PayPal vs. Skrill: Which Payment Processor Should You Use?

As a freelance translator, you want to get paid and for that you need to know your payment options.

Once you start finding clients (or probably even before), you need to have a plan on how you will receive money from those clients. Because what good is having your own translation business if you’re not getting paid, right?

PayPal

PayPal is one of the most well-known payment processors in the United States. While it’s often used by non-business users, it is an option to consider as a freelance translator looking to process payments.

The first thing to know about PayPal is that there are three different options you can choose from when signing up for an account:

  1. Personal account – These accounts are best used for people that use PayPal to do things like shop online. It’s also good for use by people that want to receive payments like rental payments or dinner bills split between a group of people.
  2. Premier account – In contrast to a personal account, a premier account is used for sellers who sell online but who also want to pay for purchases online.
  3. Business account – Finally, business accounts are what they sound like – accounts used by merchants that are operating under a business name. We’ll go over some of the benefits of this type of account below.

OK, so for the purpose of this article, I’m not going to talk about personal or premier accounts. These accounts are fine for casual PayPal users, but since there is really no cost difference between setting up a personal/premier account vs. a business account, it makes sense to take advantage of the business account benefits.

And the biggest advantage to a business account is the ability to receive payments in a variety of ways:

  • on an app or your webpage
  • in person or in your store
  • by email or phone

As a freelance translator, you’re most likely not going to be receiving many payments in person or at your place of business. More than likely, you’ll be requesting payments over email. And, as a business that will be receiving payments by email, PayPal business accounts allow you to create invoices for billing, create a customized link for payments, and use a virtual terminal to accepts payments by phone.

Let’s walk through the one you’ll be using the most, which is using the online website or phone app to create and send billing invoices.

Create Billing Invoices

As a freelance translator business owner, you’re going to want to use this feature if you use PayPal. The reason is because with the invoice feature, you can easily keep track of your payment requests.

According to PayPal, this is how it works:

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Really, that’s all there is to it when dealing with invoices. You simply log into your business account, create an invoice using the templates provided, and then send a link to that template to your customer either through the online website or the PayPal app on your phone.

If you decide to collect payments this way, here are some benefits you can expect:

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Now, while it’s free to sign up for any type of PayPal account (including the PayPal business account), there are still merchant fees that apply for certain types of transactions.

Standard Transaction Fees

PayPal advertises low-rate merchant fees, but if you’re a freelance translator, it’s best to get some insight into what exactly those fees will cost you, since it’s money that will be coming out of your pocket.

So, what kind of fees can you expect? (Remember, these fees are only applicable when you sell your translation services online.)

So, first of all, here’s what you won’t have to pay:

  • startup costs
  • termination costs
  • monthly fees

Again, these are fees/costs that you don’t have to pay for using a PayPal business account.

Now, in terms of what you do have to pay, here’s a table that lays it out:

How translation services are being soldWhere the PayPal payment is coming fromWhat you pay
Online transactionInside the U.S.a fee of 2.9% of the transaction amount plus a fixed fee* based on the currency
Online transactionOutside the U.S.a fee of 4.4% of the transaction amount plus a fixed fee based on the currency

*You can find more information on the fixed fee amount at the PayPal website.

Skrill (Formerly Moneybookers)

I used to see a lot of freelance translators use Skrill (or what was formerly known as Moneybookers). Part of the reason for that was that Skrill advertised low international transfer fees, which as a translator makes good financial sense.

A lot of the work many translators do is not for clients in their own country so they need a way to keep costs low and a good way to do that is to use a payment processor that charges low international transfers.

OK, so Skrill is a UK-based company that has been around since 2001 and it works in roughly the same way as other online payment processors.

Here’s the basic process, direct from the Skrill website:

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Create an account. Have payments made to that account. Withdraw the funds into your bank account.

Seems pretty straightforward. And according to Skrill, you can receive payments in three ways:

  • into your Skrill wallet
  • into your bank account
  • into a mobile money wallet

OK, so what about fees?

According to it’s website, Skrill charges the following fees:

  • Withdrawing money – $5.50
  • Receiving money – free
  • Sending money – 1.45% (it’s not clear if your client paying you would be charged this amount)
  • Currency conversion – 3.99%
  • Additional – your personal account is free as long as the person who owns the account logs in or completes a transaction every 12 months; if not, there is a $3.00 service fee

One thing to keep in mind about Skrill is that there have (at least in the past) complaints from users about the difficulty they’ve had in getting their money from Skrill transferred to a bank account. I’m not sure if this is still the case, but just like with anything, I would make sure that you run some tests with small amounts of money before you do anything major.

OK, so there you have a pretty straightforward comparison between the two companies.

Each one has it’s pluses and minuses. If you’re based in the U.S., I would recommend that you consider PayPal over Skrill. Whichever tool you use, though, make sure that you do your due diligence in checking out both options so that you know which is best for your situation.

What about you? What’s your favorite way of receiving payments for your freelance translation business? Let everyone know in the comments below.


Are you looking for more translation clients? Make sure you buy my book: Translator’s Market.

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