Nearly one out of four Europeans is working independently. The number of freelancers has increased from just under 6.2 million in 2004 to 8.9 million in 2013, making independent workers the fastest-growing segment in the European labour market.
The new sharing economy worker is not working a 9-5 job in one company. The trend is pronounced in the Millennial generation, where the idea of working on multiple projects on a gig economy platform is an attractive one. And for good reason. Through these platforms, freelance workers have access to a cross-border, global pool of relevant jobs, with maximum location flexibility.
While freelancers have emerged as able entrepreneurs, tapping into the rich pool of resources available to educate and market themselves, there is one area of their online jobs that they aren’t paying much attention to, and one that is critical to their earning potential on platforms. The area we’re talking about is payments.
Freelance workers with high earning potential who are up-to-date with the latest skills and technology still often lack an understanding of the new payment options now available to them. Most are still opting for e-wallets and wire transfers for cross-border payments from overseas employers. These transactions are ridden with hidden and exorbitant fees and inexcusable time delays that can erase a significant portion of their earnings.
Here’s the truth about payment technologies and what must be considered by freelancers receiving cross-border payments:
- International payments can be complicated: When it comes to global money transfers, compare payment options available to you. Hidden costs that can be quite excessive, typically including both processing and foreign exchange fees.
- Know the fin-tech available & demand it: There is technology available today that can process near-instant global payouts with transfer times often in minutes – not days, like traditional payments methods. Freelancers should seek out efficient payment options from platforms and employers.
- SWIFT Wires, prepaid cards and eWallets are no longer the only or most efficient ways to get paid: Pioneering cross-border payments networks like Transpay offer instant, direct-to-bank or cash pick-up payouts in local currency through a robust network of banks and payment providers.
- Security should be a high priority: Payment transactions must be secure and should not require releasing private bank information to your employers or a platform.
- Efficient payout systems are not just for platforms processing billions in payments: If you are a freelancer hiring other suppliers for your projects, your small businesses can take advantage of the advances in payout products, for instance, by using Transpay’s ‘Pay-by-email’ system launched in February of this year. Senders (both platforms and small business owners) can initiate a payment through Transpay’s interface using only the receiver’s email address and mobile phone number. The Transpay platform then sends a text to the receiver requesting bank details or offering a cash pickup option.
Choosing the right payout option can drastically increase the earning potential of platform and on-demand workers, and education on this subject is critical. of As the gig economy adoption widens, policy makers, freelancers unions and freelancers themselves have an important task that is the need of the hour. They must all contribute to create a robust work ecosystem that aims to bridge shortfalls, maximize worker protection and contribute to economic and stability to a growing class of independent workers who are important aspect of our social fabric — and efficient, cost-effective payments are a key part of the ecosystem.
About the author:
Nagarajan Rao is a Fintech executive specializing in the high-volume, low-value payments industry. As the Senior Vice President and Head of Transpay, Rao is responsible for the overall leadership, strategy and execution of Transpay, a cross-border payment service focused exclusively on B2B/B2P transactions. In his role, Rao spearheaded the development of a robust, end-to-end global payments platform, creating a technology infrastructure capable of moving large volumes of transactions in a secure and compliant manner.