
Saving money on international payments as a remote freelancer - 0verAchiever
https://blog.jurn.io/international-payments-freelancers/
======
Youden
FWIW, where possible, I advise having both a TransferWise account and a
Revolut or Interactive Brokers account.

TransferWise is fantastic for receiving money. They have __local __bank
accounts in USD, EUR, GBP, AUD, NZD and PLN. However for sending money and
converting money, their fees can really suck: for $10k USD - > EUR (EURUSD is
one of the most liquid forex pairs), they charge 81 USD in fees, or %0.8. Even
for local transfers (which should be free) they charge ~1 USD.

Revolut is kinda crap for receiving money (the only local accounts are EUR and
GBP, the rest are GB IBANs) but sending and conversion are both free
(conversion as long as the amount is <$6k/month). If you use it a lot, they
have a ~$100/yr plan that gives you unlimited on both.

Interactive Brokers is literally useless for sending and receiving money (they
only accept transactions to/from your own accounts) but they're fantastic for
conversion. They process your orders directly against the forex market and
charge ~1USD per trade for the kinds of trades we're talking about. The
downside is that their minimum account balance is pretty high (~$6k IIRC) and
they have a $10/month "inactivity" fee if your balance is below $100k and you
generate <$10/month in commissions. That said, if you need a brokerage account
anyway, their currency conversion is a great bonus.

And finally, Charles Schwab is great in the US. They charge minimal markup on
deposits and withdrawals in foreign currencies (~0.5-1% depending on amount)
and they have a debit visa card with no international transaction fees and
Visa's exchange rate (~0.3% spread). They're not the best around but they're
really great if you don't want to put your money in the hands of a less-
regulated FinTech company that has minimal deposit guarantees.

~~~
snappieT
The Interactive Brokers $10/month inactivity fee is (kinda) no more - they
have a new product called IBKR Lite that has no minimum balance or maintenance
fee, but still supports forex:
[https://www.interactivebrokers.com/en/index.php?f=45500](https://www.interactivebrokers.com/en/index.php?f=45500)

~~~
Youden
True, and if you're in the US that might be a good choice. IBKR Lite is
unfortunately US-only at the moment though.

------
briodf
Great post Jurn, thanks for participating in the effort against hidden
exchange rate markups.

If you want to check for yourself how much you could save with TransferWise
(or one of their competitors) vs banks or PayPal, we've built a comparison
site for international money transfer: www.monito.com which compares live
exchange rates and fees for any amount you'd like to transfer between two
countries/currencies (e.g. US-Euro [https://www.monito.com/send-money/united-
states/netherlands/...](https://www.monito.com/send-money/united-
states/netherlands/usd/eur))

Our initial goal was to help migrants save money when they support family back
home, but the tool can be used by businesses/freelancers/travellers as well.

Let me know if I can be of any help in the comments, we've become payment
geeks over the years!

~~~
wtmt
I wanted to provide you feedback as well as alert others reading these
comments. Your site doesn’t list anything other than Transferwise for
transfers from India to USA, even though options like InstaRem and others
exist. Based on this, I’m not sure how comprehensive your service is to
compare providers for cross border transfers. I see you have InstaRem and
others for some other currency combinations (including the inverse, sending
money from USA to India).

~~~
briodf
Thanks for your feedback. Monito.com strives to list as many options as
possible and be the most exhaustive source of information about international
money transfer fees worldwide. However, we're not always able to access all
data as no worldwide regulations require banks or money transfer services to
be transparent about their fees and exchange rates (yet).

That being said, in the case of money transfers from India to the USA:
InstaReM temporarily suspended money transfers from India last month. As soon
as this is re-activated, they will once again appear in our comparison table
on all supported corridors from India.

~~~
wtmt
Thanks for the prompt response with details. If I may bother you one more
time, do you have XE in your list of providers? It provides money transfers
for many currency pairs (probably not as broad as Transferwise or InstaRem).

~~~
briodf
Yes we do. For example, they're the only service we know offering digital
money transfers from Mexico to the US: [https://www.monito.com/send-
money/mexico/united-states/mxn/u...](https://www.monito.com/send-
money/mexico/united-states/mxn/usd)

------
throw0101a
For CAD-USD exchanges, _Norbert 's gambit_ is a popular procedure:

> _Here’s how you can use this ETF to exchange $10,000 Canadian:_

> _1\. Get a quote for DLR and calculate how many shares you can buy for
> $10,000 Canadian._

> _2\. Place an order for that number of shares. The trade will settle in
> Canadian dollars._

> _3\. Call your discount brokerage’s customer service desk and ask them to
> take your DLR shares and “journal them over” to the U.S. dollar side of your
> account, where they should show up as DLR.U._

> _4\. Place an order to sell all of your DLR.U shares. The trade will settle
> in U.S. dollars._

* [https://www.moneysense.ca/magazine-archive/norberts-gambit-a...](https://www.moneysense.ca/magazine-archive/norberts-gambit-a-better-way-to-buy-u-s-dollars/)

* [https://www.finiki.org/wiki/Norbert%27s_gambit](https://www.finiki.org/wiki/Norbert%27s_gambit)

* [https://canadiancouchpotato.com/2013/12/03/norberts-gambit-t...](https://canadiancouchpotato.com/2013/12/03/norberts-gambit-the-complete-guide/)

Technically this would work with any interlisted stock, though the DLR ETF is
very popular for this because of its liquidity. One could probably find stocks
for GBP and EUR as well:

* [https://www.tmxmoney.com/en/research/interlisted.html](https://www.tmxmoney.com/en/research/interlisted.html)

The overhead of the exchange is the cost of buying/selling the stock, which is
fixed price, so it it's not like a percentage cut.

~~~
jannes
Depending on where you live this could make your tax declaration more
complicated, which could require the services of a tax consultant if you don't
know how to do it yourself... Just something to keep in mind if you want to
save money.

------
emdowling
I’m a former TransferWise employee and I cannot speak more highly of them.
Yes, they aim to make money like every business, but I’ve never seen a company
so focused on transparency to customers. The CEO intensely interrogates
roadmaps from the customer perspective, and fairness to customers is non-
negotiable.

Their economy of scale enables them to offer increasingly lower fees, but I
can speak first hand to the pain felt by everyone at the company when costs
have to increase.

Anyway, I trust them far more than any bank and cannot recommend them more
highly both as a customer and workplace.

~~~
mft_
Are you able to offer any insight (top level, non-confidential, obvs) into how
TransferWise works, behind-the-scenes?

i.e. how do they actually enact the exchange of the funds? Do they have a
contract with one of the big investment banks? Do they work directly via Forex
markets? Can they leverage their scale now to minimise actual exchange costs –
for example internally matching up (say) a one customer transferring USD to
EUR, and another transferring EUR to USD, so that TW’s costs are minimised?

~~~
rvnx
In reality, internalised or not, TransferWise makes lot of money in fees. On
InteractiveBrokers for example, you pay +/\- 2.33 USD in total to convert
100'000 USD to EUR (+ 1 USD extra for withdrawal if you already did one this
month).

TransferWise charges end-user 900 USD + spread for the same operation, which
is rather comical when you see their ads "banks are scamming you"

~~~
Symbiote
> On InteractiveBrokers for example

That is not a consumer-friendly site. Is it even practical for the typical
case TransferWise targets: sending a few payments a year, or a few a month?

The pricing page for foreign exchange has the cheapest category as under $1
billion -- is transferring $200 something they'd do? I don't know what a
"basis point" is, or "trade value".

[https://www.interactivebrokers.com/en/index.php?f=4969](https://www.interactivebrokers.com/en/index.php?f=4969)

~~~
jkaplowitz
I'm not sure where in the provided link you found that, but I am not doubting
you found something FX-related in there with $1 billion as a relevant number,
since they serve lots of different professional populations.

But yes, they can exchange even a dollar or two. I've exchanged five figures a
few times there between CAD and USD, as an American living in Canada and
actively using a US credit card.

So far I've found them to be much more affordable than TransferWise, but
equally, they are a very complicated broker to use, and it may not be worth
the hassle just for FX. They have other benefits that make them worth the
tradeoff for me, like good margin interest rates and the ability to provide
tax forms complying with both the US and Canadian tax systems each year.

~~~
graton
Well this page says something about trading less than $1 billion per month:

[https://www.interactivebrokers.com/en/index.php?f=1590&p=fx](https://www.interactivebrokers.com/en/index.php?f=1590&p=fx)

~~~
jkaplowitz
Yeah, that's indeed the link that the other poster meant to share. See my
reply to their comment parallel to yours for more detailed thoughts and
numbers.

------
sambarina
I am surprised that there is no mention of Bitcoin. My current project is also
in another country (US) and I live in Europe. I am getting paid in BTC, and I
pay even less then via Transferwise.

It is cheaper because the company already owns Bitcoin, so it doesn't need to
buy them. What I do is:

\- Getting BTC transferred to a wallet at an exchange I trust \- Sell the BTC
ones I receive them and put the money on my bank account

I switch between using Transferwise and BTC. The downsides are obviously that
the price can fluctuate quite heavily. But my experience is that I saved a few
hundred Euros each year (around 450 Euros) from using BTC instead of
Transferwise.

That's not a lot in the grand scheme of things. What I like about a BTC
transaction is that I can monitor it, it is even more transparent then
Transferwise and I truly "own" the BTC ones sent.

It is a bit sad that I can't use it as much as I would like so I sell around
90% immediately to pay rent, buy stocks etc, and 10% stay there for future
gains.

~~~
cik
This has always been more of the dream of BTC than the reality. Transferring
BTC around can cost 0.1 - 0.4% which becomes quite expensive. The cost of a
wire transfer from Canada to the various countries I make them is a flat $36 -
though receiving fees can be as high as $15 (CAD). That means that BTC only
makes sense if you're transferring less than $5100.

But moreover, BTC back to fiat is significantly more expensive than
"expensive" currency exchange with usually levels as high as 3%

~~~
decentralised
The costs for transactions are not fixed to a percentage of the total amount
sent but on the size of the transaction and the network congestion.

Moving one billion USD worth of BTC can cost as little as 0.065 BTC or ~440
USD.

[https://www.independent.co.uk/life-style/gadgets-and-
tech/ne...](https://www.independent.co.uk/life-style/gadgets-and-
tech/news/bitcoin-mystery-trade-cryptocurrency-market-transaction-
blockchain-a9103611.html)

[https://www.blockchain.com/btc/tx/4410c8d14ff9f87ceeed1d65cb...](https://www.blockchain.com/btc/tx/4410c8d14ff9f87ceeed1d65cb58e7c7b2422b2d7529afc675208ce2ce09ed7d)

~~~
JumpCrisscross
> _Moving one billion USD worth of BTC can cost as little as 0.065 BTC or ~440
> USD_

Which is ridiculous, given anyone (legally) moving a billion dollars pays zero
for an instantaneous Fedwire.

~~~
decentralised
Not familiar with Fedwire. Surely it won't be free to move fiat via any
payment network.

Do you happen to have a source? PS: seems not to be available to retail
customers?

~~~
fennecfoxen
The "Fedwire Funds Service" is the Federal Reserve's wire transfer payment
system used to move USD. I'm actually writing an integration to it right this
moment (the old fixed-width format, not the new XML one, yay). Naturally this
interface is not available directly to retail customers, but if you actually
send a wire transfer from your bank, this is the system you will use.

Your bank will generally make this available to you through some online
interface. If not, you can visit the teller. They will likely charge you
$20-$40 to send a wire if you are a small account, but, even with something
like Chase's mid-level "Signature" checking (~$10-$20k minimum to avoid
monthly fees iirc) they will waive this fee. And, of course, if you're really
moving a billion, not only would you have a banking relationship where your
wire fees are waived, that fee would be peanuts anyway.

~~~
decentralised
Im in the EU and we don't have Fedwire here. I can tell you that ABN AMRO
charges me ~10 euros for transferring ~200 eur to the UK (with conversion to
GBP).

Generally speaking I'm quite familiar with payment infra in Europe, I've
worked on it for ~20 years after all.

~~~
fennecfoxen
I am not sure how to engage with this reply. It is of course unsurprising that
European banks do not have integrations with the Federal Reserve for moving
USD. European banks often have access to international systems like SWIFT and
SEPA, and various national payments systems, instead.

I have precious little information to offer you on the workings of European
funds transfer services, however; I posted here to discuss Fedwire
specifically, since you brought it up.

~~~
decentralised
Well, first of all thank you for your earlier comment.

My anxiety is peaking lately... I have no idea exactly why I answered like
that but what I meant was that while I'm not familiar with the US payment
system, I do know the European one quite well and that's why earlier I'd
expressed incredulity that any traditional banking system could offer zero
cost transfers. I think I didn't notice you were not JumpCrisscross

------
benkuhn
> Most of them are not classified as banks and run without banking licenses
> and governmental oversight. They are more convenient and cheaper but
> definitely a little riskier as well.

This is really misleading. (Disclosure: I work for a remittance provider.)

It's true that non-bank money service businesses do not operate as banks, but
it's totally false that they "run without... governmental oversight" or are "a
little riskier."

The level of government oversight of non-bank MSB's is extreme by the
standards of anything but banking. For example in the US, you have to apply to
each state government individually for a license to send transfers from that
state. It takes years and is extremely onerous. Many of our applications ran
into the hundreds of pages of paperwork and were followed by weeks of on-site
examinations plus an intensity of financial auditing usually reserved for
companies nearing IPO.

(In Europe the situation is better because MSB regulation happens at the EU
level. This regulatory difference is a big part of why Europe has a much
larger share of great fintech startups compared to other sectors.)

On risk, most regulators require money transmitters to insure their
liabilities to customers so that, if they ever collapse, the insurer will be
able to make their customers whole. In our case, we never have liabilities to
customers (because we pay out instantly) but we still have to buy this
insurance... kind of a belt-and-suspenders approach.

------
msadowski
I was looking into this when I started freelancing on UpWork. I found that the
best option for me was to have an US ACH account through TransferWise,
otherwise I was looking at either high transfer fees, currency conversion fees
or all of the above + a rate that is far off from the market rate.

With the current setup the only cost I have are the TransferWise fees for USD
to EUR conversion when I send the money to my local bank.

~~~
unnouinceput
You "lose" thousands of dollars per year on Upwork no matter what you do. But
this is a non-issue in the end, am I right? That's why I used quotation,
because I prefer having this loss on a high volume of work rather than work
for pennies in my country and saving transaction fees.

In the end I don't care about these fees, it's the world we're living in and I
prefer to have fun with my projects instead.

~~~
msadowski
Instead of "loss" I consider it a service price for discoverability and the
payment guarantees for hourly projects.

I also don't mind paying since so far it's been the best method to get
projects for me so far.

~~~
Ayesh
Yes, the 20% definitely raises eyebrows. Uber charges 20%< Booking.com 15%,
and Airbnb 5+10%, just to put a comparison.

I no longer use Upwork, and the "loss" is only one of the reasons. But it's
probably the best way to find projects easily though.

~~~
unnouinceput
Try going for long-term projects or creating relationship with your customers.
Once you charge them more then 10k USD the rate is ~6%, which is quite nice to
have 94 cents on a dollar. It's something Upwork actually encourages, opposite
for Fiverr as example

~~~
Ayesh
If you reach 10K in payments, it means there's a good level of trust between
two parties, at which point even the 5% charge is not necessary.

Their messaging and time tracking tools are mediocre at best, and they
certainly aren't worth the 5% charge. Payments are held for a week, and it
still costs money for the worker to withdraw them. Their local currency
withdraw is 2-3% lower than Transferwise.

~~~
unnouinceput
I have no problem using their messaging, it allows me and my clients to
exchange information and upload files too.

The tracking tools is just as it should be. I don't want a keylogger, so the
fact that they simply count keystrokes and mouse clicks is good enough to not
step too much into privacy zone.

Payments are held for a week in order to allow the paying customer to analyze
screenshots, and if necessary to allow for complaints to be filed.

As for local currency withdrawal, I'd say they don't make a dime on that one
at all. That's completely based on your local bank currency exchange rate,
which is always skewed for them to make a buck too. Also they have plenty of
different payment methods. And in the end it doesn't even matter.

Care to share any better online market for freelancers that you're happy with
instead Upwork?

------
lordnacho
I used to trade FX in my hedge fund, where of course we got interbank rates.
The spread would have 5 decimal places for something like EURUSD, so 1.12345
bid, 1.12346 offered, based on mixed prices from different brokers.

I was astonished when I tried to change some money in the retail market and
instead of the 5th decimal digit being different, it would be the 2nd.

Luckily these days there's several services that will give you something near
the same spread, close enough to not care to search for improvements. Revolut
does something like that, as does TW. I'm sure some of the other challenger
banks are doing this as well.

Another big bonus is they don't force you to change your money. This is a big
deal if you have an old bank like Barclays that will see your incoming USD and
change it to GBP, losing you several percent in the process. If you have
Revolut or TW you can actually just keep your USD, chances are there's
something you pay for in dollars.

------
hackathonguy
I see lots of praise for TransferWise here and I regret not trying them out
earlier.

For what it's worth, I can add my two cents regarding PayPal. From a customer
experience perspective, PayPal is pretty great - the UI is smooth and I like
being able to pay with my PayPal balance online.

Having said that, their fees are nothing short of exorbitant - for
international transfers, if I'm not mistaken, the fee is 4.4% + a fixed price
per transaction + 2.5% on top of that if you also want to exchange currencies.
A $1,000 bill paid to my PayPal account by a U.S.-based client can easily
become $930 or even less by the time it reaches my bank account. I've stopped
accepting payments via PayPal for that reason.

Furthermore - this isn't personal experience, just word on the street - I hear
PayPal Customer Service can be pretty atrocious to merchants, which is another
thing I'm not too happy about when it comes to their service.

~~~
ValentineC
PayPal's customer service is atrocious to consumers as well, especially if you
fall between the gaps and get asked to do some weird KYC.

Two months ago, they asked me to provide charity information for my personal
account, and subsequently limited my receiving/sending privileges.

Phone calls to them trying to sort this out have always ended up at some call
centre in the Philippines, where the agents can only tell their users that the
account limitation is "for their safety".

They've also limited the personal account of a friend of mine (who was
interestingly enough ex-PayPal) before, also asking for charity information.

------
adanto6840
Over the last year or so it seems like TransferWise has rapidly come onto the
scene & taken over much of the landscape for our international contractor
payments. The fees tend to be much lower than existing alternatives;
importantly, the administrative friction is incredibly low, too. We're able to
handle international payments essentially the exact same way we do with most
other vendor & contractor payments, via ACH transfers.

It's saved us a ton of time/hassle, even ignoring the fee savings (which have
been somewhat substantial for _most_ countries & currencies).

~~~
dzhiurgis
> Over the last year or so it seems like TransferWise has rapidly come onto
> the scene

They've also increased some of the fees over the last year

~~~
jeromegv
Depends on the currency. Mine has gone down.

------
mcsweena
If anyone is interested, CurrencyFair are another excellent way to save money
on international payments. Similar to Transferwise, you can send money fast
from one currency to another at the current exchange rate with far less fees
than a bank.

They also have a peer-to-peer element, where you can choose your own exchange
rate and wait for another customer (sending money in the opposite direction)
to accept that rate. If you are willing to wait a little longer to send your
money, you can get excellent value using this feature.

They currently have an excellent sign up offer at the moment that you can
access using my link:
[https://www.currencyfair.com/rafland/?channel=RMZIY1](https://www.currencyfair.com/rafland/?channel=RMZIY1)

(Disclaimer: I currently work there. I love the product and I know you will
too:))

~~~
snappieT
+1 on recommending CurrencyFair - I've found that their fees tend to be lower
than TransferWise and I've always had great service from them.

------
d--b
I've been using TransferWise since it started. It's just the best. Cheapest
fee by far, excellent support. No affiliation here: I'm just a happy customer.

~~~
lioeters
I second this. Been using TransferWise for a while (few years?), a very
satisfied customer.

Their onboarding and ease-of-use are phenomenal - even for senior people who
are not technically literate. I recommend it to friends, family, clients.

------
mkbkn
I've very high regards for TransferWise. Fastest and cheapest.

Meanwhile, Paypal is a frauster and should be mass-boycotted. So do Upwork.

~~~
fnordsensei
Is it though? I recently compared it to Revolut (during a series of large-ish
transfers), and TW turned out to be quite a bit more expensive, and no faster.

~~~
mkbkn
Revolut is not available to non-European and non-US citizens. I haven't tried
it.

------
jaeming
I just used TransferWise for the first time last night. I was legitimately
impressed with their well-designed UI/UX.

My bank doesn't even have an online interface for international wire
transfers, plus, their UI looks like something developed in coldfusion by an
ex-myspace engineer.

~~~
why-el
TransferWise customer for over 5 years now, they are the best in the market.

------
tchaffee
Based on my own experience doing international transfer over many years, the
article is pretty accurate. However there is another option, but it does have
more risk. Bitcoin. I'm not much of a fan of cryptocurrency in the first
place. But international money transfers with low fees is the first real use
that actually justifies Bitcoin for me. My credit union charges $20 for a wire
transfer. And the transaction fees of my Bitcoin exchange in my target country
are low. The risk is the one to two hour window that it takes to transfer the
Bitcoin. If prices suddenly drop in that time, I could be in trouble.

~~~
needle0
Are stablecoins viable in the real world for this kind of use case? Anyone
have any firsthand experience?

~~~
nanexcool
I live in Argentina and have been getting paid in Dai (stablecoin on Ethereum)
for over 2 years.

[https://www.youtube.com/watch?v=hHji4x5C1q0](https://www.youtube.com/watch?v=hHji4x5C1q0)

------
ashleysmithgpu
Just to add a dissenting voice to the conversation, I recently attempted to
transfer some money with transferwise and they refused just after I had
uploaded all of my ID etc. In the end I went with worldremit and they were
much easier to deal with. Slightly more expensive but I'd choose that over the
hassle of tw.

~~~
newsbinator
To add another voice, I spent several weeks in Bulgaria unable to use my
Transferwise "borderless" card in any shops (including all the major ones,
like Lidl and DM).

The first few times Transferwise insisted it's a broken card reader, then a
few calls and emails later it became the merchant's terminal that's at fault.

On some of the calls, Transferwise simply hung up on me when I didn't take
"you should try it again" for an answer.

Finally after escalation it became the terminal's providing bank, which didn't
recognize my Transferwise card number (issued in New Zealand).

Meanwhile other people used their Transferwise cards at the same locations
mine failed. So I requested a European version of my Transferwise card but TW
insisted that would break their contract with Mastercard or something.

3 or 4 weeks later, after I had already left Bulgaria, they emailed to update
that my card would now be working.

Needless to say, I always travel with more than 1 provider's card with me, and
this runaround from Transferwise is why.

~~~
shavingspiders
Interesting, I had a similar issue with my NZ-issued TransferWise card,
however it resolved itself in a few days. This was in Dubai airport & then
across a few merchants in the UK, though.

------
toptal
We at Toptal initially created TopTracker payments (we don't monetize on this
product at all) to be the lowest form of payments for freelancers globally by
partnering with Payoneer. Essentially, it's a fixed 2% transfer cost including
FX, however TransferWise is often able to beat that.

We, and I'm sure other companies, would love to partner with TransferWise,
however they've yet to create API's that allows for a product to work with
their system effectively. Once they do so, this will be a game changer for
doing payroll globally.

~~~
jddj
Really?

A lot (most?) of the fintechs in the UK/EU seem to use TransferWise under the
covers for their foreign currency exchange, and while I haven't used the api
itself yet I have skimmed the docs for it and they seem detailed enough.

They (intentionally, afaict) don't provide a checkout flow, but there's still
a lot there.

~~~
toptal
For doing payroll like transfers, especially with strong compliance, there's a
lot of under the hood functionality required. Payoneer has spent over a decade
creating this, while TransferWise still has a long ways to go.

------
ucha
Transferwise is cheap but Revolut is free. I pay the mid-market rate and no
markup unless I want to convert currency on weekends. There is a 6000€
conversion limit that can be lifted for 8€/month.

------
blago
I had a horrible experience with TransferWise. They silently canceled my
account for suspected fraud after I'd sent my first transfer. No call, no
emails, no questions. I didn't find out until days later when I went to check
why my money hasn't been received yet - I was unable to login.

------
EastSmith
I am receiving SWIFT payments each months in EU as a commercial entity. I am
invoicing in USD, providing a bank account number, where the money I receive
are automatically converted to the local currency (not EUR).

Just checked the exchange rate on TransferWise and it seems it is way better
than any bank exchange rate in my country (not EUR).

So, what I am concerned about right now is taxes. It seems I can create an USD
bank account in US on the name of my company for free. Then I can invoice my
customers in USD (as I currently do) and tell them to pay the invoice to the
US bank account in TransferWise. Then I transfer the USD to my local bank
account (in local currency, using TransferWise exchange rate). So far so good.

But what about my USD bank account in US - wouldn't I need to pay taxes for my
USD income in a US bank account?

~~~
charlesdm
Depends on the tax and accounting laws of your country, but generally the
taxable event happens when you invoice.

So I'm doing accounting in EUR and invoice 10,000 USD. For accounting purposes
my 10,000 USD gets converted to EUR on the invoice date, at the ECB USDEUR
exchange rate.

Then you hold that 10,000 USD for 2 months in your USD account, and the USDEUR
exchange rate has dropped or increased 10% in that period. When you then
exchange the USD into EUR, you'll generally pay tax on the exchange difference
(= capital gain)

My Belgian bank accounts are all multi currency. I can hold, receive and send
USD/EUR (and others if I wanted to).

~~~
EastSmith
Thanks, the exchange difference indeed looks like capital gain.

------
dmos62
Depending on your situation (regulation and logistics), cryptocurrencies can
be a good way to move money internationaly. I've used Bisq for that with
success, though it's more involved than a simple KYC crypto exchange or the
(usually costlier, right?) traditional banking methods.

------
sebastianconcpt
From Brazil, I've used TransferWise until it became _way_ more expensive than
my regular bank to receive wire transfers.

------
eckesicle
My wife runs a small research startup in the UK and their clients are almost
exclusively based in the developing world (ranging from the likes of Kenya to
South Sudan and Myanmar).

They are having difficulties receiving payments from many clients because: *
They're a small company so many traditional banks aren't interested in banking
them because they perceive risk to be too high (I guess from an AML
standpoint?) * TW does not support receiving funds from these countries.

There just doesn't seem to exist a reliable way to receive money from many of
these countries. Does anyone know of a solution or bank that offers this kind
of service?

------
vijaybritto
His suggestions: 1\. use transferwise.com 2\. Open foreign currency account in
your bank

------
nedsma
Using the opportunity to pressure TW to expand into more markets. Why only
focus on the EEA countries? Come on, expand onto whole Europe/world, if
Payoneer/Skrill can do it, you can too.

Edit: make debit cards available anywhere.

~~~
nilanp
Coverage is pretty comprehensive
[https://transferwise.com/](https://transferwise.com/) available in 59
countries (see half way down the home page)

The borderless bank account seems available in a ton of countires too -
[https://transferwise.com/gb/borderless/](https://transferwise.com/gb/borderless/)

------
stared
As a freelancer often working remotely: I have a great experience with Revolut
Business.

From time to time I used TransferWise, and I am happy with the service.
However, it is a transfer, not an account. For some contracts (universities in
various places) a bank account is a must, so to fulfill local procedures.
Revolut Business works like a bank account (including SWIFT transfer) with
seamless exchanges between accounts. I created an account specifically to be
paid in SGD (Singaporean dollar). If I used my "normal" bank account, the
charges would be enormous (effective ~10%).

~~~
arulpugazh
Transferwise now also provides a bank account with a proper IBAN and a Master
card. I have been receiving my salary for the past six months in this account
without issues. From last month, they also added Direct Debits feature. The
only annoyance is that I can't use the Master card in many shops in Belgium
because they only work with Bancontact cards.

~~~
stared
Thank you for the update.

Last year it was not possible (and took me some time to discover that).

------
shoo
If you have an online brokerage account, it can be possible to use that to
exchange currency directly on the market, with the market exchange rate and
very low fees. Obviously that isn't a one-step solution for clients paying
you, but it can work very well if you have money in bank accounts in different
countries, and they both integrate with your brokerage account in a low-fee
way.

~~~
eternauta3k
But how do you transfer between countries? The fees for wiring money or
securities with brokers are higher than normal Bank transfers, at least where
I live

------
ransom1538
FYI American worker: When an international employee makes $40 per hour and
they perform two weeks of work -- their US employer sends them 80 * 40 =
$3200. No Federal Income Tax Withholding, no Social Security and Medicare
deductions, no Federal Unemployment (FUTA) Tax, no State withholdings,
nothing. Employers love it. No drama.

Just straight gross cash.

~~~
puszczyk
Well, they likely need to pay income tax and social insurance in their own
country. The burden has just been shifted to them.

To be fair, I’m not 100% sure how this works in the US, in PL where I’m from
and probably in all of the EU countries if you are on a job contract then the
employer pays the taxes and social insurance for you. If you are self-employed
/ freelance you have a business registered in your name and it’s your
responsibility.

Either way, I don’t see how the taxman’s cut disappears. Also lot of countries
have higher taxes + social insurance than the US.

If you really want to make a case, you can say that the contractors from a
low-cost-of-living countries may undercut American workers (but then, if they
work remotely I think they mostly undercut the office jobs, not “workers”)
because they ask less money for the same.

~~~
adanto6840
Works pretty much the same in the US, too.

When we pay US contract labor, we generally send the "gross cash amount". The
US contractor actually has to fill out a form upon commencement that says how
their taxes & social insurance will be paid; at the end of the year they get a
form from the businesses they did work for which shows total paid, and they
use that to do their taxes.

Same thing for international contractors -- they just have to deal with their
local jurisdiction's taxes, instead of the US IRS.

------
thomseddon
Recent TransferWise horror story of a public company, processing millions, who
had their account suddenly shutdown:
[https://blog.simwood.com/2020/03/emergency-bank-details-
chan...](https://blog.simwood.com/2020/03/emergency-bank-details-change/)

~~~
solarengineer
The TransferWise Acceptable Use Policy dated 24 July 2019 doesn’t allow VOIP
business to use TW. The blog post from SimWood is from 19th March 2020.

I’ll leave it to TW to explain when they changed their AUP, how come SimWood s
was able to use them later, and also for SimWood to explain how come they
didn’t track the AUP changes at TW, and instead felt the account closure to be
sudden.

------
sealthedeal
I am the CEO of Routefusion (routefusion.co). While we don't handle individual
international freelancer payments, we have the most comprehensive API for
companies to send cross-border/international payments to contractors, or SMBs,
etc. Based on my experience, here are some recommendations for whom I would
use in no particular order.

Deel (letsdeel.com): They are an amazing option for paying and hiring
freelancers/remote employees. They have a great feature where you can sign up
as an individual contractor. They shine on their simplicity of onboarding and
scheduling. They also offer a free consultation if you have tax questions etc.

Transferwise: They are great. If you are making individual payments you cannot
go wrong. I wouldn't want to operate my payroll off of them, but they are
great for one-off payments. (I used them to send payments to Italy for my
wedding)

Pilot (pilot.co): Pilot makes it ridiculously easy to pay your international
team members. They handle payroll, benefits, and compliance for international
employees and contractors. They have some great tech behind their products,
utilizing integrations like Plaid to get you up and running fast, they also
beat TW in currency pricing all day.

Rippling (rippling.com) They have a great HR product and domestic payroll
solution. They have recently launched an international payroll solution and it
is just a great as their domestic.

Payoneer: Payoneer has been the industry standard for quite some time. I think
the only downside is they are expensive (exchange rates are not competitive).
Still would be a great option, but would not be my first option.

If you have any questions about moving money internationally, I would love to
chat with you and answer them. Whether is helps Routefusion or not, more than
happy to spread knowledge! :)

founders@routefusion.co
[https://www.linkedin.com/in/coltonseal/](https://www.linkedin.com/in/coltonseal/)

~~~
notdang
I think you are missing the main point why so many prefer Payoneer. It's not
about the fees, it's about having a card in a different country that your
fiscal residency country.

~~~
sealthedeal
Makes sense. They are a great company, so I imagine customers have lots of
reasons for using them.

------
nurettin
> As a remote freelancer you likely receive payments from other countries and
> convert these different currencies into your own currency

I do, but only when I really need to, because my country's money isn't worth
the nickel it is imprinted on and devaluates all the time, so I'd rather keep
my savings at $$.

------
mariopt
I’ve been I’ve been using TransferWise and Revolut for GBP to Euro and vice-
versa.

Revolut is the cheapest one and I can not understand the 50 euros charge as
the exchange rate is super low.

Just checked my Revolt and 1000 USF to EUR is 1090,84, in google the exchange
rate would bring me 1091,20. I don’t get your 50 euros difference.

------
ghoul2
Tangentially related: is there any payment gateway that allows one to accept
international payments (for SAAS) paid out to transferwise accounts? I know
paypal doesn't connect with TW. Is there any other gateway that does?
Especially for Freelancers (not operating as a business).

------
ss3000
For travel, is there any benefit to using TransferWise's debit card over a
traditional debit/credit card that advertises 0 foreign transaction fees?

I remember somewhere about how the conversion rates are dictated by
Visa/Mastercard on most credit/debit cards. Wondering how those rates compare
to TransferWise's, and if their extra fee on top is justified.

Some examples:
[https://www.schwab.com/checking](https://www.schwab.com/checking)
[https://creditcards.chase.com/rewards-credit-
cards/sapphire/...](https://creditcards.chase.com/rewards-credit-
cards/sapphire/preferred)

~~~
fpoling
In Norway when a bank advertises 0 transaction fees they skip roughly 1.8%
that Visa charges for doing currency exchanges.

~~~
hocuspocus
Visa doesn't charge this fee, it's your bank.

------
rchowe
What is the secret sauce to TransferWise? Are banks greedy, or do they have
access to an exchange market that nobody else does? I've avoided them because
whenever I look up wire transfer fees I get their SEO'd blog posts, but it
seems from this thread that they have a legitimately good product.

I use a local bank account for incoming wires so that, if there is a problem,
I can go down to the bank and talk to someone in person instead of being
subject to the customer service whims of a tech startup. For me, that's worth
the $10/transfer fee (though I bill in USD so I don't see forex or origination
fees).

~~~
PaulDavisThe1st
The secret sauce is that TW doesn't actually do currency exchange.

They have their own pools of different currencies, and receive/disburse
into/from those pools rather than selling/buying.

So if you send $100 to someone who will receive EU, TW doesn't actually change
$100 into EU; they credit your $100 to their dollar pool, and pay the
recipient from their EU pool. As long as the pool sizes remain well matched
with the inflow/outflow in that currency, TW isn't actually having to deal
with any currency conversion at all.

This is simultaneously similar to and utterly different from what banks have
done for international transfers. The difference is that TW is free to take on
the risk of the rates changing because the risk is reduced substantively.

~~~
rchowe
That's really interesting!

They only support disbursements in six currencies (AUD, EUR, GBP, NZD, PLN,
and USD), but they can accept eighteen currencies; presumably because they
already have a large balance of those and they are relatively stable -- the
one question mark for me would be PLN, but I would guess that it might be an
important remote work market.

It seems the main difference is the lack of a requirement for an intermediate
bank or banks; even a large international bank like HSBC might have to go
through a third party for currency conversion in certain circumstances. It
seems a lot easier if you are only making increases / decreases to your own
balance sheet (cut out the middle man, no settlement requirements, etc).

Presumably you issue bonds to get the to do this with, which is relatively
safe because it stays as cash and you know your churn rate. Does TransferWise
have any levers they can pull besides halting disbursements in a given
currency if there is a sudden devaluation, e.g. Poland goes bankrupt and PLN
goes to zero?

------
TheOtherHobbes
I used TW for a real estate purchase. It was fine, although I sent the money
in stages, because money-in-transit is not covered by any deposit protection
scheme.

My understanding is this applies to all of the services operating in this
space, not just TW.

But the suggestion that banks are more expensive is not necessarily correct.
My new bank charges nothing at all for IBAN transfers to my old bank in
another country. Money usually arrives next day, or sometimes same day if sent
early enough. The exchange rate seems to be the interbank rate and not a
consumer rate, so it's all very simple and cheap.

------
jonathanstrange
Reminds me of the Kagi cheques I used to get via snail mail. Once I had a
cheque of around 160 USD and got back less than half of it from my former
bank, the Berliner Sparkasse. I went to the local branch and they kindly
explained to me that every institution "in between" the "billing chain" for
foreign cheques can siphon off an almost arbitrary transaction fee. I still
think that was fraud.

Anyway, I opened an account at a US bank with branches in Germany and it cost
me only the usual fee (which was still high, though). Nowadays I'm using
Fastspring.

------
0xfaded
I use TransferWise for me as a private person. However, For my company I
recently needed to pay a USD invoice ~$3.000 to a vendor who couldn't accept a
credit card.

I looked into setting up TransferWise for my company, but half way through the
validation process I decided to check what my bank charged. ~$30 with the
actual exchange rate, compared to about ~$14 for Transferwise.

I applaud TransferWise for taking it to the banks, but saving ~$16 on the
occasional international transaction for me isn't worth explaining to my
accountant a random debit from my account.

~~~
sho
> ~$30 with the actual exchange rate, compared to about ~$14 for Transferwise

I have never seen this (TW user here too!) and I transfer money pretty often.
Are you sure the exchange rate was the same? Because that's how they get you -
a fairly minimal charge (your $30, or often "free") but then pad out the
exchange rate in their favour, sometimes up to 5%(!)

Or maybe you just have a really excellent bank. None of mine even come close.
Hell, I've used TW to move between currencies _in the same bank account_
because of the clip the fuckers wanted for the privilege of moving some
numbers from column A to column B.

~~~
eternauta3k
> I've used TW to move between currencies in the same bank account

How do you do this? Last I tried, TW didn't let me choose currencies (it used
the default currency for the source/destination country)

~~~
sho
It was SGD to USD and you're able to use SWIFT to any country for USD (so I
just pointed it at the same Singapore bank). It was slightly more expensive
but still less than DBS was going to charge.

It would definitely be nice if they opened that up a bit, plenty of countries
these days can do multi-currencies.

------
danohuiginn
There are also accounting advantages to having fees explicitly charged, rather
than baked into exchange rates. An explicit fee is something I can easily
state as an expense for tax purposes.

------
emilfihlman
At least in Europe, SEPA payments are visible abroad the next day (at least
according to my experience from transferring to Germany and London from
Finland), so that's not too slow.

~~~
fauigerzigerk
Where "next day" can mean 4 days later if you initiate the transfer on a
Friday afternoon.

------
carlob
I have an account with an Italian bank that offers multicurrency accounts
(EUR, USD, CHF, GBP + others not activated by default). If I change 1000 EUR
to USD now I get 1089.90 USD, if I try to change 1089.90 USD to EUR I get
993.80 EUR, so it seems the spread is less than 10 base points, which seems to
be pretty much in line with Transferwise.

Also, given that I actually have a part of my account in USD that means I can
wait and change money when I need it rather than when I invoice.

------
dzhiurgis
Interactive Brokers have quite low fx fees and ability to fund/withdraw in
many currencies. Problem is it takes a while a to open an account and to clear
funds.

------
sysashi
I came to the same conclusion (I use Upwork -> TW -> My local bank, instead of
Upwork -> local bank, because even with lower transfer amounts upwork's rate
is so bad)

Although I've noticed an increase in fees over the year or so with TW,
especially now. Next time I'm withdrawing from upwork I'm gonna compare
rate/fees and check whether TW gives me better outcome. (I feel it might be
not true anymore)

------
kinnth
We've been doing this for 3 years and we sit within EUR, GBP and USD. Rather
than doing immediate conversion I sit and wait for various rates to become
profitable, im happy being in any of the 3 currencies and so usually oscillate
between USD and GBP which has been very profitable in the last year making
around 10% net over 3 transactions. Can highly recommend TransferWise.

------
nabeards
I tried to use TW to transfer from a client’s UK bank account that was in USD,
to my US bank account also in USD. I couldn’t find a way to choose this in the
estimator, so I contacted tech support. They replied that this was a scenario
they didn’t cover. I continue to get regular wires between the accounts, costs
$25 in Interbank and my place charges an additional $10. ):

~~~
vasco
Might be cheaper for you to open a EUR account somewhere with low fees and do
2x transferwise than paying $35 per transfer

~~~
nabeards
TW support told me they just don’t support an account in another country that
isn’t in that country’s native currency. Which seemed odd. This was about a
year ago.

------
modamilk
TransferWise highly recommended. If you spend/receive money in multiple
currencies, you can also track your money with Lunch Money app. Jen, founder
was on the indie hackers podcast. I'm not affiliated with either service and i
haven't used lunch money. I have had great experience using TransferWise for
international payments

------
yourapostasy
I have overseas clients whose accounts payables are completely inflexible and
insist upon mailing me paper checks. I’m using a forex broker at the moment
who gets me mid-market plus about 1.2% to convert into USD.

Does anyone have a better way to receive paper checks that doesn’t involve me
establishing a bank account in the sending nation?

------
wprapido
A happy TW customer here, too. Had my card skimmed in Thailand. All money
recovered without much hassle.

------
samdung
An online payment of USD 150 generates USD 14 for the middlemen. Source:
[https://docs.sendwithses.com/random-stuff/enemy-at-the-
billi...](https://docs.sendwithses.com/random-stuff/enemy-at-the-billing-
gates)

------
fpoling
TransferWise rocks. I save about 16 Euro on a transfer of 500 euros to Spanish
bank from Norwegian krones. And it works within seconds. The saving comes
mostly from fees that the Spanish bank charges to receive international
payments.

------
dnh44
I've been using CurrencyFair for over a decade and they've always been great.

------
underthensun
I find TW amazing but it doesn't ship debit card to my country (due to my over
complex government's legislation). Does anyone knows a bank (can be a fintech)
that allows me to open an account all online?

~~~
livre
Argentina? People have been recommending Payoneer (not a bank) or Dukascopy
(online bank). As far as I know Payoneer still ships cards, I'm not sure about
Dukascopy. You can open an account 100% online with both of them.

~~~
underthensun
Thanks for your answer! The country is Brazil. Payoneer - fails to meet my
needs because there's no direct way to deposit through a bank, even it's my
own bank account. Ask someone else to deposit (by the billing service) every
time I need is inviable. And it charges 1-3% per deposit by the costumer. So,
I would end up paying that per deposit. Also, it’s too hacky. Dukascopy – I’m
researching this one, you give the best answer so far. Allow non-residents to
open an account, some fees nonexistent (monthly, annually or inactivity),
doesn’t seem to be bureaucratic, the support seems good (even one for my
native language is available), ship the card to my country, the bank seems
really solid. Sounds really good. I’m finishing my review, looking for good
and bad experiences of current uses and possible hidden fees. If you have
anything to say about this bank, please, let me know too. :)

~~~
livre
Sorry for replying a bit late, I'm new here and not getting notifications for
replies is something I'm not used to. We have a similar problem with Payoneer,
so many restrictions that it's very difficult to deposit to our banks so
people go to Uruguay and use their ATMs to get cash or alternatively they use
the Payoneer card to buy things. Unfortunately I have zero experience with
Dukascopy, if you have a Reddit account you can try asking in /r/Argentina or
/r/merval, some people there have accounts with that bank.

~~~
underthensun
Yeah, the lack of notifications of hacker new is unsual. I did alot of
research on Dukascopy, including on reddit. It seems that bank really fit my
needs. Thank you very much for that suggestion.

------
polm23
I live in Japan and first heard of TransferWise from a friend moving to the
States, but since I became a contractor last year most of my international
clients use it, and it's always just worked.

------
qwerty456127
Just use crypto.

------
ska
sometimes you will do better with a wire and access to your banks trading desk
( _not_ retail exchange. Assumes you can hold an account in senders currency ,
but worth checking.

------
ilrwbwrkhv
Just use remitly. The best rates I have found so far.

------
igauravsehrawat
Transferwise is great.

One feature, I liked was Exchange rates alerts.

------
Nux
+1 Transferwise, great service! Happy customer.

~~~
nikatyet
+1 to Transferwise. I'm a happy customer too!)

------
kumarski
tldr: guy compares stuff, says use transferwise.

~~~
tradertef
.. and shares his affiliate link to transferwise at the end.

------
brudgers
There is a simpler solution. Charge more money for your freelance work. Higher
fees compound. Cost savings diminish. Even better higher fees select for
better clients. Working for clients where profits depend on your cost savings
is a race to the bottom. And when clients pay more you can afford to outsource
the work of setting up cost savings processes instead of doing the work
yourself. There's nothing wrong with saving money, but that's not the purpose
of a business.

~~~
fierarul
Yes, easy, just charge more! I wonder why doesn't everybody just do it?
Because it's non-trivial, it involves risk and you might end up making _less_
money!

While cost saving has almost no risk. Here's a relevant piece of the article:

> But what if it's a 6-month project and instead of billing them 1000 per
> month, you are billing them 10.000 per month?

> Now you could have saved €150 per month for 6 months, meaning you lost €900
> just on currency conversion on this project. Ouch!

> It could very well be that you can buy a brand new MacBook Pro every few
> years with just the savings on your international payments.

A business is also not good if you just let money slip through your fingers.

~~~
brudgers
Charging more is harder than shopping for ways to save money and less
pleasurable than dreaming of new MacBooks. Yes there is risk. Mostly of
rejection. And rejection is painful and saving money sounds like what a
responsible adult does and charging more just because you can doesn’t come
with universal social approval. Your clients know this if they are hard
negotiating on fees they are using that knowledge to their advantage.

The premise of the scenario is the freelancer is absorbing the risks of
currency exchange. The client is not compensating the freelancer for the
currency risk. The only way the freelancer gets compensated is by charging
more or placing the risk on the client by requiring payment in the
freelancer’s local currency. Neither creates a dependency on a third party,
their API’s, business model, or terms of service. All of those are a
distraction from doing the things that are the basis of the business.

~~~
fierarul
> charging more just because you can

You can _try_ to charge more, but it's rarely obvious you will receive that
extra money.

Currency risk is a cost of doing exports. Of course, sometimes it's also
advantageous if your local currency is devaluing against the customer's
currency.

