It’s 2010. Electronic transfers have been around in some form or another for ages. So want to guess how many publications pay their contributors electronically?
You’ll be shocked at the answer – though if you’ve been in the freelance business very long maybe you won’t be.
I posed that question last week to the members of Freelance Success, a subscription-only message board for independent journalists, paid bloggers and other professional freelancers.
Of the 20 or so writers who answered, only one had three or more clients who paid invoices via direct deposits into her checking account. A couple others had two clients who made direct deposits. The majority had one or none.
Me? I have one – and they started making direct deposits only last month, although before that they paid via wire transfer, which is even faster though my bank charged a small fee for accepting them.
It’s not like direct deposits are all that innovative. When I worked at a daily newspaper some 20 years ago, my twice-monthly paychecks went straight into my checking account.
So why are publishers so reluctant to keep up with the electronic times?
Could it be they want to hang onto their money as long as possible, including the time it takes a check to get from the accounting department to their contributors’ mailboxes? Are times so bad they need the float on what amounts to a blip in the overall scheme of publishing industry expenses?
Are they do behind the times they have yet to automate expense management?
What other reasonable explanation could there be?
Or is my sample bad, and most writers are being paid this way?
For all the grousing I do about content mills like Demand Media, they do have one thing going for them – they use PayPal and other online payment mechanisms to pay contributors, though in many cases writers must earn a minimum amount before they see a dime.
Given what I think of content sites, you know things are bad when I’m siding with the Demand Medias of the world.
The next time you’re negotiating with a new publishing client, speak up. Ask to be paid via direct deposit. Strike that. Demand to be paid via direct deposit. It’s time we freelancers took a stand and dragged publishers into the electronic payment age.
No, your sample’s not bad. Corporate clients demand to pay by direct deposit. Government clients are getting on board. Small businesses jump at the chance. Not-for-profits think it’s a great idea. But publishers scratch their heads in bewilderment.
Perhaps, if they are small shops with loose-knit management accountability, they are afraid that they are giving license to their bookkeepers to abscond with all the money.
On the other side of the coin, however, when I bring on fellow freelancers as sub-contractors, I prefer to pay them by direct deposit, but they usually prefer check. So, perhaps your sample is a bit off on that side.
Thanks for your perspective Darrell. For the freelance editing assignment I have now I’m working with 8-10 writers and I think I can speak for all them when I say they’d all prefer to be paid by direct deposit.
Michelle R.
Don’t forget that PayPal requires a transaction fee, too. It can be either paid by the person/organization sending the money, or taken out of the amount received by the writer.
My one client who uses direct deposit to pay me had previously gone through PayPal — and, yes, I was the one stuck paying the transaction fee.
I feel your pain. For a while, one of my clients was paying me via wire transfer. On the one hand I love wire transfers – talk about instant payment. Funds get transmitted to your bank, and boom, there they are in your checking account. On the other hand, there’s a hefty fee. My bank charges $13 per transfer, and for some crazy reason mails me a notice of the transfer, for an extra $2 fee. Enough customers squawked about the $2 fee for the paper copy the bank finally did away with the paper copy and the $2 fee. Shortly after that my client switched to direct deposit, which has no fee attached. But even though they’re “direct,” direct deposits take a couple days to find their way into your account. Still, I’ll take them over paper checks any day.
Michelle
Great post, Michelle! The situation is similar in the translation industry; my overseas clients pay by wire transfer (costs me about $10 each time) and most of my US clients still pay by check. But, I have 2 clients who somehow (I should ask them how…) have an arrangement with PayPal where I do not pay any fees when I receive payments from them. I’m not sure if they pay a fee to initiate the payment? Anyway, great topic!
Corinne: I’d love to hear more about the client that uses PayPal and has figured out a way to pay you without you having to pay PayPal a fee. If you figure out how they did it, please let me know.
Michelle
My comment about my sub-contractor writers not going for direct deposit was meant to be slightly facetious. I pretty much know it’s just the particular crowd I deal with.
I happened to read your post on this subject just a day or two after a client enclosed a “direct deposit authorization form” with their latest payment. That gave me an idea. Using their form as a crib sheet, I created one on my letterhead for anyone who expects money from me: vendors, sub-contractors, professional associations, etc. I’m including it with every payment I mail out.
I’m still working on clients, however. I don’t quite understand their reluctance. Is it fear (of embezzlement, for example), ignorance, laziness?
Hi Michelle! The feature on Paypal is called Mass Pay. There are no fees for people who use it to send payments.
Thanks for the info Melissa.
MVR