How the Odds are Stacked Against British Writers On-line

As an on-line writer, it doesn't take long to realize that the monetization revolves around the United States of America. 

Many of the writing sites are owned by Americans and demand articles in American English.  The majority of the affiliation companies are also founded and based in the States.  They will demand US tax forms to be completed on-line, then will pay your wages in dollars.

Initially, the major hassle is finding those sites which will even accept writers from outside those borders. Some won't mention this until you have completed the registration process.  Then comes the dreaded message: 'Sorry, US writers only.'  

The world wide web was invented by a British man.  Sir Timothy Berners-Lee gave his gift to us all.  But the first to monetize it was Bill Gates and he was an American.  Since then, his compatriots have not been backwards in making their fortunes on-line.  The US got the edge and they're still running with it.

With all earnings listed in dollars, it can give the average British person an inflated sense of how much they have amassed.  For example, $100 is likely to add up to only about £65.  This in a country where the cost of living is much more expensive than in the USA.

So should Britons simply give up?   Not at all!   But there are a few things worth noting along the way to save yourself a nasty surprise later.

I can't say that I hadn't been warned.  Months before my lovely Amazon cheque was in my hand, Sam had quietly mentioned that I should look into how to cash it.

It was a hidden obstacle which hadn't even occurred to me.  British banks are in the habit of charging to cash any cheque in a foreign currency.

I happened to be walking past NatWest the next day.  I nipped in to ask how much they charged, as I still had a half-dormant account with them from my student days.  (Which was moved to the Co-Op, once I realized that NatWest's ethics were as dodgy as, well, the destruction of the Niger Delta.)

The helpful assistant informed me that I could safely bring my US dollar cheque to them.  There were no charges and it could be cashed completely free of charge.  This remained true right up until the moment that I actually attempted that.

The cashier told me that it would be £10 ($15.49) to pay my Amazon earnings into my account.  Plus whatever the exchange rate was that day.  It was a standard charge for anything between $100-$1000.  More if you went above.

I took my hard-earned wages away from her and checked out the other banks.

CitiBank

Absolutely free.  Moreover, you could open an account that's solely in American dollars, if you liked, then link it up with another in Euros and another in sterling.  Happy days! 

Except that the only CitiBank branches are in London.  For those outside the English capital, I'm struggling to see how you would hand your cheque over.

The Co-Operative Bank

It's a percentage of the sterling amount, thus changes every day.  It will be in the vicinity of £6-£8 for a $100 cheque at current exchange rates.

Since writing this, I've indeed presented a $100 Amazon cheque at the Co-Operative Bank. Their rate does change every day, but that's only the exchange rate. The Co-Op pay you whatever is the daily rate when you hand in the cheque. That's fair enough, as that's what any bank would do.

They also charge you an administration fee of £4 for that $100 cheque. The fee goes up if the amount is larger than $2000. I should imagine that I wouldn't care, if my commission was that much!

HSBC

Absolutely free, as long as you have an account with them.  At least this is what I was told at the inquiry desk.  I was told the same at the NatWest inquiry desk too.  I'm yet to put it to the test to see if there really are no charges.

HSBC changed its policy in June 2013. I heard that it had been bought out by Lloyds TSB, but I see no evidence on-line about that. Either way, HSBC is now one of the least competitive, when it comes to submitting cheques in a foreign currency.

Lloyds TSB

Lloyd's Bank charge £5 for an American cheque of around $100.  Thank you to Humagaia for the information.

I was unable to find out for myself.  I walked up to the inquiry desk and smiled at the nice lady, "May I ask if you charge for cheques received in a foreign currency please?"

"Do you have an account with Lloyd's Bank?"

"No, but I would be willing to open one, if the charges were competitive."

She looked at me like I'd killed her first born, run off with her husband and trailed excrement all over her Axminster carpet.  In tones usually reserved for addressing war criminals, she hissed, "We do NOT open bank accounts just to cash foreign cheques."

I just stared at her and left.  My mother raised me not to punch snotty, rude people in the gob, but to rise above it.

Nationwide Building Society

The flat fee begins at £6, but rises up to around £20 for higher amounts.  Thank you to Kinworm for this information.

Royal Bank of Scotland (RBS)/Natwest

A standard charge of £10.

Yorkshire Building Society

There is a sliding scale of charges, but $100 will be cashed for £7.  This is the minimum charge available, so it's more as your cheque amount goes up.

I will add more banks and building societies as I check them out.

I did check out the Credit Unions.  They are probably one of the most ethical banking chains around, run by local people for local people.

Unfortunately, they won't touch cheques in a foreign currency.  This is because those have to go through a High Street bank and the charges are too prohibitive.   The lady I spoke with was very apologetic about this.

Eddie St Clare was a store-keeper on Ebay.co.uk, when he ran into the same problems as other British people making a living on-line.  While the majority of his overseas customers used Pay-Pal, there would occasionally be a cheque that arrived in dollars.

His response was to launch AuctionChex.com.  This is a service which involves you sending him your cheque in dollars.  He will then pay it into his bank and return a cheque in sterling. 

His charges are £1.25 for administration; or, if you want to set up a BACS payment, a one-off fee of £3.25 to set up the mandate.

I've tested him out and he's trustworthy.  My cheque left on Wednesday; my account changed to 'actioned' by Thursday; my sterling cheque arrived on Saturday.   All good!

Except something this good to be true turned out to be just that.  His exchange rate is not at all competitive.  I ended up receiving much less than what XE Exchange stated was the current rate to convert dollars into sterling.   Including the admin fee, it turned out to be a difference of £18 on a $164 cheque.

My cheque would have been in sterling, if I'd gone through Amazon.co.uk, instead of Amazon.com. 

I could have done that. I have an affiliate account with both.  In fact, when I started out at Wizzley, I was using my British account.  But then wiser minds advised me to switch.

The rationale is easy.  There are more potential customers in the United States, than there are in Great Britain.  It's a population of 314m versus 63m, all steeped in Capitalism's consumer dream.

Every time I monetized in sterling, I would lose out to the American buying public.  The British buying public are not only smaller in number, but facing a triple dip recession.  It doesn't take an economist to do the math.

Other affiliate sites, like Zazzle, are much more friendly to on-line sellers from around the world.  Each store there is recreated in mirror stores globally.  It all funnels into the same affiliate account. You can choose your currency of payment.  I could sell to all of America and still get my wages in sterling.

But there's a catch.  The commission is filtered first through Zazzle's US office.  They don't use the world-wide exchange rate, but one of their own.  It's less competitive.  In short, I can earn more by being paid in dollars and converting it myself, than I would being paid outright in sterling.

These sorts of policy questions and monetary dilemmas await.  Before receiving any payment from any affiliate, a Briton needs to work out the best way for it to happen.  More importantly, the best currency for it to happen in.

One solution is to go via VigLink. The site not only monetizes all of your Amazon and Zazzle links, but many more online stores besides.

In the case of Amazon, VigLink used to provide a better rate of commission, until you were selling more than 110 products per month.  There was a flat rate of 6.8%, instead of the sliding scale involved, when using your direct Amazon affiliate links.

Unfortunately their policy changed. I was using this method, until I suddenly noticed that I was getting 4% commission, even if I'd sold enough products to be in a higher band. Therefore I was getting less than I should have been. Presumably VigLink were pocketing the difference.

VigLink still pays in dollars. However, it does so via PayPal.  This means that British writers avoid the bank transfer fees.  Paypal will take a percentage in fees, but this is a much smaller amount that that demanded by high street banks.

This is currently the method that I am using.