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Monday, March 11, 2013

Low-Cost Solution Arrives for International Payments to Translators

Cross-border payments create challenges for language service providers (LSPs) as well as the freelance community. Beyond simple payment terms, when an agency decides to work with a translator in a different country, the linguist has to agree to a preset payment currency, payment method, and bank transfer fees that are often to their disadvantage.

The default payment method is usually a bank wire, but freelancers get particularly frustrated when they see their hard-earned paycheck reduced by the bank fees and high exchange-rate conversions. Linguists have been pushing for payment methods such as PayPal or Skrill (formerly called MoneyBookers). A newcomer to the e-payment business is likely to create some waves in the accounting departments of LSPs: TranslatorPay promises a solution that’s cost-effective for LSPs and freelancers alike.

Paul Sulzberger and Neil Hamlin partnered to bring this service to the translation industry. Hamlin is a chartered accountant and managing director of Money Move IT, a New Zealand company focused on easy money transfers across counties. Sulzberger brings years of experience at LSPs where he witnessed first-hand the difficulties with international money transfers. “Translators are increasingly dependent on finding work abroad. Banking fees and foreign-exchange rates are a disincentive for them to work with foreign clients,” said Sulzberger. TranslatorPay’s solution uses its big brother’s platform, Money Move IT, to transfer small sums of money without high fees.

The process is simple. The linguist registers at TranslatorPay at no cost. When an LSP is ready to pay, it searches for the vendor in TranslatorPay and schedules a payment. The service offers immediate quotes on exchange rates, so the LSP selects the best rate and wires the payment to a domestic TranslatorPay bank account. TranslatorPay takes it from there and uses SWIFT payment methods to wire the money into the linguist’s bank account in the local currency without any sending or receiving fees to most countries. TranslatorPay earns revenue from a small cut of the exchange rate.

We expect freelancers to take to this new service because they’ll be able to get faster payments, favorable exchange rates, and no transfer fees would be deducted from their payment whatsoever. LSPs will like it because they can batch process vendor payments without having to figure out which method is most cost-effective for the freelancer.

As of today, TranslatorPay supports payments out of the Euro zone, Australia, Canada, Fiji, New Zealand, Switzerland, Sweden, and the United Kingdom to any destination in the world. Hamlin hopes to add more countries that LSPs can send money from. He would like to add the U.S. in particular, but the service is subject to regulatory approval in each country.

TranslatorPay’s goal is to get a couple hundred LSPs to regularly use the system by the end of this year. Sulzberger and Hamlin hope that freelancers will encourage LSPs to get on board with the system. Accounting departments of LSPs are likely to embrace the option as a cost-saving measure and a way to keep freelancers happy. The only hurdle may be, as Sulzberger pointed out, that “Linguists and LSPs may believe our solution is too good to be true. We will need to gain their trust over time.”

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