, then it is probably a sensible consideration to set up a process that allows them to do this (as above).
If however your clients are worldwide as ours are (we currently have clients in the UK, US, Grenada, Dubai and Australia), then your options may be a little more flexible.
The key to deciding and implementing the most effective methods for you, is to leave yourself enough time before your departure to test out your processes and methods in advance. Don’t leave it until the last minute!
I’m sure many of you have your own tips and experiences to share, so do leave them in the comments…
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Comments
As usual, you bring up lots of relevant issues! So far I have only one client who pays via paypal–individuals seem more willing to do this than big companies; the rest send paper checks to my parents’ house in the States, and they are thankfully willing to deposit them for me once a week or so. How do you handle the fees that PayPal charges? Do you build them into the amount you charge, or swallow that expense?
@Neil - we work on a very simple payment rule…depending upon the service either 50% payment upfront and 50% on completion, or 100% upfront. I know many people struggle to consider how to implement this, but if you’re clear and strict on your terms of business, clients will respect that. As far as the legal rights go - our company is incorporated overseas and so any of our T&Cs are under their jurisdiction - I doubt that means much though as they are pretty lenient and unless we’re talking about a massive amount that goes unpaid, we would be unlikely to sue - with it just not being worth our time nor energy. The payment in advance thing really helps mitigate that risk though…
@Amy - you’re right, solopreneurs and smaller businesses are far more willing to pay by Paypal than larger companies. For larger corporates, we usually request a direct bank transfer/BACs payment. Re. the paypal fees, I typically just accept/absorb them but for larger amounts (anything over £1k/$2k) I usually prefer a direct bank transfer. Some people do build the Paypal charges into their fees though - although I think that’s only fair if you are giving clients other options to pay you, that don’t cost extra.
Folks in the US should consider USAA for their bank, if they qualify. They have a service called “Deposit@Home” where you can deposit paper checks by just scanning them in while on their website (it’s a Java applet).
hi Lea, I would love to hear about your experiences with setting up an offshore bank account. Can you do an article on it as soon as you are ready? I think this would be really valuable for those who want and are on the move.
Thanks
@Guy - yes absolutely, will add that to my list of articles…it’ll be an interesting one - we tried & failed miserably in Panama so have decided on one somewhere else!
ha Panama, yes I did wonder about that. Thank you for sharing that.
Best wishes and I look forward to reading more. Thank you.
Guy
Do you have any tips on term and conditions for payment? My current T & C s are under English law, and I doubt they would stand up to a court of law outside of the UK