Anyone have experience making foreign payments?
We've got to the point now where we have to start paying royalties for the UDK.
However, it seems that it is not all that straightforward to actually make the payments.
The bank, of course, had no understanding of our business and it seems our transaction does not fall into any of the pre-exsiting boxes that they devised back in the day before Isaac Newton had invented the flint knife.
They told us that we/they will have to apply to the reserve bank for approval and that will be a looong process.
I'm sure others here have run into similar problems.
Does all this sound correct? Is there some miracle piece of information I'm missing that I should be telling them?
Is there a way to describe what we are trying to do in a way that will make banking cogs whir, clank and click into place in a favorable manner?
Am I doing something (unusually) stupid?
Any advice would be appreciated. We'll be able to report back how all this goes for other souls using the UDK.
However, it seems that it is not all that straightforward to actually make the payments.
The bank, of course, had no understanding of our business and it seems our transaction does not fall into any of the pre-exsiting boxes that they devised back in the day before Isaac Newton had invented the flint knife.
They told us that we/they will have to apply to the reserve bank for approval and that will be a looong process.
I'm sure others here have run into similar problems.
Does all this sound correct? Is there some miracle piece of information I'm missing that I should be telling them?
Is there a way to describe what we are trying to do in a way that will make banking cogs whir, clank and click into place in a favorable manner?
Am I doing something (unusually) stupid?
Any advice would be appreciated. We'll be able to report back how all this goes for other souls using the UDK.
Comments
1. Contact whoever your license is going through for Unreal and tell them that sorting this out is a nightmare timesink and you might need a couple of months to get everything organised. Also, inform them that you might need regular invoices from them in order to make payments - if this is the case, you will have to tell them the amounts to invoice you for. I'll get to why you might have to do that... But contact them and say "Argh the SA banks are crazy, Reserve Bank, Exchange Control, people freak out because we make games!" Unreal should be on your side in this.
2. Stop trying to do this through your regular bank. They will not understand what's going on, you'll have to explain your business model to them every fucking week and they still won't get it. Move to a specialist consultancy, we use Currencies Direct for both incoming and outgoing payments and they consistently get us better rates than the banks offer, plus they sorted out all the stuff that the other banks were saying was impossible. They also only needed to have our business model explained twice.
3. The reason your bank is saying you need to make an application to the Reserve Bank is because you said the magical word of hatred: "Royalties". We made this mistake too, because that's what we thought it actually was. In our case, we were wrong and revenue share is not royalties, I have no idea what box it gets ticked as for the Reserve Bank, CD handles that for us. Basically, the RB is terrified of money leaving the country. When you pay out, they want to be sure that you're not secretly sending your life's fortune to some tax haven so that RSA can never get their allotted chunk of money from being the place you live in... So, your bank is trying to protect it's arse in the case of the RB auditing your transactions and going "Hey local bank, you guys fucked up letting these people move their life savings out of the country, you owe us all the monies, also fines!" when you have regular invoices from outside the country, your bank feels safer because they can tell the RB "These were legit transfers, look, paper!" - royalties are the perfect storm because the banks have to take your word for it that this is the amount of money you have to pay. So your bank is throwing the responsibility to the RB and asking for them to investigate you so that your bank isn't the one taking the risk. DO NOT PAY ANY FEES FOR APPLICATIONS TO THE RESERVE BANK! These seemed to be totally internal to the bank - we got told we had to do an application for each person we wanted to pay, then we got told we could group them together, then we got told the amount was much less when we said we were going elsewhere. Check with the RB if there are fees.
4. You might have to do the application thing in the end, but do it via CD. This is because you *are* actually paying royalties on revenues for licensing the Unreal engine. I'm not sure what the paperwork needed for this is, but I know that the process is for the RB to say "Yeah, okay, you can pay this one company regularly, you just have to let us know how much you're going to pay in a year" that's tricky if you're in games because PREDICTING THE FUTURE IS HARD, but you can just spitball it - going too high is good. There's apparently a process at the end of a year to calculate how much you actually sent out anyway, so the prediction may only have been our bank trying for more arse-coverage, I dunno. We ended up labeling our revenue share payments to the DD team members in the US as slices of revenue, not royalties, so we get them to invoice us every month (I'm actually sending out the amounts they need to ask for right now) and then I send those invoices to CD and they get handled. The royalties that banks and the RB understand are franchising agreements with international franchise holders, so licensing an engine could be argued to be similar or not similar, I would see what someone from CD says when you chat to them about it. Lay out your requirements directly though - you have to pay fees, based on a percentage of revenue earned, from using a licensed piece of software.
5. CD are pretty neat because they set us up with a foreign currency account, so we get paid Dollars into there and we can pay Dollars back out to our US team members without having to pay conversion fees twice. Then we just lump the remainder into our regular business account and CD gives us good rates - they can even do stuff like only convert your Dollars to ZAR when the rate hits a specific amount, etc. They're not quite scriptable, but they've been good for us so far. Netted us a few thousand rand extra here and there AND sorted out our issues with the RB and people not understanding how anyone would try to make money on the internet by selling games, OMG FUTURE WHUT?!
Good luck. Keep us up to date! I'd been meaning to put this info on the forums, thanks for giving me a reminder to ;)
P.S. You could use the threat to go to another bank as a tool to get your current bank to play nice, FNB's forex people smartened up when they realised they weren't going to be earning commission on our Steam revenues anymore. But they were still a worse service than CD. This is a service level thing, you're the one who has needs and demands, remember that you're in the driving seat on this stuff. You're not begging for a homeloan here, but banks often forget that and treat you like a peasant.
Even easier it just having them charge your credit card if that is an option; there's no real exchange control on that :)
If you have a business account, your best bet is probably to visit one of the business banking advisors at your branch and go through the process with them.
Somewhat unrelated, but I get regular payment from overseas for contract work, and it always frustrates me that not only is FNB giving me a crap rate, but they charge me commission over that for doing the transaction, rubbing salt in the wound. Basically, I lose over R600 every month just because of the the crap rate and extra charges. To me that's a lot, but I thought all banks were evil, so I didn't know that there were any alternatives.
And yeah, CC is an option, as is PayPal. But you're going to end up paying more because the conversion rates are bad, plus your bank is eventually going to sound all sorts of alarms if there are regular large payments to the same account off your CC.
I think @DarkCarnivour has done the regular approach at his bank and has gotten confused at the hoops they're making him jump through. I had the same experience with multiple banks, CD made stuff a lot better, but paying out regularly is still a hassle if you're not buying goods. I tried to explain why above.
I'm not sure how to minimise commission without moving to a specific currency-focused service, I used to get bent up about the PayPal extra percentages and commission and stuff, but it wasn't worth the stress in the end. And no, you can't get PayPal to pay out to a CFC, I tried :(
Wow, what a great response, thank you!
If it weren't so annoying it would be pretty comical. It's good to know that these archaic systems are the ones that have been objectively chosen to hold up important parts of society. My mom once actually got a bank consultant to admit that they lie to people. That was the local FNB branch, and I've had some frustrating, (comical in retrospect) experiences with them so we've been using ABSA.
1. Yeah, I can appreciate that. They have been quite helpful and I am trying to keep them up to date with what I know.
2. That sounds quite promising. Do they only have a branch in Capetown? Does that matter?
3. That sounds like a snake pit hidden just out of sight. Very glad I paused to find out more before pulling any triggers... They did say there would be a fee to apply to the reserve bank. They also mentioned that we would need to have this audited regularly too. Good to know what game the bank is playing.
4. Ok, doing the application doesn't sound like the end of the world. I don't have a problem if it is honestly the correct thing, and is not just someone looking out for their own arse and putting us between them and the regulators.
5. We'll definitely have to check out CD.
Thanks for that great information. I feel like I have some weapons to fight with and don't have to just take their word for everything. :)
I don't know how well it would work to try it with a credit card for such amounts... also, I don't have a credit card...
We did go to the bank to the foreign exchange and talked to their consultant. This is the story they gave us. I didn't like the smell of it, so I figured it needed some airing.
The situation was complicated by 2 things specific to our situation:
-We are transitioning from operating as sole-proprietor to becoming a company.
-We got new terms on the license for the UDK.
At the moment, things are once again in limbo. We are waiting for our company reg to go through and then will do the payments. It seems to be simpler to do it as a company rather than go through the process as a sole-prop and then again for the company.
I have been dealing with Currencies Direct and things seem to be going a bit smoother with them (although I had to remind them to respond to me a couple times...)
It seems we do need to get that reserve bank approval.
They did still want a copy of the license agreement and other bullshit like a business plan doc. I wonder if that is analogous the the 'business plan'. I wonder if I can get away with just explaining it to them, we're not begging for a god damned loan here after all.
Epic has been great so far and has tolerated my requests for new invoices and agreed to wait. I have been keeping them up to date and trying to give them the details of what is happening and what I understand.
On the plus side, the new license terms with Epic mean we have to pay quite a bit less.
Currencies Direct did have to do a Reserve Bank application for us as well, but I can't remember if we paid for that. I don't think so... I also know they only had to do it once and it wasn't an issue. I've paid out several times since then and the only time there's been a problem was when some random bank employee at Mercantile assumed that two invoices for the same amount were duplicates instead of intended for different people. That got sorted out really quickly though, so no big deal.
I literally just calculate how much everyone's invoices should be for, ask people for invoices for those amounts and then send those through to CD. Hope things end up as easy for you as well!
The nice thing about dealing with Epic so far has been that you get to talk to people who can adjust rather than just some enforcer drone that follows arbitrary rules.
He told us we would need to get an importers code. This is the first I've heard of this one.
@LexAquillia tells me we shouldn't need such a thing.
Your bank shouldn't have anything to do with this, because all of them have no idea what you're actually trying to do. Go with Currencies Direct, they get it.
Yes, we are going with CD.
I just added this so it was known here if someone else gets the same story. ;) It's a good deal. They offload a crate of money at the docks and we hand over a flash disk.
To add, though, the guy tried to make the argument that we're importing IP, tech or something from Epic.
Took a while to get reserve bank approval, mind you, and we had to fill out a bit of paperwork... though not nearly as much as I expected :)
I did keep Epic as well informed as I possibly could, and they were very helpful. If anyone else has this kind of problem, this bit is the most important bit!
I'm in the process of getting a CFC account in anticipation of foreign funds coming in, and hopefully being a more regular, so I wanted something not Paypal.
My business banking is with FNB, and I asked them about the CFC. Filled out forms, submitted stuff, and now they're asking me for a Modus Operandi and Agreement.
As I understand it, Modus Operandi is a description of what your business does. Unless there's some kind of special legalese that I don't know about, I can do that fairly easily.
An agreement though, seems to be something that's between your company and whoever is doing business with your company. That seems counter-intuitive as that means every agreement you have with everyone you deal with must be submitted in future too?
Did everyone else who did this run into the same thing? And what were requirements for you? Did I run into something strange?
Not sure about the MO and Agreement, but maybe FNB can give you more information about what they want? Maybe they actually want your MOI and/or Shareholder's Agreement, which are obviously completely different things, but I wouldn't be super surprised if their communication was lacking. They might be asking for this stuff to apply for SARB approval, which is probably a large admin task, but is something CD can do for you as I understand it. If it's for SARB approval, there might be specific requirements that SARB looks for.
We haven't done any of this yet, but as soon as we have the time or it becomes more pressing, we intend to contact CD and see if they can help us with everything we need.
FNB will want a new set of documents every time you try and do anything with your money, especially if you try to pay anyone. They will constantly try to okay things with the Reserve Bank that don't need okaying and they'll want to do that for every potential income source you have. Currencies Direct made one RB application, got the okay and now manage our funds exactly how we want them to. They let me know when a payment comes in and ask what they should do with it and if I send them invoices they pay them. When the exchange rate is good, CD pays directly into our regular FNB account for much cheaper than it would have cost to get FNB to pay themselves.
There isn't even a comparison, talk to Currencies Direct, don't waste your time with FNB.
Seriously, we got paid by Steam in the FNB CFC and they completely freaked out! Phone calls at crazy times of night: "WHERE IS THIS MONEY COMING FROM?! WHAT'S GOING ON? WE NEED TO BE NOTIFIED IN ADVANCE! WHAT AGREEMENT IS THIS UNDER?!" ... No. Not okay.
As for cost for a CFC account, I just started on the process, and it seems like I have to at least pay R1,140 to do a submission to SARB (which may or may not be accepted). Not sure of what the ongoing banking fees are yet, I'll ask further, but if there's really no need to have one, I'm just gonna abandon it.
As for the time being right, that's up to you... It's your money in your account, they just administer it and keep you up to date on rates and the like, so if I want to do a payout soon I'll tell CD and they'll suggest a good rate to wait for (for a day or two, whatever) or they'll say do it now (the rates are falling). That submission fee is bullshit. That's FNB charging you for their time, as far as I can tell. At various points they will want that fee for every transaction you do, for every person you pay, only once ever, once every year/month/week. If you say you're going with someone else the fee will magically drop.
What are you confused about, exactly? There's a lot of info in this thread about getting paid in the easiest way possible. Your goal here should be to emerge with two bank accounts: Your normal one and a new one in USD that you get paid into. Why do you want that second account with FNB, what do you assume the advantage is there?
Also it wasn't apparent that your CFC was not with FNB but with Mercantile - I mean I saw the name somewhere above but it wasn't in the context of "this is where the other account is". So would you suggest going with Mercantile instead of FNB for getting a CFC? Especially since it's loaded with bullshit charges like that R1.1k. You said the CFC account was free - I assumed that it was only free because you took it with the FNB account already in place - so you just went to Mercantile normally and opened up a CFC and it was free?
From what you're saying, it sounds like you seldom interact with the CFC account yourself - so did CD sort you guys out with the CFC account, or did you have it before you interacted with CD? I'm in the process of registering for CD, so if they'll help me then I don't have to worry about that first.
CD set up our Mercantile CFC for us, I didn't approach Mercantile at all. Technically we also have a regular Mercantile account and an FNB CFC as well, we don't use either of them. The FNB CFC was free, as was the Mercantile account AFAIR - those are bank-specific deals though and have nothing to do with each other or CFC accounts in general, so don't assume anything based on that.
FNB wants to charge you to make a Reserve Bank application. That's very, very different to opening a CFC. They'd want you to do the application to pay anyone overseas regularly, no matter what account you were paying from.
But should I proceed with the FNB CFC, can I / should I tell them that I'm not planning to pay people overseas regularly (not to my knowledge right now), and that I should not have to do that application?
Right? :)
Those are actual questions that I don't know your answers to. That's why I asked them. I dunno. You've got the info that worked for us, why don't you tell us what works for you when you know more?
I'll wait for CD to get back to me and see where that goes, if anything new/more/better does comes up, I'll of course share the info, though I doubt there'll be much trailblazing on my part here.
Thanks for the clarifying what I couldn't figure out from the posts here :)