Freelancer payment methods
Why are freelancers' payment methods important?
Freelancers cooperate with a number of customers – individual entrepreneurs, self-employed people, and legal entities. This implies certain challenges in payments, for some of them want to avoid huge commissions, others want to keep running their official accounting, and another part is afraid of fraud. That is why freelancers may face some issues while choosing the appropriate payment methods to get paid for their service and this is what freelancer payment methods are for.
The best freelancer payment methods
Working online, it’s important to understand the ways to settle accounts with a customer and which payment systems are more profitable to use. Sometimes the chosen payment method may even determine whether the customer will work with a certain freelancer or choose another contractor who uses a more convenient form of accepting payments. Here are the most used ways to pay out to contractors and options that are considered to be the easiest payment methods for freelancers.
The most accessible and obvious freelancer payment method is a transfer to a bank card. In this case, the money goes directly to the performer, which allows the freelancer to immediately use the funds received without addressing auxiliary services. The transfer can be made via the Internet, ATMs, banks, and terminals.
This method is fast and usually implies low fees, but it also implies sharing the credit card data, which may be inconvenient.
This option is pretty simple, straightforward, and also widely used for remote work. The contractor provides the customer with a billing account number or a link to get paid. Having received the money, it’s easy to withdraw it in any convenient way: to the bank card, to another bank, to digital wallet, payment service, or even to the individual entrepreneur’s account.
By choosing this variant, freelancers will probably have to incur commission costs to withdraw money. But making payments to e-wallets is very convenient for customers, it is one of the easiest payment methods for freelancers.
Electronic payment systems
One of the most convenient ways to pay out to contractors due to its global availability. The most widespread systems are PayPal, Skrill, and Payoneer. Electronic systems allow clients to pay for the services of freelancers almost all over the world, including payments in foreign currency. Such transactions are processed within a few seconds and are considered to be safe. Using these methods, the money can be transferred to any bank card, account, or mobile phone number.
As with almost any payment option, paying via electronic systems implies certain drawbacks. For instance, these systems charge commission from the payer. The amount usually varies from 0 to 4%, but it’s a plus that information about the commission is available before the payment is made. Also, to work in the system, each participant must undergo the data verification procedure. It guarantees security but complicates and slows down the whole process of using the system.
Sometimes the users of international payment systems can face unreasonable failures and account blocking. After that many users lose confidence and stop using a certain system to get paid for their work.
Other payment options
Bank check & bank account transfer. This method is quite reliable and secure. Still, it bears certain inconveniences. For instance, crossborder payments settlement may take up to 5 days.
Payment transfers systems. Paying out through such systems guarantees security and doesn’t require opening a bank account. But for the transfer itself and for withdrawal, you will need to contact the office of the systems with an identity document.
If a customer is an individual entrepreneur and makes a payout from their current account, they may need a contract with a freelancer, a billing invoice, and an act. In this case, not every individual entrepreneur will agree to work with a freelancer if they are not registered as individual entrepreneurs or self-employed.
Tips for freelancers
Choose thoroughly. Explore the available options in your region and some international ones to choose the best freelancer payment methods. Decide on geography and commissions you can afford. Ask your colleagues or read some articles in freelancers’ communities – what payment options do they use?
Having several options to offer is a good idea. If you work with a variety of local customers and serve some abroad – be ready to offer not only local payment options. For instance, you may offer a bank card of the country you live in and an e-wallet for those abroad. Offering too many options may lead to confusion, but having only one in stock you’ll end up losing certain clients.
As a rule, the method of transferring money is negotiated in each case individually. A freelancer may prefer one payment option, but their clients may prefer other options, currencies, or just value other nuances. So, it is worth considering different methods to be ready to offer an alternative to the customers or companies that hire you for some projects.
It is not a must to use all payment systems at once, but knowing about their existence won’t do any harm. A freelancer who takes into account their clients’ values and preferences and is ready to adapt to the way of work convenient for both always evokes sympathy, trust, and a desire to continue cooperation.
Corefy’s options to help
In case your business often works with contractors, you may face certain difficulties in payouts. We have developed a solution to give a hand. Payouts by Corefy allow businesses to take full control of payout flows and bring more consistency and efficiency in them. A wide range of payout methods are close at hand – connect them into your payment dashboard in several clicks and start paying out to your partners or freelancers in any country and currency in a snap.
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