Cheques, US bank account or Payoneer?

Part 25: learn how overseas authors and publishers can access their Amazon royalty payments fast and with reduced fees and charges.
Unfortunately for authors from many countries, including Australia, the only option to accept royalties collected by Amazon is to be paid via international cheque, in US currency. Every time your royalties hit the payment threshold of $US100, a cheque for that amount is mailed to you. You bank the cheque, pay a $10 fee (potentially higher at other banks), wait 4-6 weeks for the cheque to be sent back to the US and for your bank to be notified that it has cleared, and you should get what’s left over in your account.

“Well, if you can come up with a better way to pay people in the next 96 years, I’d like to hear it.”     (source)

Money’s too tight to mention

Here’s a worst case scenario. Anthony Author makes US$100 in royalties. He doesn’t bother to jump through the whole EIN & W-8BEN hoop, and loses $30 in offshore (US) taxes. His bank takes AUS$10 to process the cheques, plus he takes a 2-3% hit on the currency conversion. At best, Anthony is going to see less than $60 of his royalties hit his bank account each month (and probably receive his January royalties some time in March). At the end of the financial year, he’ll have to declare that income for a possible onshore tax slug.
So here are some other options for Australian authors. Disclaimer: I am not your financial planner, and this is not financial advice. Do your own research. The following is a simple outline of possible courses of action the hypothetical Anthony might take. If you believe that this does constitute financial advice, then my Nigerian half-brother Prince Benjamin Tate III needs to shift ten million US dollars out of the country tout suite, and asks if you will forward your bank details to me to facilitate this transfer.

Possible options

1. Anthony could use a friend or relative’s US bank account to be paid royalties by US EFT transfer, direct from Amazon. While this would mean that Anthony would have access almost immediately to his money, it’s incredibly messy from a personal viewpoint and, I believe, illegal from the viewpoint of Amazon’s terms of service. It’s probably a good way for Anthony to have his Amazon account frozen and/or deleted down the track.
2. Anthony could sign up for a virtual banking service like Payoneer. Payoneer then issue Anthony with a debit Mastercard and open a virtual US bank account in his name. This account would then receive his royalty payments from Amazon via EFT. Payoneer charge a US$30 annual fee, plus 1% of the transaction total, which would mean that Anthony would receive US$96.50 of his royalties in a given month ($100 – $2.50 – $1) loaded into his Mastercard.
Now, I believe that Anthony could use his card to buy goods in US$ online for no additional charge. He’d probably want to use the card to buy goods or services in Australian dollars, in which case he’d pay the standard 2-3% currency conversion fee, plus any transaction fees associated with the card use (ATM withdrawal fees). He might be able to transfer money directly into his account via SWIFT, but this would incur small flat rate charges at both ends.
It is important to note that Payoneer is not a bank. Canny Anthony probably wouldn’t leave thousands of dollars lying around with them, because if things ever turned bad that money might well evaporate. Having said that, Payoneer gets nothing but good press from indie publishers and their reps are both extremely active and very helpful in author forums. They really do seem to care about the public image of the company.
3. If Anthony ever travelled to the US, he could attempt to open a bank account in his name at a US bank, and then use this for direct royalty EFT from Amazon. Of course, he’d check well in advance of his trip to see what kind of paperwork he would need to take with him, and how much he would be charged to maintain this account, and transfer money from it, to other accounts.
4. Anthony could request via email that Amazon place a hold on his royalties. This would mean that he would need to contact Amazon again to release his funds, and they would then send out a single cheque for the amount he had accumulated (assuming his royalties were over the magic US$100 limit).

Possible solutions

Options #1 and #3 are unlikely choices for Anthony. If he was an established and successful indie author whose royalties formed a substantial part of his income, he’d probably want to use option #2, as his money would be available for him to use much faster than the other methods. If he was just starting out, however, he could certainly use option #4 as a stopgap while he concentrated his attention in other areas.
Amazon are being petitioned to offer more options for payment to international authors, including the use of PayPal in automatic transferals. However, as Amazon are doing nicely with things the way they are and PayPal is owned by eBay, who also happens to be in the business of selling books, Anthony suggests you don’t hold your breath.

Proceed to Part 26: ‘How to get ebook reviews, part 1’, or return to the article index.
Return to Re: writing
While I’ve endeavoured to provide you with accurate information, what is considered ‘accurate’ will change over time. If I’m wrong, or you’d like to ask a question or share your thoughts, I’d love to hear your take on things.

Rhys About Rhys

Teacher, writer, editor, cook: a bit like that nursery rhyme, really.
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  1. Hi Rhys great information about payoneer and amazon royalties. Thanks for sharing.

    • Thanks for reading. Update: Amazon has now opened its domain; obviously, this changes things above slightly for Australian writers. Stay tuned for more details.

  2. I’m a fan of using Payoneer, it’s a bit of a hassle to get it set up, but after that it’s such smooth sailing.

    Money just drops on the payoneer card and I can either transfer it directly to my bank account or even use the card itself like any other card.

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