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Introduction
Because there are various options available for international banking, the simple one-to-one correspondence of questions to answers used by most FAQs is not used here. Instead, this FAQ presents information under 3 broad categories:
How can I manage money from
Japan to other countries?
How can I manage money from other countries to Japan?
What are the related issues?
Order and Ratings
Options for each section are presented by most convenient and effective first, followed in descending order by less convenient options. In addition, a rating system of 's (maru) and ΄'s (batsu) is given in parentheses next to the title of each option. The purpose is to allow a quick assessment of advantages versus disadvantages of each option. A maximum of 4 and/or ΄ is possible, with 4 being the most advantageous or disadvantageous. Both sides of the equation are presented this way because every option has its benefits and also its hurdles. These are subjective judgments, not a count of the number of positives and negatives.
Combining Methods
It is very likely that a given translator will find it most advantageous to develop his or her own mixture of these techniques to manage money and facilitate relationships with clients. One client may be ahead of the curve in relation to electronic payment, while a second may be willing to arrange wire transfers and a third may be better off sending international money orders.
New Information Invited
Fortunately, the field of international banking appears ready to blossom into an even wider variety of options. This is due to the high demand for technology to ease the transfer of money in the same way it eased the transfer of information. As these options appear, the author of this FAQ invites tips on new services so that this FAQ can be updated. This goes for corrections and additional information that may be needed.
How can I manage money from Japan to other countries?
This broad category includes suggested methods for moving your money through your own efforts and for advising clients on how to pay you in the most effective and convenient way for both parties.
| Web Pay Services | International Accounts | Wire Transfers |
| Japan Accounts | Shiroha | Currency Dealers |
| Postal Money Orders | Intl. Credit Cards | Giro |
| Merchant Accounts | Drafts In Currency | Yen Draft Accounts |
PayPal/Web Pay Services ( ΄΄)
While the heading for this category features "PayPal," it should be noted immediately that several other major players can be expected to enter the field or have already done so. These web payment services could take over pay-for-service transfers because of their tremendous convenience.
Description
PayPal/web pay services started as a way for people to buy items from Internet auction sites, such as eBay. They function by setting up an account for the user, from which the user can transfer money to buy something from another person or to which the user can receive payment from another person. There is no charge for signing up. (In fact, PayPal gives you $5 and puts it into the account for you so something will be in there.) A client who wants to pay the translator through PayPal must also have a PayPal account.
After a PayPal account is established, a secondary step is to upgrade from a Personal account to a Premier account by "confirming" a bank account or credit card. This is necessary so that the account can accept credit card payments, since that could be how the client chooses to pay. To confirm a bank account or credit card, a user sends information about the bank account(s) he or she wants listed on the PayPal account as an option for transferring money into or out of the PayPal account. No money is moved unless it is in the user's PayPal account first. Confirmation of the bank information submitted will take 3 or 4 days. This step is important because it allows the translator to easily move a payment received from a client to his or her bank account of choice. All these actions are done with guaranteed security.
In a typical payment scenario, the translator receives an email from the web pay service stating that a payment has been made. This is merely a courtesy for notification, since the email itself does not factor in any movement of money. The translator then uses a browser to access the website of the web pay service and log in to his or her account. (The email will provide a link, but a bookmark in the browser works just as well.) At this point viewing of the account information is very simple and clear cut. Payments amounts, depositors, dates and fees are easily identified. Then it is up to the translator to decide whether or not to transfer some or all of the account balance to another account, such as the translator's regular bank account. This is also accomplished easily by following the instructions on the site.
Advantages
The foremost advantage is that everything can be done from the computer desktop. The client does not leave the office in Japan. The translator does not leave his or her workplace in another country. The entire exchange of money takes about 30 seconds, from country A to country B. This factor alone will probably drive more clients to acceptance of web pay services, not for the convenience of the translator, but for their own convenience and efficiency.
Another benefit is the low cost to the client. While a wire transfer can cost the client \5000 if they absorb the transmission price, a web pay service will cost them only \200. On the other hand, the cost increases for the translator, which is discussed below. The point here is that the low cost to companies for payment of services (translation, editing services) through a web pay service is likely to appeal to them and result in this becoming a common method. Additional benefits that accrue along the way include the fact that this method is completely legal, and so there is no fear of repercussions or discontinuation, and, as mentioned above, it is fast, reliable and international.
Disadvantages
The first hurdle is that the client must decide to use a web pay service. This does not mean they must pay a translator with a credit card, because there are other ways to transfer money from a regular bank account to a PayPal account, from which the client can send money to the translator. (This is true in the US and needs to be confirmed for Japanese companies and individuals.) However, the client must embrace a new method of administration that they may not have used before. Try recommending the PayPal Japanese explanation webpage. All industries have their idiosyncrasies in resisting certain types of change, but since companies who deal with translations are more likely to have connections to people in other countries, it follows that they will notice the advantages of web pay services before other industries will. Still, the translator may have to suggest that a web pay service be used, and it could be many years before a majority of a translator's clients use such a service.
Another concern is the cost of PayPal transactions. While the cost to the sender is only \200 per transmission, PayPal (and perhaps all the web pay services) makes its money from the recipient. The fee that is automatically deducted as soon as a payment is received into the user's account is 3.9% + 30 cents (in US). While domestic rates are 2.9%, an extra one percent is added for international transactions. This can result in a large chunk of the payment going to PayPal as their fee, with the breakpoint for a $50 fee being a $1280 payment from a client.
Extra Details
While PayPal started off as a means of paying for physical items on auction sites, it is clearly designed for payment of services as well, with its first selection in the payment Type menu being "Service". In addition, while many banks seem enthusiastic to help prevent international money laundering by making some international transactions more difficult, PayPal takes an extra step that banks normally do not: PayPal checks with the customer to confirm that the transactions are legitimate. If large amounts of money are going through the account, you can expect a phone call from PayPal, and they will simply ask why the transactions are taking place. After you explain your business, they won't bother you again.
This section has focused on PayPal because PayPal seems to be on the leading edge of web pay services for the moment. There are other services being offered, and more will probably emerge soon. In the US, Citibank offers c2it, and you do not need a Citibank account to sign up for the service. Unfortunately, c2it, like Western Union currently offers only the ability to send money from the US to other countries and not the reverse. This could change in the future. There are also likely to be several effective Japan-based web pay services that will allow transfer from Japan to other countries. Check the following companies for potential service:
The good news is that no matter how many web pay services become prevalent, sign-up is likely to be free, and so whichever service your client chooses, you will also be able to join that service and process your payments internationally. This, however, is not confirmed by this FAQ.
On the same day that a US bank local branch manager said that desktop computers will never be able to transfer money internationally and that all forms of international transactions were likely to get more difficult, PayPal sent out notification that it was improving its international service by offering multiple currencies in its accounts. This is perhaps much like being a currency dealer, but it does seem another step in the right direction for sending or receiving payments in any currency. See the PayPal Multiple Currencies demo.
In fact, PayPal's site explaining Multiple Currencies includes a Website Payments page that shows how to add code to your own website so that it will automatically facilitate payments in the denomination of your choice. This means that you could send an electronic invoice to your client with a link to your web payment page and the client should be able to follow the instructions and make the payment (as long as the client also has a PayPal account). You could even have separate pages set up to take payments in different currencies and then email the client a link to the corresponding page (payments in yen for Japanese clients and payments in dollars for American clients, for example).
International Accounts ( ΄΄΄)
There has been much discussion on the translation email lists concerning bank accounts that can be used in any country. In many cases, these discussions centered on Citibank.
Description
While this kind of account at first seems to be a single account with a single bank, it appears that a separate Citibank account must be opened in each country where you want to use it as a regular account. In other words, you cannot open a Citibank account in the US and expect that Japanese clients can pay into it with a domestic furikomi. Likewise, you cannot open an Citibank account in Japan and expect to use Internet banking for domestic transactions back in the US. (Or in other places.) You must open a Citibank account in Japan and you must also open a Citibank account in the country where you reside. It is likely that all banks operate this way, and it is probably due to laws that require definite lines between countries.
Advantages
The good news is that if you have opened two accounts with the same multinational bank, in the two countries where your transactions take place, then you will be able to transfer money from one account to the other without much trouble. This offers the maximum ease for clients in Japan (under the convention that has been most common, namely furikomi) because they can send payment domestically to Citibank in the same way they would for any other translator or service provider living in Japan. There is no disruption to their accustomed ways of doing business.
Another advantage is that the debit card issued by the Japan-based Citibank can be used to withdraw cash from ATMs and make debit purchases anywhere in the world, without needing a separate account anywhere else. This, however, is not the way most people like to conduct their day-to-day business and seems more like a perk, such as for traveling, though it does provide an avenue for withdrawing your money if no other avenue is available. And again, this is probably true for all multinational banks that can be considered alternatives to Citibank.
Disadvantages
The major disadvantage for many people will be the hurdle that stops formation of most bank accounts in Japan: You must be resident in Japan to start the account. Many translators living outside Japan were fortunate to understand this and establish their accounts while still living in Japan, but for those who have never resided in Japan or who cannot count on doing so, this is nearly insurmountable. See related issue Residency Requirements for starting accounts.
A second disadvantage is the high balance required at Citibank. Although a balance of \300k has often been mentioned on mail lists, it seems this balance is only required for avoiding a monthly service charge of \3000. If this is the whole story, many people would probably be happy with the minor fee in order to keep this convenient service operating. There have been reports of other disappointing behavior from Citibank (one translator said his account was closed by Citibank) but others have reported satisfactory service.
Extra Details
Based on reports from many translators, an international bank based in Japan will regularly mail a monthly statement for a particular account to an overseas address. This is one more important difference to the conditions met when maintaining a non-international Japan account.
This FAQ cannot currently confirm all the relevant details a prospective account holder would like to see. One such feature would be Internet banking, for both the Japan-based account and the other country-based account. Most likely Internet banking is now offered by every bank, so this should not be a problem, but actually signing up for use of the Internet banking feature may require that the account holder physically visit their branch in Japan to submit required forms and complete other details. If this is not so, or varies by bank, please report this and we will upgrade this FAQ.
Other Banks Offering International Accounts:Lloyds TSB
Good service and low charges are reported, with an international transfer at \5400, as compared to \6500 for Citibank. Also, the transmission of funds is faster, with money often available in the recipient account within the same business day. Spread on exchange rate is also a little better than some other services. Unfortunately, Lloyds, like other banks in this category, requires that you be a resident in Japan to sign up for an account.
UFJ Bank
United Financial of Japan, formerly Sanwa Bank, is referenced in translator list archives as being helpful for international transactions but that the accounts were separate and the domestic bank employees of one country actually know very little about conducting business to or from another country. (Again, this information can be easily updated by receiving reliable information from people having more experience with UFJ.) Since UFJ appears to be one source offering a web pay service, perhaps their offerings for international transactions will be better than for other banks
Sumitomo Mitsui Banking Corporation
Actually recommended for their international credit card, Sumitomo Mitsui (this is the correct name order in for the bank's English name) may also offer corresponding accounts option and other services. This needs to be verified.
Bank of Tokyo-Mitsubishi
While this is a huge multinational bank, it does not currently offer accounts in countries outside Japan. It's primary purpose in other countries seems to be the support of large-scale corporate finance. If the situation changes, we would like to add it to the list above. Other banks can be added as they are reported.
Wire Transfers ( ΄΄)
This is the standard way of getting money directly deposited to an international account. That does not mean there are no drawbacks or that newer methods will not supplant wire transfers in the future.
Description
A local bank manager explained that wire transfer is the most accepted process for sending money because it carefully documents who is sending the money to whom and therefore is supposedly less apt to be tampered with for money laundering or other criminal purposes. The client goes to the bank with your account information, fills in a page of detailed information and pays a fee for the transmission (typically around \5000). Exchange to the currency of the destination account is handled at the same time.
Advantages
As just mentioned, the greatest advantage is that this is the universally accepted method of sending money. Banks will not refuse. If the procedures are followed correctly, the sent amount will be deposited to the translator's account within 3 or 4 days.
Disadvantages
The primary disadvantages are cost and inconvenience. These are usually both passed to the sender of the money, the translation client, so they are not likely to be inclined to this unless they value your work a great deal (which may be the case). But at \5000 per transmission, it looks very awkward to send payment for a small job by wire transfer, when the amount for processing could exceed the value of the service provided. There is even the possibility that the client could expect the translator to absorb the cost of the transfer, deducting it from the amount owed.
A second cost associated with wire transfer occurs at the receiving end. Banks in the US typically charge $20 for having received a wire transfer. (There is probably some rationale for this, even though domestic Internet transfers are handled for free by the same banks.) Altogether, you are looking at nearly $70 in fees for having the money put into the account of your choice. For translators moving several thousand dollars worth of their own money from one account to another, this could an be an entirely worthwhile necessity, but for clients determining who is the best value for tightly-budgeted projects, it could be a demerit.
Extra Details
The US bank manager who provided some details for this FAQ suggested that a "repetition code" could be available from banks for clients who frequently send wire transfers to the same location. This cuts down the time needed to physically fill out forms at the bank. That would be up to the translation client to maintain and therefore is not a terrific marketing point overseas translators can offer.
Japan Accounts ( ΄΄΄)
Here, a "Japan account" simply refers to an account with a Japanese bank. This does not mean an international Japanese bank, merely an account with a bank in Japan that is intended for domestic use.
Description
As should be obvious from the discussion about international accounts, Japan bank accounts can only be opened while having official residence in Japan. The account is used as if the translator was living and working in Japan on a daily basis. Typically, a friend or relative actually manages the account by monitoring deposits and wiring money to the owner of the account upon request. This means the account is maintained somewhat surreptitiously, with nobody asking too many questions. Translation clients like domestic Japan accounts because it falls in line with their normal payment practices, namely the furikomi deposit.
Advantages
As explained above, this is the common way of making payments to vendors in Japan, so it is universally accepted and greatly favored by the people who administer the books at a company. It is also inexpensive for the client, costs nothing for the recipient, and takes little time for the deposit to appear in the account.
Disadvantages
There is some paperwork involved for the client, even though they are accustomed to it. It used to be that a trip to the bank or ATM machine was necessary to drop off completed furikomi forms or finish electronic transactions, but Internet furikomi has eliminated that requirement.
As for disadvantages affecting the overseas translator, where do we begin? On the one hand, the translator is happy to have a means to facilitate payment that the client appreciates. On the other hand, it is difficult to check the account balance, confirm client deposits and have money transferred from the account to the location where the translator is actually living. This is not to mention that the translator is relying on continued good relations with the friend or relative managing the account. Nor does this examine the always looming potential for the bank or the government to suddenly discover the arrangement and terminate it on grounds that it may actually be illegal. The primary disadvantage, however, is that it cannot even be attempted without first establishing residency in Japan in order to open the account.
Extra Details
The rise of Internet banking has made it possible to set up online monitoring of an account at all Japanese banks. If there are some still not offering this, they are part of a very small minority. This means that tracking the account balance and confirming client deposits could be done from overseas as easily as from shitamachi. This could be an important aspect to managing the account since it many not be possible to ask a regular Japanese bank to mail monthly statement directly to an overseas address and the translator's informal intermediary in Japan may not forward them routinely. However, establishing an Internet banking connection may require a physical trip to the bank, and money still cannot be transferred across a national border by means of an online banking transfer along the lines of a domestic online payment or account transfer. Wire transfers out of the country would still need to be handled by a friend or relative who physically completed arrangements at the bank.
Shiroha ( ΄΄΄)
Shiroha is a start-up company dedicated to facilitating international payments for translators living in different parts of the world.
Description
In Fall 2002, Hendrik Daiku, a translator and businessman on Ishigaki Island, southern Okinawa Prefecture, responded to translator mailing list postings concerning international payment difficulties by forming Shiroha General Services, Ltd. The purpose of this venture is to offer an avenue for the adminstrative handling of money between translation clients in Japan and translators living outside Japan.
Due to the recognized need for conducting such a business in compliance with Japanese and international law, Hendrik has worked to establish his business within such boundaries. This has been a valiant effort, considering the formidible obstacles and low rate of return during the early period of the venture.
Advantages
As with several of the other money transfer methods mentioned in this FAQ, the primary advantage of Shiroha is that it provides an avenue for payment that is familiar to the client. Shiroha maintains an account in Japan for the reception of payments, and that allows the translation client to send payment by furikomi to a domestic account. This is easy, inexpensive and quickly completed. The client is spared the additional expenses of a wire transfer and the unfamiliar complexities of unconventional methods. Once a routine is established between the client and the translator (with Shiroha administering transfers in the background), the client-translator relationship should be as smooth as with any other banking arrangement.
Hendrik has shown flexibility for solving unexected problems that can arise from a new enterprise. And while levels for fees have been suggested, and they are reasonable, they could be modified as the service becomes accustomed to its operations.
Disadvantages
This is a new service and as such there are several considerable hurdles, not the least of which is convincing clients and translators that the service is a viable alternative to conventional practices. Another point open to nearly endless contention is the degree of legitimacy obtainable by such a venture in regards to banking regulations. Hendrik is confident of the banking cooperation he has received, but there is always the possibility that the issue could be evaluated by authorities in the future. Because much discussion about these issues was taking place on the JAT mailing list in November, 2002, JAT Vice-President Brian Hyman reminded list readers, "Please note that JAT has no involvement whatsoever in Hendrik's project." (message 10221)
Another important consideration is the billing procedure. Because furikomi requires a single account name and account number as the target bank account, the Shiroha name and account must be used. Some clients may object to paying an invoice from a translator that lists a third party as the recipient of the money. To rectify this situation, Hendrik offers to send the invoice to the client on behalf of the translator, adding Shiroha as the source of the invoice. In this case, the client would pay Shiroha for the translation services and not be concerned with whether or not the money was actually transferred to the end translator. (In theory, that is. In practice, all sides would realize the cooperative nature of the arrangement and expect payments to be passed properly.)
Extra Details
Shiroha has been officially licensed as a company in Japan. That it is a new company in a new field is important to note. On the other hand, new services are being offered everyday, and PayPal is an example of this. While a large company like PayPal (a subsidiary of eBay) can be expected to understand all the legalities related to its products, a certain amount of nerve is always required to venture into new territory.
Another important fact is that Shiroha is one of the few payment options offering overseas translators the ability to receive payments by furikomi, the most widely accepted payment method in Japan. While there are many issues to consider regarding Shiroha, it could be an effective transfer method for some translators to use within their overall monetary strategy.
Currency Dealers ( ΄΄΄)
This service, relatively unknown outside financial circles, receives money into an account in the currency of your choice. It is a practical way of moving money between countries, but it may be lacking as a payment facilitator because deposits cannot be made by furikomi. (This needs confirmation.)
Description
Currency dealers are financial institutions that allow you to maintain accounts in currency of any denomination you choose. Therefore you can have an account in yen while living in New Zealand or Germany. You could also have an account in pounds while living in Brazil. While most investors use these accounts to transfer cash to other denominations when the corresponding exchange rate is favorable, translators can use the accounts as though they were regular accounts for accepting client deposits.
While there are many currency dealers (check with your favorite financial services institution), US-based Everbank.com is highly recommended. It has earned a Forbes magazine "Best of the Web" rating from 2000 through 2003. After getting to the site, go to "World Markets Accounts" to check details on setting up an account in a foriegn currency. Once this is set up, translation clients in Japan can pay to Bank of Tokyo-Mitsubishi, a correspondent bank for Everbank, and the deposit will go into your yen account. You then move yen from your Everbank yen account to another account, losing a slight margin on the exchange rate along the way.
Advantages
An important advantage would be the ease with which clients in Japan could pay directly to the financial institution using furikomi, but it has not been confirmed that this is possible. A secondary benefit is that the acount holder can keep the money in a yen account until the exchange rate improves.
Disadvantages
The amount required for initial deposit at Everbank is $2500. There could be fees for letting the balance drop below this amount. Also, one translator notes that his currency dealer charges \2000 per transaction to have deposits received at his account in Japan. (Everbank seems to handle reception without charge.) Apparantly there are no other fees for the transfering money once it is in your account, though the margin on the exchange rate will probably vary by dealer. But for reasons that are not clear, Internet management of transactions is not possible. You must call the currency dealer and ask for the money to be moved in the appropriate denomination to the account of your choice.
Extra Details
Unfortunately, we have very little data from translators who actually use this payment method, and so some details are sketchy or unconfirmed. Instructions for paying to Tokyo-Mitsubishi say "You may wire funds in yen directly to: Bank of Tokyo-Mitsubishi Ltd. [BTM account number], for further credit to: Firstar Bank, for further credit to: everbank World Markets, Account no. [translator account number]." This therefore appears to be a wire transfer and may have the exact same fee (around \5000) as for a wire transfer to a regular account overseas. Also, one translator reports that BTM was puzzled by the account number shown on the instructions.
The potential usefulness of this payment method appears to hinge on the exact way in which a client can pay into the account. If it is identical to wire transfer procedures and fees, there is no advantage over that method. If there happen to be provisions for furikomi to the account, that would create an advantage over wire transfers. There may be other shortcomings, but there may also be other advantages. As soon as we receive additional information on these issues, we will update this FAQ.
A call to Everbank (+1-888-882-3837, ext. 7 for World Markets) showed that the staff was knowledgeable and eager to help immediately. (Their site also lists an 800 number.) They have no physical outlets, and although they have an informative website, international transactions are handled by phone (and perhaps by fax as well). Other currency dealers may be as accomodating and efficient.
It was mentioned above that currency dealers handle transactions after receiving orders by telephone, yet PayPal has begun adding features to there web pay service that appear strikingly similar to currency dealing (PayPal Multiple Currencies).
Postal Money Orders ( ΄΄΄)
Money orders can be obtained from any bank, but an International Postal Money Order is a special type of money order that can be cashed in most countries around the world.
Description
A translation client can obtain an International Postal Money Order at any post office in Japan and then mail it in an envelope to the translator. The money order must say "International" on the face. When received by the translator, it can be taken to a local post office and exchanged for cash. The translator needs only to show ID and sign the back of the money order, as with a check.
Advantages
These money orders are accepted all over the world and can be immediately traded for cash at a post office. The denomination of the money order is set and the foreign exchange component completed when purchased by the client, so there is no problem for the translator in receiving cash in the required currency. Also, at \500 for the purchase fee, the international money order is inexpensive for the client.
Disadvantages
The upper limit for any single international postal money order is $700. So paying for large jobs requires several money orders. It also requires the client to go to the post office to arrange the money order and requires the translator to make a trip to his or her local post office after the money order arrives.
Cashing the international postal money order may not be problem-free. Most post offices carry a limited amount of cash, since they are not similar to banks in most countries (in contrast to the postal system in Japan), and so if the full amount of the received money orders exceeds cash on hand, some contingent procedure must be found, such as arranging for money to be brought to the post office on a succeeding day so it will be waiting for you. This is providing that the post office can concieve of a contingency for this case, which they will most likely try to avoid by asking you to go to a bank. At this point the bank will inform you that they can cash the international money order and deposit it to your account, but it will require 4 weeks for processing (the same as for a foreign check) and the fee for the transaction will be $50 (this amount will vary by bank; one bank said $100). If the the money order is for the full $700, then 7% is lost to the fee. If the money order is less than $700, the percent lost is higher.
The above details describe a catch-22: Cashing an international postal money order at a post office is free and easy, but since they cannot do it (unless it is for a small amount) cashing becomes difficult and expensive.
Extra Details>
Naturally, a payment coming by regular mail and requiring physical processing at a post office takes some time. Normally this would not be a huge inconvenience for the average person, but in this era of development and change, it seems that the time and methods involved are increasingly archaic. In addition, international postal money orders cannot be sent to New Zealand and there may be other countries with this restriction. On the other hand, money orders of this type have been around for a long time and have been found reliable, even inexpensive and convenient, for many people. They should be considered in certain translator-client relationships.
International Credit Cards ( ΄΄)
Use of international credit cards could really be considered a sub-category of Japan Accounts, but the way in which they are used seems to merit some separate discussion.
Description
After first having opened an account with a bank in Japan (requiring residency), the translator orders a credit card linked to the account. After the card arrives, the translator can go to his or her normal residence abroad and use the card for monetary transactions.
Advantages
As long as there is money in the Japan account, the translator can use the international credit card to make purchases and to withdraw money from ATMs. The money used is of course withdrawn from the base account, located in Japan and denominated in yen. Evidently, the purchases and withdrawals are automatically transacted in the local currency, so foreign exchange is completed, although the rate and margin applied probably vary by bank and/or credit card intermediary. In Australia, a \200 fee is applied for every AU$500 withdrawn. This provides a seamless way of using money from the account as though it was an account with a local bank in the translator's country of residence.
Another obvious advantage (inherrent in the Japan Account option) is that clients based in Japan can furikomi directly to the translators account, easing payment and administration.
Many banks offering this kind of arrangement are also good about providing online account information, allowing the translator to login and keep track of the account even though the transactions are occuring overseas while administration is being performed in Japan.
Disadvantages
Aside from the residency requirement for setting up the Japan account, there are other notable drawbacks. The first and most clear is that money is not easily transferred to the translator's common domestic bank account. While making purchases and withdrawing cash may be helpful, the translator also needs to make bill payments and perform other financial actions using his or her regular domestic account in ways that are common, such as by check or online payment. Using the credit card to withdraw cash and then make a cash deposit at the local bank seems an awkward workaround, and losses on fees and exchanges rates could be hard to track for noting as expenses.
Although online viewing of the account may provide sufficient means of periodic accounting, this method may not provide the control and records that some people prefer. Statements would have to be forwarded to the translator, and that may require special help from a friend if the bank does not mail to overseas addresses. (Also keep in mind that many online banking systems require you to login at least once every 60 days or the service will be deactivated.)
Extra Details
For those who find international credit cards a good option, there is also the advantage of using them wherever they may travel. The methods used for conducting business at home will be the same while on a vacation or business trip to nearly any other country in the world. The account may also offer free Internet furikomi, which enables the translator to pay bills generated with Japan-based merchants.
The "International Cash Card" offered by Sumitomo Mitsui Banking Corporation has been highly recommended. A regular Japan account with Sumitomo Mitsui must first be established, but it is thereafter a simple matter to add the international cash card and the online banking service (called One Direct at Sumitomo Mitsui). There may be other banks with equally convenient cards. We would like to add details as they are submitted.
Giro ( ΄΄)
Giro is a bank system organized by members of the international postal system and provides special means of transferring money between countries who participate in Giro.
Description
It appears that Giro is very similar to Japan's domestic postal system in its ability to transfer money between member accounts, and the advantage is that these transfers can be made internationally between accounts in any of the member countries. In Europe, the system is called Eurogiro. Unfortunately, it is not adopted in the United States, but for transactions between Japan and European countries, it could be quite practical.
Advantages
The Japanese postal system recently increased its compatibility with Eurogiro, greatly expanding its potential and helping spread the service globally. With a Giro account (XΦUΦϋΐ), the translator or client can transfer money to or from Japan with a fee of only \400 for amounts up to \1 million.
The Eurogiro site explains that there are several different money transfer products available, including standard transfer (4 business days), money orders (5 days) and Western Union transfers (minutes). These may be similarly available on the Japan side.
Disadvantages
One disadvantage is the need for both the translator and the client to have a Giro account. This may not be difficult to accomplish, and the advantages in fee savings could far outweigh the small efforts needed, but it may be an extra step that is seen by some as an inconvenience. It is not known at this time if a person arranging a Giro transfer needs to arrange this with an actual trip to the bank or if online management of the transactions is now possible.
The main disadvantage for many translators is the absence of the service in the United States. This can also be seen as a disadvantage for clients as well, since the client would have to keep track of which translators can be paid by Giro and which cannot (a kind of administrative distinction that clients have to make anyway, it can be said). The Eurogiro site lists Deutsche Bank AG of New York as a Eurogiro member, but it is not clear if persons living throughout various parts of the United States could arrange accounts and manage transactions through this single outlet. It is also unknown as to whether the United States will eventually adopt the system, which may be unlikely because the United States Post Office offers less in the way of monetary services than do the post offices of other nations.
Extra Details
The Eurogiro site also states that while Giro started as a means of faciliating electronic payments between European countries it is rapidly expanding across the globe. This could be good news for translators in many other countries that are not yet part of the Giro system but may be very soon.
Merchant Accounts ( ΄΄΄΄)
A merchant account is an arrangement with the banking establishment that allows a purveyor of goods or services to take payment for those items by way of credit card.
Description
The translator, acting as many other businesses do, sets up the merchant account in order to take payment from customers via the customer's credit card. Usually this is done through the translator's website, though it would probably be possible to conduct the transactions in person or by telephone, fax or mail, as is done with other merchants. As long as the customer has a credit card, they can pay, from anywhere, to anywhere.
Advantages
The primary advantage of a merchant account is the reliability of the payment making it into the translator's account. It is as foolproof as for the millions of other businesses around the world that take credit cards. It knows no borders. (However, it is unclear at this time how different cards are permitted for the account, which would be important for cards common in Japan but not in other countries. Also unknown is how currency denominations and exchange rates are handled by the mechanisms of such accounts.) With a properly functioning website, the translator should be able to periodically check the account status to determine which clients have paid their invoices.
Disadvantages
Cost. The merchant account will require about $3000 for the first year, according to one translator estimate. Members of the American Translators Association will find a reference to "Credit Card Acceptance Program/Professional Services Account" (tucked away in "An Easy Reference to ATA Member Benefits" within "Other ATA Membership Benefits" under the "Member Benefits" section). This will refer the translator to NOVA Information Systems (+1-888-545-2207). A call to Nova revealed that it is a standard merchant account setup house eager to do business with anyone who calls. (In other words, it may take a lot of reminding them of affiliation status in order to get some kind of discount on services.) Nova described costs as $449 for software, whatever cost for your own ISP setup and monthly maintenance, 2.53% taken from each transaction as a fee, plus a $0.30 fee on each transaction. In addition, the account movement must move at least $30 a month to avoid a $2 service charge.
These details can be boiled down to a simple description: After setup costs, the average fee is 2.53% of any payment received plus 30 cents. Comparitively speaking, this is less than the 3.9% plus 30 cents taken by PayPal for a service that can be seen as more convenient because the client does not need to have a PayPal account in order to use a credit card to pay.
So the real rub with merchant accounts concerns setup costs and maintenance. How much for needed software? Who runs the software, the hired ISP or the translator? What will be the additional costs from an ISP to get a website functioning with the merchant account mechanism? Will there be additional monthly charges from the ISP? After starting, whose responsibility will it be to ensure the site keeps running smoothly and securely? Only after all these costs are considered and balanced against the likely income to be brought in through the account will a translator know if it is a practical solution.
Extra Details
One more point that could be counted against merchant accounts is the firm conviction by many in the industry that Japanese companies do not usually pay for their goods and services with credit cards. This could change due to the ease with which the Internet is making it easier to conduct business, but there may be many other significant reasons why companies would prefer not to pay by credit card. In this case, the translator with a merchant account would have to persuade the client to use it.
One last point is that web pay services such as PayPal are already offering credit card transaction facilitation without the setup and maintenance troubles. Yes, the client must establish an account with the web pay service, which prevents it from being a seamless solution, but a translator is likely to have many fewer customers than a typical online merchant and convincing that relatively limited number of clients to use a web pay service would most likely be much more cost effective and convenient than setting up a merchant account.
Drafts In Currency (΄΄΄΄)
A "draft in currency" is a check, made out in the denomination needed by the translator in the country of his or her residence.
Description
Several banks in the US have suggested that the international payment problem be simply solved by instructing the client in Japan to go to the client's bank and having the bank "make out a draft in dollars drawn on a US bank." Sounds simple. Never heard of it.
Advantages
If this could be further defined (information welcome), it would have the potential to be a practical payment means. In the ideal situation, the client goes to the bank and gets the draft in US currency (or whatever currency is needed for the translator's country) and sends the draft to the translator. The check comes in the mail and the translator goes and makes the deposit at his or her local bank. No problems with foreign exchange; no problems with waiting weeks for the check to clear; no extra fees.
Disadvantages
In the real world, the easy and simple solution described in Advantages seems nowhere to be found. This method has not been mentioned on the translator mailing lists and is not found in the message archives. For such a simple solution, it seems to have materialized only in the minds of American bankers. Of course, if we receive clarifications that nullify this dim view, we will update this section of the FAQ.
Even if Japan companies ordering translations were in fact familiar with procuring drafts in foreign currencies, the method still has disadvantages that can be easy identified. First, the client must physically go to the bank to arrange the transaction, and then the client must physically mail the payment. Both of these actions will become more and more inconvenient as online solutions eliminate these steps. The client would probably also have to pay a fee for having the draft made. On the translator's side, it could take a week or more for the check to arrive by mail from Japan, and then the translator must deposit the draft by going to the bank or mailing it. In addition, there may be other costs not clearly recognized. Can a received draft really be deposited immediately and without fee?
Extra Details
As can be inferred from the information above, little is actually known about ordering drafts in a foreign currency. We would welcome any additional information on the details of how drafts work and their possible usefulness to translators.
Yen Draft Accounts (΄΄΄΄)
Yen draft accounts are special accounts used by financial institutions to move money for clients back and forth between countries.
Description
Huge multinational corporations need yen draft accounts when handling the tremendous amounts of money earned by their enterprises overseas. Some of the largest examples could include IBM, Microsoft, Nike and Levis. While this method is not practical for translators working as sole proprietors, it is included in this discussion of payment methods because banks recognize few other legitimate international bank accounts.
Advantages
Large companies can move their money as they like without the fuss of wondering what is the best method. Clients pay into accounts in Japan and the money can be transferred to banks in other countries with the banks helping to ensure that everything goes smoothly.
Disadvantages
If the considerable expense of a merchant account was viewed as a deterrent, the yen draft account fees will be seen as a steel barrier. Although we do not currently have exact figures, an executive at a large US bank said that maintenance fees are substantial and probably beyond feasibility for individuals. "The person would have to be moving several million yen per month through the account to make it worthwhile," the banker stated. Small translation companies may find this type of account a workable option.
Extra Details
Specific details are not included because this is not the kind of account that would be useful to the average translator. As mentioned above, yen draft accounts are merely explained here so that people will understand that in the world of international business there are indeed solutions for international transactions, but some of the most commonly used solutions will not be practical for translators. If, however, details are submitted that demonstrate how these accounts actually work, how much they cost and why they could be viewed as viable for translators, we will gladly update this FAQ and present the information.
How can I manage money from other countries to Japan?
The methods presented here are a close reflection of the ways to move money and advise client payments explained in How can I manage money from Japan to other countries? Only significant points related to the different direction are noted and then a More link for each topic is given so the viewer can go to the more detailed section if needed.
| Web Pay Services | International Accounts | Wire Transfers |
| Foreign Accounts | Postal Money Orders | Intl. Credit Cards |
| Giro | Checks | Currency Dealers |
| Merchant Accounts | Drafts In Currency | Dollar Draft Accounts |
PayPal/Web Pay Services ( ΄΄)
While "PayPal," is featured in this review, several other major players can be expected to enter the field. These web payment services could take over pay-for-service transfers because of their tremendous convenience.
For translators based in Japan, it may be more practical and convenient to search for a web pay service that is also based in Japan. This is because a Japan-based web pay service may have features that integrate more easily with regular Japanese banks. The opposite is also possible: PayPal may not integrate easily with Japanese banks. There is no specific reason to suspect problems, but we simply have not yet received confirmation that web pay services work as easily in the to-Japan direction as they do in the to-America direction. (For that matter, if a translator in any particular country notes difficulties with any web pay service, we would like to present the details here.)
It must also be remembered that the choice of a particular web pay service will often hinge on what is most convenient for the client, i.e., which service will be easy for the client to use. Most will probably choose a service such as PayPal because of its English interface and its familiarity in many countries. If the translator in Japan prefers a Japan-based web pay service, he or she will have to persuade the client to open an account with that service. At this time, the web pay services cannot process transactions across services, that is, to or from another web pay service. More
International Accounts ( ΄΄΄)
It is probable that the same difficulties related to international bank accounts in the from-Japan direction also exist in the to-Japan direction. Namely, that these accounts are basically parallel accounts that must be set up in separate countries and that charges for transferring between accounts still apply. Also, it will require establishing residency in another country to be able to open an account in that country.
Citibank could be a good option for an international account. As mentioned previously, Bank of Tokyo-Mitsubishi has said that it does not handle individual accounts in other countries and focuses on corporate support instead. This could be inaccurate if someone with an account at BTM in Japan has found avenues for conducting business through overseas branches of BTM. Most other large Japanese banks, such as Sumitomo Mitsui and UFJ probably also offer good support for accounts in other countries with important economic connections, such as the US.
One problem to watch out for is the tendency of many foreign companies to send checks for payment, and it can be considered all the more likely if the translator presents an account with a bank branch in the client's country (America, for example). Some clients may direct deposit to the translator's US account, even though this would have to be done with an online method because furikomi is not used in America, but it is possible that the client would simply mail a check to the translator, expecting the translator to deposit it to his or her US bank. Since the translator would be living in Japan under this scenario, this would require the translator to mail the check back to the US for deposit, in effect wasting time as the hardcopy check makes two trips across the ocean. More
Wire Transfers ( ΄΄)
As with receiving payment from Japan, this has been the time-honored way of getting money directly deposited to an account in another country. It does have the disadvantages of requiring some effort on the client's part to make sure the arrangements are carried out correctly, and there will be a fee both for the sender and for the recipient.
Translators having good working relations with clients in other countries may have little trouble securing cooperation with this reliable payment method. Long-time JAT member Bill Lise gives clear instructions to his overseas customers, and he offers detailed advice in Getting Paid in Japan by Overseas Clients. Since wire transfers are standardized across the world, there should be few problems with the transaction if accurate bank account information is used. More
Foreign Accounts ( ΄΄΄)
Here, a "foreign account" simply refers to an account with a bank in a country aside from Japan. This does not mean an international bank account, merely an account with a bank in the country that is intended for domestic use there.
As mentioned in coverage of this topic in the direction from Japan to other countries, residency is an important requirement for setting up an account in most countries. There are other problems, such as how to manage the account and transfer money. The absence of the furikomi deposit method in some countries, such as America, also means that this advantage does not exist for clients, though bank transfers through online banking may someday provide the same function with the same degree of acceptance in the business community.
There is also the possibility that any given nation will crack down more strictly on accounts held by non-residents in order to keep money laundering and criminal activity in check. This approach may not be a fair way to differentiate lawbreakers from otherwise law-abiding people who simply need to do business in other countries, but such tightening of banking regulations could occur. More
Postal Money Orders ( ΄΄΄)
An International Postal Money Order will be available at large post office branches in countries throughout the world. There is a fee for having the money order prepared. The United States Post Office site confirms that its international money orders can be cashed at a Japanese post office, but the phrasing appears to confirm that the funds are denominated in US dollars, leaving responsibility for exchange to local currency in the hands of the foreign post office (Japan).
Although translation agencies are likely to be more open-minded about arranging payments, most US companies will laugh at the thought of going to the post office to arrange a money order. It is simply an eccentric inconvenience. This is unfortunate because the fee for arranging an international money order is only $3.25 for up to $700 listed on a single money order, and Japanese post offices are probably quite capable of handling the transactions on the spot. More
International Credit Cards ( ΄΄)
It is not known at this time if any large foreign-based banks offer ATM and point-of-service transactions in Japan, allowing withrawals in yen while the account is reconciled in the demonination of the base account. It would seem likely that some major international banks do offer this, but it cannot be confirmed. If some translators in Japan do use foreign credit cards this way, we would like to learn about the practicality of this method so we can explain it here.
This application of international credit cards is really a sub-category of Foreign Accounts, requiring steps for setting up the account in another country. It has been mentioned primarily because some translators living outside Japan do find it a practical method for using money earned and deposited in Japan, so it is possible that translators living in Japan could possibly use such an account in the opposite direction. More
Giro ( ΄΄)
As a bank system organized by members of the international postal system, Giro provides special means of transferring money between countries who participate. This is especially true for customers located in Europe, though the potential for global acceptance is very likely. Unfortunately, the US will probably not join the Giro network, due to the structure of its banking and postal systems.
Because the Japanese Post Office has recently increased its integration with Giro, the convenience of the services provided by Giro is likely to grow. Unfortunately, this is not yet apparent on the Japanese Post Office website . The Eurogiro site currently provides better information on the system. More
Checks ( ΄΄΄)
As mentioned several times in the sections just previous, many companies located in countries other than Japan will assume that payment by their corporate check will be entirely sufficient. Unfortunately, it could actually be somewhat troublesome. Fees for depositing checks from other countries can be several thousand yen per check, and there is likely to be a delay of up to a month as the bank confirms certain important details such as the veracity of the paying account number and the actual availability of funds. This is not a procedure peculiar to Japanese banks; banks in every country take these same precautions and charge similar fees.
The translator based in Japan needs to make clear to overseas customers what payment methods are acceptable, and it would be wise in most cases to agree on this before undertaking assignments.
Currency Dealers ( ΄΄΄)
Currency dealers accept deposits into a currency account and maintain it until the translator decides to move the money. Such moves are usually made from one currency to another, making wise use of fluctuations in exchange rates.
It is probable that deposits to such an account will need to be made by wire transfer, even if it is a client in the US is paying to a currency account in the US. If this is not the case (i.e., an online transfer can indeed be made directly from the client to the translator currency account) we would like to learn of the details and include them here. More
Merchant Accounts ( ΄΄΄΄)
A merchant account enables a translator to take payment by credit card. This is usually done through a website. Setting up a merchant account in Japan should be similar to the procedure used in other countries, though we currently do not have providers ready to recommend.
The cost of the merchant account is the main obstacle to their use, and the cost may be higher in Japan than in other countries. Nevertheless, Japan-based translators may find more reasons to use a merchant account than their overseas counterparts do, simply because most Japanese merchant accounts should take the major credit cards prevalent overseas and because companies in other countries, particularly America, are more likely to pay by credit card than Japanese companies. More
Drafts In Currency (΄΄΄΄)
Several banks in America have recommended that clients in other countries make payments by arranging a "make out a draft in dollars drawn on a US bank." Presumably, in a reciprocal gesture, an American bank could prepare a draft in yen drawn on a Japan bank, but this has not been confirmed.
As mentioned in the previous discussion of this topic, the entire method is murky. Perhaps it should not be, in which case we need to receive additional information. But this method would still be slightly inconvenient because the foreign-based client must go to the bank to arrange the draft, then it must be mailed, and then the translator must deposit the draft. There will also be fees. More
Dollar Draft Accounts (΄΄΄΄)
The heading "Dollar Draft Accounts" is used here as a mirror to "Yen Draft Accounts," specifically mentioned by a US banker. However, such accounts should be available in all major currencies. While these are common for large corporations that move huge amounts of money each month, the considerable fees prevent them from being practical for translators.
Such accounts could be practical for translation agencies and other small companies, since these accounts are a common international transfer method when sufficient amounts of money are involved. The account may require close maintanence by the account holder's bank. More
This section briefly describes some key issues that often must be considered when thinking about payment method options.
| Residency Requirements | Writing Off Expenses |
| Tax Matters | Fee Comparisons |
Residency Requirements
Several of the most favorable money management methods, such as International Accounts and Japan Accounts, require residency in the country in order to establish an account.
The residency requirement has been discussed on the translator mailing lists quite often. In many cases, anecdotes of personal experiences or those of acquaintances has been offered, and the result has been a picture that is often more cloudy than clear.
A check with American bank officials confirmed that the requirements for opening a bank account in America are very similar to the requirements for an account in Japan. As in Japan, the primary requirement is residency, and it turns out that the means of establishing residency is also similar to what has been described for Japan. In America, a foreigner must have a passport or Department of Motor Vehicles identification, a W-8 form (showing status for the Social Security sytem) and proof of address. The proof of address must be in the form of a rental agreement or a phone bill or electric bill that shows the person is paying the bill for that particular address. This combination of paperwork shows fairly clearly that the foreign individual is following legal procedures and is staying in the country for significant amount of time. (The W-8 form can be substituted with a more informative W-7 form, which is required to allow the person to sign up for Internet banking at the US bank.)
In Japan, these requirements look the same, with an Alien Card (Olo^Ψ) being substituted for a DMV ID card (although it seems unlikely that a passport is a sufficient alternative, proof of national insurance (―NΫ―Ψ) will be accepted instead) and some kind of a billing receipt showing that the person is recognized as resident at a certain address. It seems that Japanese banks do not require some kind of form tied to the social security system, as is the case in the US.
The real problem is that most overseas translators who work daily to earn a living would find it difficult to arrange a lengthy stay in Japan just for the purpose of establishing residency and thereby qualify for a Japanese bank account. It is apparently possible, and there is at least one story in the message archives of someone who has done it (9860), but it would take quite a bit of planning, some help from people in lining up a residence, and probably a little luck in dealing with the various organizations involved, from city hall (Alien Card) to the bank.
If a trip is made to establish residency and an account opened, there is still the remote possibilty that the bank could close the account if it discovers you are no longer resident in Japan. (Better to shoot for an account with a large international bank for that reason.) See International Accounts and Japan Accounts for more information.
Writing Off Expenses
No matter which approach you take with arranging payment methods, be sure to keep careful track of the fees involved and use them as tax deductions. These are simply part of the cost of doing business, and tax accountants, as well as government tax officials, will approve of these as legitimate expenses. A database and filing process can help you maintain good records of everything you lose to fees related to moving your money.
It is true that by writing fees off as expenses you recover only the amount that would be lost to taxes, somewhere around 30%, so it still makes sense to discover the methods that help you reduce fees as much as possible. On the other hand, there is almost always a fee of some sort associated with a transaction, even between financial institutions in the same country, so it is just good business sense to recognize the fees as a necessary part of living and working under these kinds of international conditions.
Tax Matters
International tax issues can be complicated, so watch for a separate FAQ on the JAT website. The topic is presented here only to give a heads up that tax officials in various countries may expect information on the interest earned by an account even if that account is overseas. So the IRS may want forms from banks in Japan showing how much interest was earned there.
This seems a little removed from reality, but one translator reports that the IRS required a statement from his bank in Japan and the Japanese bank even warned that the account could be closed if procedures were not followed.
When choosing payment methods, there are many more factors to consider than just the fees involved. The choosen method must meet the needs of both the client and the translator, for such issues as convenience, reliability, speed and security. The table below shows some basic comparisons of fees for some of the methods discussed in this FAQ, but it is intended only as a quick snapshot of the fees, leaving other large pieces of the puzzle still in the hands of the translator.
| Service · Fee | Client Fee | Translator Fee |
| PayPal | \200 | 3.9% + 30¢ |
| Intl. Account | 0 | $50/transfer + monthly fee |
| Wire Transfer | \5000 | $20/reception |
| Money Order | \500 | 0 |
| Check | 0 | \3000 |
Acknowledgements
Several people helped with specific suggestions for sections in this FAQ, but rather than naming each person individually, the author wishes to express his gratefulness to all who provided assistance. Likewise, much of the content is based on discussions that have taken place either on the JAT email list or the Honyaku email list, so all those participating in those Internet discussions have had a degree of influence on the creation of this FAQ.