Home – New Forums Money matters Receiving and Making Payments in Multiple Currencies

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  • #988186
    ajmmacleod
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    Hi Flyers,

    I am building an advertising platform that will collect money from Advertisers and distribute it to Publishers (http://www.adtemple.net/). I have most of the technical details sorted out but the money side of the operation is still boggling my mind a little! I thought it might be useful to write out my thoughts to get a few concepts straight. I figure I may as well do this in a public forum as some feedback would be great and perhaps my waffling could help someone else out :)

    I will be collecting money from all over the world. I am primarily expecting a mix of USD/GBP/EURO/AUD. The business will make money by collecting a % fee from all advertising sold.

    Money flows in this way:

    Advertiser pays $ to me, I show advertising on Publishers website, I take %, send remaining $ to Publisher.

    Intuitively I feel that the US market will be my biggest, and I also feel that most countries that don’t use GBP/EURO/AUD will be accustomed to paying in USD also.

    I have considered supporting multiple currencies in the product but it gets tricky when a Publisher wants cash out USD, and the Advertiser has paid in AUD. For this reason I think it is much much easier to exchange everything into a base currency when deposits are made.

    Assuming that I maintain everything in USD then I need to find a way to actually collect into USD and maintain a bank account with a USD balance. I have looked into Stripe (US only), WePay (US only), Pin (AU, but pays in AUD only), Paypal (complicated – not sure if I can store in USD here).

    So I guess my questions are:

    1. Is it a good idea to store in USD?
    2. Is it possible for an Australian Citizen to maintain a bank account or paypal account in USD?
    3. Does anyone know a payment processor that is accessible to Australians but stores into USD?
    4. Is it possible (and would it be an advantage) to setup a company in another country (USA or somewhere with easier tax laws) where collection of USD is easier and/or tax/GST is easier?

    Further to all these problems I need to work out how to charge GST. I can’t imagine earning past the threshold too quickly so this can be deferred a little bit, but I need to ensure that my strategy for currencies works ok with GST once I get down that road.

    I realise that this is fairly complicated and I will definitely be obtaining the services of a professional once things are rolling a little bit further. I was just hoping to gain some exposure to any gotchas and start implementing money in my product. If anyone can recommend someone that specializes in handling money for these kind of companies that would be great (especially if they offer a discount for starters!). I’m not even certain where I would start looking for someone to sort these kind of problems out, so any advice would be welcome there also :)

    Any discussion/feedback would be most welcome!

    Thanks to All,
    Adam

    #1166058
    Dave Gillen – Former FS Concierge
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    Hi Adam,

    A lot of questions here that I can’t answer, but just a short note to say that you can accept USD into your PayPal account and store it as a USD balance. You could then either use it to purchase things that are priced in USD online, or you can transfer it into your local AUD bank account immediately or at some later time (minus a small percentage for conversion).

    It’s probably not the cheapest option long term (you lose a fee for accepting payment from overseas and another fee for converting to AUD, which might cost you around 5% all up), but could get you up and running quickly.

    Hopefully some more advice will follow. :)

    Dave

    #1166059
    niknah
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    Hi,

    I’ve been using PayPal and charging in USD. Watch out for is the the currency conversion. PayPal adds 3% to the normal currency rate when you try to transfer it back to AUD.
    There is also a cross-border fee. Say if someone pays you from a US account to your Australian account (in USD), you’ll be charged the cross border fee. But it’s relatively small.

    PayPal is not a bank account, you can’t transfer money to other US bank accounts from there unless the bank account is under your name. You can’t transfer money to a US stock broking account even if it’s under your name.

    You can start a normal US bank account, but only if you have some sort of work permit in the US.
    But starting a company in the US may get you an account too, haven’t tried.

    You don’t have to pay GST on earnings from foreign countries. :)

    #1166060
    BruceR
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    • Total posts: 195
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    Hi Adam,

    It sounds like you need to get some professional financial advice (i.e. not from a forum).

    My two cents worth: It is easy to have a PayPal account is multiple currencies (I use six AUD/USD/EUR/GBP/NZD/CAD) and you make payments as well – if you want to pay someone in USD then PayPal will use your USD balance first. This is ideal if your publisher accepts PayPal and your client is in the same country or pays in the same currency.

    As the other replies say, it is not the cheapest for currency conversion (or even the merchant fee) but it is easy to set up and unless you have a good volume of transactions to negotiate with, it might be pretty competitive.

    #1166061
    ajmmacleod
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    • Total posts: 11
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    FS Forum Support, post: 192233 wrote:
    Hi Adam,

    A lot of questions here that I can’t answer, but just a short note to say that you can accept USD into your PayPal account and store it as a USD balance. You could then either use it to purchase things that are priced in USD online, or you can transfer it into your local AUD bank account immediately or at some later time (minus a small percentage for conversion).

    It’s probably not the cheapest option long term (you lose a fee for accepting payment from overseas and another fee for converting to AUD, which might cost you around 5% all up), but could get you up and running quickly.

    Hopefully some more advice will follow. :)

    Dave

    Hey Dave,

    Thanks for yet another good comment! I’m going to look into PayPal a bit more seriously, they just have so many different (and confusing!) alternatives for payment. Old API/new API/buttons, etc :)

    Thanks,
    Adam

    #1166062
    ajmmacleod
    Member
    • Total posts: 11
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    niknah, post: 192240 wrote:
    Hi,

    I’ve been using PayPal and charging in USD. Watch out for is the the currency conversion. PayPal adds 3% to the normal currency rate when you try to transfer it back to AUD.
    There is also a cross-border fee. Say if someone pays you from a US account to your Australian account (in USD), you’ll be charged the cross border fee. But it’s relatively small.

    PayPal is not a bank account, you can’t transfer money to other US bank accounts from there unless the bank account is under your name. You can’t transfer money to a US stock broking account even if it’s under your name.

    You can start a normal US bank account, but only if you have some sort of work permit in the US.
    But starting a company in the US may get you an account too, haven’t tried.

    You don’t have to pay GST on earnings from foreign countries. :)

    Hey niknah,

    Thanks for the extra details and the GST tip! It’s unfortunate that PayPal seem to be the only ones who will easily allow so much flexibility with currencies.

    Thanks,
    Adam

    #1166063
    ajmmacleod
    Member
    • Total posts: 11
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    BruceR, post: 192251 wrote:
    Hi Adam,

    It sounds like you need to get some professional financial advice (i.e. not from a forum).

    My two cents worth: It is easy to have a PayPal account is multiple currencies (I use six AUD/USD/EUR/GBP/NZD/CAD) and you make payments as well – if you want to pay someone in USD then PayPal will use your USD balance first. This is ideal if your publisher accepts PayPal and your client is in the same country or pays in the same currency.

    As the other replies say, it is not the cheapest for currency conversion (or even the merchant fee) but it is easy to set up and unless you have a good volume of transactions to negotiate with, it might be pretty competitive.

    Hey Bruce,

    I definitely know that I need to see a professional, do you have any suggestions for who that might be? Do I just need to call up my local accountant or is there a way to find someone more specialised? I really have no idea where to start with this :)

    Thanks for the further clarification on PayPal, it seems I could do some good juggling and end up OK – at least for the time being. There are more important things to do at this point and I can work out a few % later :)

    Thanks for your time!
    Adam

    #1166064
    BruceR
    Member
    • Total posts: 195
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    ajmmacleod, post: 192282 wrote:
    Hey Bruce,

    I definitely know that I need to see a professional, do you have any suggestions for who that might be? Do I just need to call up my local accountant or is there a way to find someone more specialised? I really have no idea where to start with this :)

    Thanks for the further clarification on PayPal, it seems I could do some good juggling and end up OK – at least for the time being. There are more important things to do at this point and I can work out a few % later :)

    Thanks for your time!
    Adam

    No worries. I’m afraid I wouldn’t know who to recommend – starting with your bank might be a good way. I doubt your local accountant would be able to help you but they may know someone who can!

    That was my thinking on PayPal too – easy way to start as there are more important things to do..

    Good luck…

    #1166065
    DanielM
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    • Total posts: 241
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    Hello,

    You can store multiple currencies in your paypal account. If you want to offer a larger selection with very minimal fees, check out http://www.ripple.com

    It is a new innovative payment platform.

    #1166066
    ajmmacleod
    Member
    • Total posts: 11
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    DanielM, post: 192315 wrote:
    Hello,

    You can store multiple currencies in your paypal account. If you want to offer a larger selection with very minimal fees, check out http://www.ripple.com

    It is a new innovative payment platform.

    Ripple looks interesting! I have watched their into video and it says *what* they are achieving but is pretty light on the details of *how*. Their site also didn’t provide a nice summary.

    I found this article to be quite good : http://www.coindesk.com/10-things-you-need-to-know-about-ripple/ . From my understanding Ripple is like Bitcoin but more targeted to transactions and conversions.

    I’d be interested to know if anyone here is doing anything with it yet, feels a bit too risky for me at this stage :)

    Thanks for your feedback!
    Adam

    #1166067
    DanielM
    Member
    • Total posts: 241
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    ajmmacleod, post: 192424 wrote:
    Ripple looks interesting! I have watched their into video and it says *what* they are achieving but is pretty light on the details of *how*. Their site also didn’t provide a nice summary.

    I found this article to be quite good : http://www.coindesk.com/10-things-you-need-to-know-about-ripple/ . From my understanding Ripple is like Bitcoin but more targeted to transactions and conversions.

    I’d be interested to know if anyone here is doing anything with it yet, feels a bit too risky for me at this stage :)

    Thanks for your feedback!
    Adam

    To my knowledge it is the first decentralised asset exchange. In other words it is the web of value. Anything of value can be traded within Ripple (gold, bitcoin, usd, flowers, cows etc). Although primarily (as you stated) it will be used as a payment processor for businesses and remittance. This is because payments are instant and free (each payment costs $0.001 or something). However, the technology is still very new, so the markets are quite thin, meaning it is probably just something to watch out for in the future.

    Here are some notable press releases this year

    A German Bank implements the Ripple protocol
    http://finance.yahoo.com/news/ripple-labs-announces-fidor-bank-120200943.html

    Latin America remittance
    http://www.coindesk.com/first-latin-america-ripple-gateway-launch-seven-markets/

    Notable board members
    https://ripple.com/blog/welcome-karen-gifford-to-ripple-labs/

    Here are the investors (Google, Andreessen Horowitz etc)

    https://www.ripplelabs.com/investors/

    #1166068
    ajmmacleod
    Member
    • Total posts: 11
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    DanielM, post: 192482 wrote:
    To my knowledge it is the first decentralised asset exchange. In other words it is the web of value. Anything of value can be traded within Ripple (gold, bitcoin, usd, flowers, cows etc). Although primarily (as you stated) it will be used as a payment processor for businesses and remittance. This is because payments are instant and free (each payment costs $0.001 or something). However, the technology is still very new, so the markets are quite thin, meaning it is probably just something to watch out for in the future.

    Here are some notable press releases this year

    A German Bank implements the Ripple protocol
    http://finance.yahoo.com/news/ripple-labs-announces-fidor-bank-120200943.html

    Latin America remittance
    http://www.coindesk.com/first-latin-america-ripple-gateway-launch-seven-markets/

    Notable board members
    https://ripple.com/blog/welcome-karen-gifford-to-ripple-labs/

    Here are the investors (Google, Andreessen Horowitz etc)

    https://www.ripplelabs.com/investors/

    Fascinating! Thanks for the information!

    #1166069
    nominal
    Member
    • Total posts: 504
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    We’ve partnered with Payoneer – a global payment solution:
    http://register.payoneer.com/nominal/

    They allow you to receive payment in EU or US straight into your card, which can be used as any other MasterCard

    #1166070
    ajmmacleod
    Member
    • Total posts: 11
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    nominal, post: 192780 wrote:
    We’ve partnered with Payoneer – a global payment solution:
    http://register.payoneer.com/nominal/

    They allow you to receive payment in EU or US straight into your card, which can be used as any other MasterCard

    Thanks Nominal, I’ll have a look!

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