Freelancing has become a mainstay in the present workforce, with more professionals choosing flexible, project-based work. As a business owner or client, it is crucial to pay freelancers wisely, correctly, and promptly to ensure they deliver quality service and help you run your organization efficiently. These days, with numerous payment options available, it’s difficult to decide which one to use. It is a matter of ensuring that the payment method is practical, cost-effective, and easy for the other person, whether they are local or foreign.
Here are the 5 best ways to pay freelancers
1. Bank Transfers and ACH
Banking wire transfers and ACH payments (Automated Clearing House payments) are among the oldest and most reliable forms of payment for freelancers. Bank transfers take funds from your bank into your freelancer’s bank securely, and are particularly useful for payments to be made within the U.S.
Some advantages of bank transfers or ACH payments include security and low transaction fees, especially with larger payments. Some disadvantages include the time required for payment clearance, which can take a few business days. If an international payment, you might incur bank-induced currency exchange rates that accumulate over a long period.
2. Cryptocurrency Payments
Cryptocurrency is no longer a trendy accessory. It’s becoming a mainstream means of payment, especially for freelancers who work internationally. Bitcoin, Ethereum, USDT, and numerous other cryptocurrencies in circulation offer quick payments, lower service charges, and an alternative to traditional banking. So it’s easy to see why they are becoming a growing method of payment.
For freelancers who understand cryptocurrencies, they offer a path to financial independence and flexibility that fiat currencies cannot match. Also, given that the value of the payments made can increase post-payment, it allows both sides to be winners from cryptocurrency investing. Some people might want to get paid in popular emerging crypto with highest potential to see if they can profit from the coin’s increasing value over time.
However, there’s a downside: the exchanges can be somewhat volatile. If you’re comfortable with this volatility, paying freelancers with crypto can be a safe and cost-efficient way to streamline the payment process. Those not comfortable with volatile currencies can receive payments in stablecoins like USDT (Tether), which is pegged to the dollar.
Best of all, many companies are working closely with cryptocurrency agencies to integrate crypto payments into their existing systems, making the process even smoother for freelancers who prefer it.
3. PayPal
PayPal is still one of the best-known payment solutions around the world. This is a very user-friendly and secure solution, making it ideal for freelancers and companies alike. PayPal can be used in more than 200 countries and allows customers to make payments in up to 25 different currencies, including crypto, so you can work with freelancers around the world without having to carry out complicated conversions.
For the best ways to pay freelancers, PayPal also offers a greater degree of security, with its buyer and seller protection programs. PayPal does make a charge for transactions; however, this can be quite considerable, especially in the case of international payments. Still, for speed and global reach, PayPal is a common solution of choice for many freelancers.
4. Credit cards
Credit cards, in particular those offered by payment processing companies such as Stripe or Square, are the usual best ways to pay freelancers, particularly for larger projects. This payment method provides easy payment options for large sums and is an integrated service that can be linked to invoicing software, enabling easy tracking.
The main benefit of using credit cards as a payment service is the speed and simplicity for them, especially for those who normally use online services. Freelance workers, however, may have to pay processing fees. Additionally, when paying for transactions done abroad, they could face differential foreign exchange costs. For companies that frequently make multiple payments, credit cards can also be a good way to receive rewards or cashback.
5. Wise (formerly TransferWise)
Wise is a great option if you’re making international payments to your freelance team. With this service, you can send money across the globe at significantly lower fees than traditional banking, while also getting an excellent exchange rate. This means that both you and your freelance team members can avoid the high fees that often accompany international wire transfer costs.
Although Wise best ways to pay freelancers for international transactions, it does have its drawbacks. One major drawback is that you may need to change currency multiple times before making the final transfer, which could incur extra charges.
