All across the globe, businesses are tapping into the benefits of hiring from a global talent pool through the use of freelancers. Though doing so has countless benefits, including greater ease and the ability to cast a larger net for workers, employing international freelancers comes with its own plethora of difficulties, especially regarding payments. The international freelancers that need to be paid might not use the same banks or traditional payment methods that your business does, which can cause all manner of complications, including extended delays and large transaction and exchange fees.
In this article, we’ll examine some of the most effective ways to ensure your International freelancer payments get paid the correct amount, and on time, while also ensuring both your business and the freelancer themselves are kept safe and secure.
6 Effective Ways to Handle International Freelancer Payments:
1. Be Clear and Transparent
Freelancers need to know a variety of things regarding their payment in order to feel secure in their role. Make sure to keep them informed about the following:
- When should they expect their payment?
- When the international freelancer payments has been sent.
- What currency will their payment be in?
- Which party is responsible for covering any fees?
- Exchange rate calculations.
2. Try Cryptocurrency Payments
Crypto is gaining global popularity at an exponential rate, and there are several reasons for this. Firstly, crypto is a decentralised asset, meaning it doesn’t need assistance or management from third-party institutions, such as banks, in order to function. This is highly useful when it comes to paying international freelancers, as it means that payments can be sent and received in a timely manner with no third parties interrupting the transaction or taking a cut for doing so.
By using encryption technology, crypto is also known to be highly secure, and yet can balance this with transparency due to the nature of the blockchain itself. When transactions are made using crypto, they pass through this blockchain, which is a kind of giant public ledger. Every transaction is visible to every member of the blockchain, allowing for transparency, but encryption means that it cannot be traced directly to a source. As such, if you’re paying a freelancer using crypto, you can create a sense of trust between your business and the freelancer, while still prioritising your own and their security.
Paying freelancers in crypto is also a way to demonstrate that your business is forward-thinking and refuses to be left behind as the times change. Crypto has many uses, from investing in the hope of seeing future strong returns due to the volatility of these assets, to using them for retail purchases or, as eSportsinsider’s analysis demonstrates, accessing crypto casinos and enjoying the fast transaction speeds and low transaction costs that come with doing so. By offering your freelancers crypto payments, you’ll be appealing to an ever-growing number of people who believe cryptocurrency to be the very future of finance itself.
3. E-Wallet Payments
E-wallet payments are also a good option for paying international freelancers due to the fact that they stay the same no matter where in the world they are used. Some examples of e-wallets include PayPal, Venmo and Cash App.
There are several positives and negatives when it comes to using e-wallets to pay international freelancers. The positives come from the fact that these companies are highly secure and well-regarded across the globe. As such, both your business and the freelancer you are paying will have a lot of security and a backup should anything go wrong with the payment. These companies also usually have highly effective customer service workers who can assist with transactions on both ends.
Unfortunately, however, many e-wallet companies charge quite a substantial amount for international transactions as they need to take their cut in order to function as a company.
4. Digital Payment Services (Designed for International Payments)
Luckily, there are several other digital payment services that have been specifically designed for International freelancer payments. As such, these are likely to be much cheaper and much more efficient than regular e-wallets such as PayPal.
Two of the most popular international digital payment services are Wise, which was formerly known as TransferWise, and Payoneer. These companies do still take a fee, but they tend to be much smaller than other services. For example, Payoneer will take 2% of every transaction, or 3% if you are paying with a credit card, which is significantly lower than most other options.
5. Consider Compliance Considerations
In order to make international freelancer payments, your business will need to take some compliance considerations into account. The rules and regulations for your home country may not be the same as those in the country where your freelancer lives, and that is something that should be considered when making payments.
In general, it’s a good idea to educate yourself on local tax regulations for the country you are sending to, along with the currency control laws. It’s also a good idea to see if the country has any worker classification requirements or international payment reporting processes.
6. Security Considerations
All businesses handle financial transactions, whether that be sending funds, receiving funds, or both, and as such, every business should make sure it is putting a lot of attention into implementing security features for itself and its clients. When making International freelancer payments, you need to ensure that the money can be sent and received securely, and greatly lower the risk of hacking or interception of funds.
One way to do this is to consider using multi-factor authentication in order to make business transactions to pay freelancers. This involves needing to input more than a password in order to make a transaction. You might get a code sent to another device that will need to be input, or the system might ask you to pass a biometric scan. Putting these into place is a great way to ensure none of your business funds go anywhere that you haven’t sent them.
Additionally, you could consider sending your freelancers confirmation of payment, especially if they are based overseas. No matter how you choose to pay, there can sometimes be a delay between when you have sent the funds and when they are received. By sending your freelancers’ payment confirmation, you can provide them with valuable peace of mind that they have been paid for the work that they have done.
You should also make sure that your freelancers’ payment details are kept safe and secure and comply with data protection policies. Doing so will keep your business safe from legal action, but will also lead to a deeper level of trust between your business and the freelancers you work with.
Conclusion
Employing freelancers is often a great idea for progressing your business. Doing so allows you to gather talent from all across the world. The positives of seeking freelancers definitely outweigh the negatives, but perhaps the biggest negative comes from navigating International freelancer payments to workers. That being said, taking some time to familiarise yourself with both the different methods of payment available to you, as well as the security concerns that need to be taken into account, is a great way to give yourself a head start and make the process as smooth as possible.
