The best payment methods for teaching online to students in Japan


Japanese learners of English often look to online teaching solutions to brush up their listening skills and practice conversation. This means that any speaker of English can teach Japanese students online providing they have a suitable internet connection and access to the suitable apps.

Online teaching portal sites take care of payment on your behalf, but if you are going to take advantage of matching sites such as SenseiStar for freelance teachers, giving you greater flexibility and allowing you to receive 100% of your lesson fee etc., you will need to negotiate payment terms with your student in Japan.

It is therefore a good idea to be mindful of what payment methods are available in Japan and what options are best for Japanese students in terms of transfer fees as well as other considerations such as the speed and timing of the transfer.

In this article we will introduce the best options for sending money from Japan from the perspective of someone living there.

In order to get an idea how each service works for small payments such as a trial or one short lesson, we tried making payments of JPY ¥2,000 to accounts in the US to compare the rates, fees and transfer speeds.

Note that each person may have his or her own preference as to what payment methods to use and you might need to be flexible. It might be a good idea to request payment for several lessons at a time depending on their transfer preference.

PayPal

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Probably the most well-known option, PayPal offers a very user friendly experience to send and receive money. PayPal has been around for a while now, and while it used to have fairly steep fees for transfers abroad, the competitive landscape has forced them to offer more attractive rates in recent times.

When we tried PayPal, we were given a pretty good exchange rate and it looked to be a quite a good deal.

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However, there was a USD $1 fee on the receiving end, which was not clear when the payment was made. This could lead to confusion when receiving money from students and leave the teacher out of pocket.

Pros

  • Well known and easy to use
  • Transfers are processed instantly

Cons

  • Fee structure is not clear and easy to incur hidden fees

Transferwise (our choice)

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With very competitive exchange rates and extremely low admin fees, Transferwise is great for sending money abroad from Japan. It has been gaining in popularity with the expat community in Japan, but is not as well-know among the native population here as some of the other solutions mentioned in this article.

Transferwise payments are paid directly into bank accounts in over 70 countries, and the most cost-effective way to use this service is by doing a bank transfer to Transferwise, which can be a little slow in Japan. However, instant transfers via card payments are also available for a higher fee.

In order to receive money this way, you will need to give your student your bank details including SWIFT code and IBAN number which you should be able to get from your bank.

When testing Transferwise, we were given the screen below.

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Because the account we sent the transfer from was with MUFG Bank, there was no transfer fee for this service. In the case that the student does not bank with MUFG, they might need to pay a JPY ¥300 fee for this transfer. In this case, it would be cheaper to use the card payment option, which in the example above would have been a fee of JPY ¥138.

Pros

  • Very transparent fee structure
  • Very good exchange rates
  • Ability to pay via bank transfer which some Japanese students prefer

Cons

  • Not well-know in Japan and might take some getting used to on the part of the student
  • When using bank transfer, transfers are not instant and will be processed the next business day if submitted after 3pm
  • User needs to go through verification process before sending payments

Western Union

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Another well-known money transfer service, Western union has a good user interface and a clear pricing structure.

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At first, it looked as though Western Union was the winner in terms of price, however on closer inspection, they had added their fee to the transfer amount, meaning the transfer now costed JPY ¥2,490

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This can be beneficial for the teacher because fees are handled by the sender, but it is important to factor this into your lesson price so the student is not taken by surprise when they see that they need to pay a fee. In any case, Western Union was not as cheap as TransferWise over all.

Other options

GoRemit by Shinsei Bank is another popular option in Japan, but with a flat fee of JPY ¥2,000 for every transfer, it does not make much sense for payment on a per lesson basis. Similarly, the transfer fees of the traditional Japanese banks are very high and we advise staying well clear of those.

In conclusion

If you are going to be teaching many lessons online to students in Japan, agreeing on a money transfer service is a very important step and picking the right one will save you and the student a lot of money in the long run. We recommend Transferwise for this reason.

The fact that so many people have PayPal accounts combined with its user-friendliness make it the most convenient option, but Transferwise is simply cheaper. Apart from Western Union, the other options we tried were not suitable for small payments on an individual lessons basis.

Unfortunately, freelance teachers can only suggest the best payment method and some students might be keen to use what they are accustomed to. Suggesting payment for a set of 10 lessons or so would be a good idea if the student wants to use Go Remit or a traditional Japanese bank.

If you have come across a better deal than those mentioned above, please let us know in the comments!

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SenseiStar.com is a Student and Teacher networking site which connects learners of English in Japan with teachers all around the world.

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