Since 2014, the number of freelancer workers has increased significantly. Today, we have over 59 million individuals doing freelance work in the US. We expect this number to grow even further in the next coming years. Because of the rise in freelancers not only in the US but around the world, clients require effective and secure payment methods.
But the upsurge of digital payout methods and blockchain payroll systems makes it hard to choose the best solutions. There are several important aspects that you should pay attention to when choosing a payment service. One of the most basic is security.
Not all modern services are equipped with this, at first glance, the most important need when working with money. The second aspect is fees, each service has its own peculiarities of charging transfers or deposits.
And the third, of course, is convenience. Due to the fact that there are quite a lot of payment options, not all of them can be used by a freelancer, so his preferences should also be taken into account.
And now let’s start reviewing the most popular services.
PayPal is the most popular digital payment method in the market. It features over 270 million active users, supports 25 currencies, and operates in more than 200 countries. Clients who use this payment service enjoy buyer protection services. So, if the freelancer doesn’t deliver on his promise, you can ask for a refund.
Besides that, it’s easy to set up an account, and payments get processed within minutes. However, freelancers from Asia and Africa usually pay higher currency conversion fees. As a fact, they often end up losing 5% of their earnings.
Hubstaff is a three-in-one app that helps clients track freelancers’ time, determine how much they owe them, and process payments. The platform’s automatic payroll function works with PayPal, Payoneer, and TransferWise. You can also use the feature to add new freelancers, set their pay rate, and issue them with payment.
What’s even better, clients can activate timesheet approval. This way, they can review the freelancer activity before sending the payout. However, you must pay a monthly fee of $10 to enjoy all these features and others.
Paying over 30 freelancers via PayPal can be time-consuming and overwhelming. But with the help of a crypto payroll solution like paymentx.io, you can process payments with just one click. PaymentX is perhaps the best crypto accounting software for small and large businesses. It allows these organizations to access global freelance markets. Since cryptocurrencies are effective, clients can pay employees quickly and securely.
4. Physical Check
Most organizations still send checks to their freelance employees biweekly or at the end of every month. However, this payment method comes with several downsides. The check might get lost, stolen, or damaged, meaning the freelancer might not receive his payout.
Also, the client’s personal information might fall into the wrong hands. Furthermore, most international freelancers avoid getting paid in foreign checks. That’s because they can incur fees when cashing the check.
Accounting software like QuickBooks does more than track income and expenses. You can use the QuickBooks payroll service to streamline your freelance employees’ payments. What’s more, you can access all payment information to simplify the tax filing process. Clients can also integrate Hubstaff with this accounting software.
This allows them to automatically or manually track freelancers’ log time and process payments. But keep in mind, you might need to pay a particular monthly fee depending on your QuickBooks account.
Payoneer is among the top digital payment platforms for freelancers. The platform is secure, fast, and flexible. It supports mass pay, meaning you can pay more freelancers in different countries with ease. Established in 2005, Payoneer has spread to over 200 countries and now supports over 150 currencies.
It also charges clients and freelancers low fees. However, freelancers from Asia or Latin America will incur higher currency conversion charges. Overall, Payoneer is reliable and processes payments much faster compared to other platforms.
Wise sound might sound like a new payment service, but it’s not. Perhaps you are more familiar with its previous name, “TransferWise.” Founded in 2011, TransferWise changed its name to Wise in February 2021.
The platform stands out because it allows batch payouts. Clients can pay up to 1,000 freelancers simultaneously. What’s more, they don’t have to incur exorbitant fees. The freelancers also receive payment in their currency, even if you send the money in your currency.
Created back in 2009 as a startup, Venmo is now a widespread payment system with about two million users in the United States. Venmo is a peer-to-peer payment platform that is better used as an online wallet. Venmo is popular with millennials, which is probably one of the reasons why the service is filled with social media tools.
To get started, just sign up via Facebook or email. As soon as you top up your balance, you will be able to send payments to your freelancers, by phone number, or by the user’s QR code. Of the disadvantages, the service is available only within the United States, and the commission is 3% when paying with a credit card.
9. Wire Transfer
Wire Transfer might seem like your last option because of the endless list of digital services. However, it’s still an effective payment method because of several reasons, including:
- Supports international payment, but you might incur expensive processing fees.
- It’s secure.
- Payments get processed very first, particularly if the wire transfer is domestic. For international transfers, freelancers might need to wait for several days.
Clients who wish to send huge amounts of cash will benefit a lot from using this payment method. But chances are, they can’t send all the money at once since freelance workers usually require upfront deposits.
As you can see, there are several payment methods for digital nomads. Perhaps the best is PaymentX since it leverages the power of blockchain to process payments quickly and more securely. And due to the reduction of intermediaries, at the moment it has a minimum fee. However, all the other solutions mentioned here deliver amazing performance. So, select a payment method that better meets your needs.