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As you start your freelancing journey, you will need an understanding of the payment methods available to you. To work for yourself means not only choosing your schedule but also your preferred payment options.
If you are considering growing in the industry you must get familiar with the most popular online payment processors.
You should consider several factors for your payment needs in 2024, such as the applicable fees for you, the level of security the company provides, and the interface.
It's easy to say, a bit harder to achieve, but when you dedicate time to exploring the payment processors' websites, you will become an expert in managing your money soon enough.
In this post, I will introduce you to a list of the best payment methods for freelancers in 2024 that can serve as a guide to deciding when you are presented with any of these options. Keep in mind that depending on the company you work with, you might have different options.
There are even customers who prefer working with a single payment option every time. However, being informed on how to use any of these platforms will get you one step closer to your dream life of ease and home-based bliss.
If you make payments online, you've already probably heard of PayPal and you might even have an account with them. But many other payment companies exist, and it's worth putting the effort to learn and grow in this area.
How Important Is It to Choose the Proper Payment Method?
Money and freelancing are not synonyms, but they are incredibly closely connected. You freelance for the money, and the money gives you freedom to an extent. If you know how to manage money properly, your sense of freedom will increase.
A great factor to consider is how you can save on fees. It is especially valuable to know how to navigate the transaction and currency rates if you are being paid in a different currency than your national one.
Here is an example: if you are paid in dollars, but your local currency is different, it will be wise to keep money in your account online until the currency rate is higher. You will earn from the currency conversion, and the amounts are worth the wait - in some cases, hundreds of dollars.
Since withdrawal and currency fees are different for each payment company, you will need to investigate deeper to find out the best-fitting solution for you. It can increase your hard-earned salary, and it's a long-term investment as you will typically complete transfers each month.
A good payment method will offer you withdrawal fees that are reasonable and additional benefits that you can take advantage of. You can use a debit card or manage several accounts for your salary as long as you save on fees.
Popular Payment Methods for Freelancers
1. PayPal
Here we go with the first company on our list today: the widely-known PayPal. People use it for purchasing products or sending money to friends, and freelancers - for their wages. It's convenient and secure, and it's been for a long time in the market.
Another great benefit of PayPal is that it is evolving together with the online environment. They strive to adapt and adjust their services to the needs of their customers, and they are good at it. It's a competitive company, and in 2024 it is still widely used despite being around for 25 years.
2. Wise (or TransferWise)
Wise is an innovative company (founded in 2011) with a great idea behind its mission:
We believe in money without borders. We’re building the best way to move and manage the world’s money — instant, convenient, transparent and affordable.
~ Wise mission statement
You can do many things with your Wise account, including managing different currencies, enjoying fewer fees, and ultimately living without borders as they state. It's a great idea but is the reality the same as described?
We'll dive deep into each payment processor later in this post, so keep reading! Wise is a great opportunity if it's an option that's suitable for your clients.
Make sure to ask upfront for your customers' favorite money transfer accounts before you fulfill any orders.
3. Payoneer
Payoneer (founded in 2005) is a company newer than PayPal, and older than Wise. They've been around for long enough to establish itself as a trustworthy company with competitive offers for
freelancers.
Using Payoneer comes with fees for receiving funds, and if you use their Mastercard - there is an annual fee of $29.95. It's up to you to decide if this amount is worth the investment.
With a Payoneer debit card, you will no longer need to transfer the funds from your online account to your local bank account, but the fees will be higher. Also, if your transactions include currency conversion, you will be charged an additional fee.
4. Stripe
Stripe is a solution for freelancers and businesses who need to receive a payment through a website or an app. You will need a knowledge of coding or hire someone to integrate with the API for you.
This service is useful for freelancers offering subscriptions to their customers, and once you set up your account with them, you will have access to all their solutions. They also offer no-code options for receiving money which is awesome!
If you are just starting out, keep Stripe in mind, but don't just start on it yet. It's an option more suitable for established businesses, and you must focus on your advertising and gaining credibility for your name before creating an account with this payment processor.
5. Skrill
Skrill offers global online payments and has been around long enough to qualify as an established organization (founded in 2001).
It is popular for its fast payments, convenience, and innovation. They focus on constant upgrading and provide a variety of services.
You can use more than 40 currencies, transfer to your bank account, send money to friends and family, etc. It's one of the options for freelancers who work in any of the countries where Skrill is available.
The company is UK-based, and their fees are quite competitive. On their official website, they neatly present their main services and valuable information for current and future users.
6. Cryptocurrencies
It's no joke, cryptocurrencies are a popular payment method. If you freelance and you wonder whether to be involved in this type of payment, it can take some time to prepare.
You should research the type of cryptocurrency, the wallet and how to use it, the conversion rates, etc. As the rates of Bitcoin and other cryptocurrencies fluctuate, you can't have a particular expectation about the final amount you will receive.
But if you already have a wallet in cryptocurrency, then you probably know some of the basics, and this might be a good match for you to receive your monthly amounts.
PayPal: Pros and Cons
Advantages of PayPal:
⇒ An established company with a great level of security for your account. Although people have tried to steal data through email spoofing, if you strictly follow security guidelines, your account will be safe.
⇒ Reasonable fees - even though PayPal is far from the cheapest option out there, it offers competitive pricing and even free services (opening an account is also free).
⇒ Widely popular - many companies and clients prefer working with PayPal and trust the company for their transactions. You will come across them in your work.
Disadvantages of PayPal:
⇒ Complicated way of presenting the charges - if you look at
PayPal's Transaction Fees page, you will see a long list of many different tables. Understandably, they offer a wide variety of services for many countries, but the way they represent and explain the information could be optimized and made simpler.
⇒ Issues with the verification process - users online have reported they've experienced a long and unnecessary difficult verification for their accounts.
⇒ Poor support system - if you experience any issue, it might be difficult to get the answers from them as they advise you to go through all the documentation they have on the topic before trying to call them.
Reading a bunch of information, however, cannot help if you have an issue that requires their action or further investigation.
Wise: Pros and Cons
Advantages of Wise:
⇒ Cheap option compared to competitors - they offer dynamic fees depending on your spending habits, and the account creation is free of charge.
⇒ Holding different currencies - it's a unique benefit the platform offers, and if your work is related to multiple currencies, Wise is your best option out there.
⇒ Easy to understand fees and pleasant interface - the company put a lot of effort into creating helpful articles and presenting them in an understandable way to their users. It's a pleasure using this payment method.
Disadvantages of Wise:
⇒ Fees can be bigger if you make a lot of transactions for high amounts. If you are earning more and want to receive more money from an ATM, for example, the fees for you will be increased.
⇒ Not so popular as a payment option among companies providing work from home. If you work with clients or firms that prefer a specific payment service provider, they usually choose PayPal or Payoneer.
Payoneer: Pros and Cons
Advantages of Payoneer:
⇒ Convenient and globally popular payment system - Payoneer is widely used by many
remote job companies and freelancers around the world. It's a known and established payment service provider with a pleasant interface to easily navigate your transactions.
⇒ Affordable fees - even though they charge for receiving funds and currency conversion, they remain competitive regarding fee amounts.
⇒ Debit card - one of the great features Payoneer offers is a card that you can use in your country or online to make purchases. It's a convenient way to use your money without having to transfer it to your bank account.
⇒ Quick payments - you will enjoy accurate and timely transfers from and to your account. It typically takes just a day or two (working days).
Disadvantages of Payoneer:
⇒ They are strict regarding rules - the company will require you to provide documentation to verify your account. Especially if you receive more money from different sources.
⇒ Users report that their accounts were frozen - Payoneer may lock your money into the account until you provide the required documents to prove your identity or any date they request.
⇒ Payoneer has withdrawal limits - Even though you might not earn as much at the beginning of your freelancing career, once you grow, you will need higher limits. Here is what they officially state about this matter:
You can make up to 30 withdrawals daily with a $5000 Daily limit. You can make up to 30 point of sales transaction daily with $2500 daily limit.
~ Payoneer's official website
Stripe: Pros and Cons
Advantages of Stripe:
⇒ Great security - the customers of Stripe trust the company for providing safety and securely managing their payments to ensure smooth transactions. It's a widely-known platform for the fact they can be trusted.
⇒ Easy integration - you have many features, and Stripe's services can help you manage the financial part of your business depending on your preferences. They have a wide network of customers around the world.
⇒ No-code and low-code solutions - they offer an option for freelancers even if they are not familiar with coding. You can still benefit from this payment method even if you lack the technical knowledge to integrate with them.
Disadvantages of Stripe:
⇒ High fees - As a freelancer wisely managing their income, your aim when you choose a payment method will be to get the lowest fees and the quickest payments.
You must evaluate if other features of this company are irreplaceable for you, otherwise, it's best to go with a lower-fee payment processor.
⇒ Some features require coding knowledge - If you are good at coding, you will set up your account and subscriptions quickly and efficiently. However, if you are better in a different area, you will need extra help.
⇒ Their services are currently available in 46 countries - which means that if your country or your clients' are not among these from their list, you can't use the service. They state they will expand in the future but until then, you should use another payment service.
Skrill: Pros and Cons
Advantages of Skrill:
⇒ Fast payments - They claim their transactions are instant. This is an incredible advantage as most people will prefer to have their money without waiting.
⇒ Supporting many currencies - the more currencies are supported, the more reach you will have as a freelancer. With more available features to you, you can expand and reach clients from different locations.
⇒ Cryptocurrency support - you can buy cryptocurrency with your Skrill wallet. Note that this is a feature that other payment processors like Payoneer do not offer.
Disadvantages of Skrill:
⇒ Transactions for gambling websites - Skrill offers online betting and it is a payment option for many casinos online. This can make it an unsuitable option if you have strong views on this sector.
⇒ The verification process is long - to have higher limits on your account, this payment provider requests verification in several steps. You will need to download their app on your mobile phone to speed up the procedure.
Cryptocurrencies: Pros and Cons
Advantages of Cryptocurrencies:
⇒ Innovative and modern payments - cryptocurrencies are relatively new and interesting. You can fully enjoy and learn more about the whole process just by having them in your wallet.
⇒ Potential higher earnings - it's possible that you earn a lot out of your investment in cryptocurrencies. If the risk for you is justified, give it a go.
⇒ High security - you can rely on the fact that your income is protected and safe. Your account is accessible only to you whenever you need to check on your funds.
Disadvantages of Cryptocurrencies:
⇒ Risk involved - since the rate of cryptocurrencies fluctuates, your earnings will vary. You might end up earning less than expected if you urgently need the money and withdraw it at a low rate.
⇒ Some clients will refuse to use it - you can offer it as a payment option, but some customers will prefer other methods. If cryptocurrencies are your passion, it's worth asking firms and individuals you work with whether they accept it.
⇒ Complicated to understand - If you've never worked with cryptocurrencies it will take a while until you find out how to navigate and operate with your wallet.
What to Consider While Choosing a Payment Method?
When you decide which payment method to use, consider the following factors:
1. All types of fees: They apply in many areas with the most important for you: currency conversion fees, transaction fees, withdrawal, and fees for receiving funds.
If you receive your salary in US dollars and you are in the United States, then currency rates will not apply to you. But for countries with other local currencies, it's a very important fee as it can increase or decrease the final amount to receive.
2. Security level: When it comes to money, the better the protection, the more relaxed you will feel. Make sure you create accounts with reputable companies that are transparent about the security measures they take to protect your data.
3. Speed of transactions: Imagine you request a withdrawal from your online payment account, but you wait for many days until you receive the money. Choosing a payment processor that quickly completes your transactions will allow you to complete your personal payments timely.
4. Personal convenience: Do you find the interface easy to use? Can you navigate your payments from a mobile app on your smartphone? Do you feel you can trust this particular payment company? How does the company handle different currencies?
When you answer these questions sincerely, you will understand the level of convenience it offers.
5. Customer support: Is there always someone available from the company to help out with technical issues?
Can you rely on them to solve the problems that arise with your account? What do other freelancers say about their experience with the payment method?
Many issues require the involvement of the staff and you will need their support to be quick and efficient. Since delays happen, it's best to research the customer support matter and how different processors handle their customers.
Knowing what to look for will help you make an informed decision about the best method applicable to your situation. Keep in mind the points above when evaluating the best option for your needs.
Conclusion and Final Thoughts
As we explored the variety of payment methods available online, you can see that options are available for any need.
When you make your final decision, your top considerations should be the fees, the speed, the security, and the stability of the payment method.
Make sure it's convenient to use, and that you thoroughly explore the features you're interested in. That will make using your preferred payment processor easier in the future.
In some cases, if you freelance for established companies who work with a single payment option, you will save yourself the research and go with what they offer. But when you grow in freelance, you will come across various situations and it's best to be prepared.
Each payment service provider is unique in its way of dealing with money and customers but if you choose an established one, like those in the list above, you will be successful in your money management efforts.
If you are looking for effective ways to manage your money, check our
Great Finance Apps for Freelancers post, and learn how to be better at organizing your income streams.
