What’s the Best Payment Method for Freelancers? (+ Low Fee)

Freelancing is growing rapidly, contributing significantly to economic growth. But it is not easy to handle invoicing and payments.

This is because freelancers work with clients from around the world. And different geographical locations will require specific payment systems.

Nevertheless, there are a plethora of banking options available. However, these payment options operate differently.

So, choosing the best payment method for freelancers can be challenging. You’ll need a service that lets you receive payments and streamline financial management.

The best platforms to accept freelance payments

As a freelancer, once you’ve found your ideal clients, your main goal is to get paid for your services. So, you want the best possible payment methods to streamline your business.

There is no “perfect” solution, and you may need to try multiple payment options to find the one that works best for you.

Nevertheless, here are the top banking solutions for freelancers worldwide.

1. Bank transfer

Direct bank transfers are among the most straightforward payment methods. It is mostly used by freelancers when working with domestic clients. Once you provide your bank account details, the client transfers the money.

Such transactions are reliable and incur no platform or card processing fees. While using this payment method, you can’t send a direct invoice link.

Instead, your client will have to open their bank app, enter your account details, enter the amount, and click send.

When dealing with international clients, this may not be the perfect option for freelancers. The main reason is the slow processing times, due to batch processing and multiple compliance checks. Also, there are no existing means of tracking such payments.

Hence, both the receiver and the sender remain clueless about the payment status and eventual arrival. Generally, bank transfers have lower fees for domestic payments, but higher fees for international transfers.

The fees for offshore payments include currency conversion, wire fees, and other intermediary bank fees.

2. Credit cards

Credit cards are another standard payment method for freelance businesses. It is secure and convenient, but it supports chargebacks in cases of fraud. When using this method, you’ll need a merchant account.

Also, a processing service is required; impressively, many companies, such as Stripe, now offer online credit card processing systems.

Various platforms facilitate swift payment processing and deposit the money into your bank account. With business credit cards, you can separate your finances and gain rewards as you build credit.

Please note that credit cards attract processing fees; this is usually around 3-4%.

3. PayPal

As a familiar payment method, PayPal is widely used by many freelancers globally. It is a familiar interface for clients and independent contractors.

You can find it integrated with many online stores, marketplaces, and even freelance tools. Also, this service is suitable for recurring and one-time invoices.

As a peer-to-peer network, you can initiate payments using the receiver’s phone number, email address, or a QR code. Payment processing with this service is swift, allowing you receive money into your local bank account quickly.

PayPal fees vary, depending on the type of transaction. Generally, international payments attract higher fees than domestic transactions. There is also a currency conversion fee of about 3% above the market rate.

The downside, however, is that it is not a practical option for digital nomads. When you visit a new country, you’ll have to create a new PayPal account, which can be time-consuming.

4. Wise

Wise is a useful option for international clients, helping you receive cross-border payments. Freelancers can use it to get paid in a particular currency and then spend or keep it in another.

Thus, exchanges are seamless, making it an easier and cheaper option compared to traditional banks. Another highlight of this multi-currency account is that users get local bank details for different currencies.

So clients can easily transact as they’re used to with their local counterparts.

Also, this payment service rarely inflates exchange rates, as conversions are set at real, transparent mid-market rates.

It is helpful for folks who invoice in one currency and get paid in another. Furthermore, debit cards are accepted in many regions. This way, you can spend directly from your Wise balances and handle expenses across multiple currencies.

Setting up a Wise account and receiving local payments is free. However, certain fees may apply for international transfers.

5. Paper Checks

Despite technological advancements, many businesses still use paper checks. And, it has been a popular method employed for paying freelancers. This method uses low-tech methods, and transactions are reasonably priced.

It is an effective option for folks seeking to transact with domestic clients. Furthermore, they are a safer option for mailing than cash. It also supports third-party cashing options, especially for people without bank accounts.

Still, this does not appear as a viable option for international payments. Freelancers using this method will have to wait until they receive the checks by mail before cashing them.

And compared to some electronic banking methods, it is not very secure.

6. Venmo

Venmo is another great platform for freelancing businesses. It has a user-friendly interface, allowing you create a business profile in a few easy steps.

And, you can seamlessly bill your clients once you’ve completed the project. Also, this service supports the creation of unique QR codes, easing the billing/payment processes.

You can conveniently use a single app for both your business and personal payments. If you already have a personal account, you can create your business account using the same profile. And, it works linked to a credit card or bank account.

Nevertheless, Venmo is not suitable for international transactions, as it only operates in the US. Furthermore, this financial platform charges both the sender and the recipient.

7. Zelle

Although not an explicit freelance payment option, it is available and can be linked to your US bank account. Zelle charges no transaction fees, but certain fees may apply to business accounts; check with your bank.

With this method, clients only need your email address or phone number to initiate payments. Freelancers receive the money into their local receiving accounts within a few minutes. Signing up is easy; you can do so in your banking app on your smartphone.

However, payments with this method are only possible when both the sender and recipient have Zelle-supported bank accounts. So, you’ll have to check this before using it for domestic transactions.

Also, note that Zelle payments are final and non-reversible. Banks can also set limits on the amounts you send or receive.

8. Skrill

With Skirll, freelancers can conveniently access a receivable account. Thus, payments can be easy and seamless. Independent contractors can send electronic invoices to clients, track payments, and track payments using this platform.

Clients can choose to pay using Mastercard or Visa, ACH bank transfer, or even Paysafecard. But this service charges a withdrawal processing fee that appears steeper ($5.50) than some other methods.

Using Skrill, freelancers can request a dedicated Visa card. Application for this card may cost around $10. Members of this platform also benefit from Knect, a loyalty program.

As you earn points for each dollar spent, you become eligible for attractive rewards and offers. Yet you should anticipate a currency conversion markup.

And deposits may sometimes take 2-5 business days to process. When your account becomes inactive after 12 months, you’ll be charged monthly inactivity fees.

9. Cryptocurrency

While this might be a new initiative, it is fast becoming an adopted payment method for freelancers. It supports borderless payments, allowing partnerships between freelancers and clients globally.

Also, there is little to no friction involved, which may lead to local or international fees. Payments with cryptocurrency are much more secure and offer a high level of anonymity.

One of the greatest reasons freelancers love crypto transactions is their speed. Once payments are confirmed, the funds get transferred within a few minutes. Although mostly free, transactions may sometimes incur minimal network fees.

This is common with blockchain networks like Bitcoin and Ethereum. Then, you’ll be charged for converting from cryptocurrency to fiat. Nevertheless, it remains a solid option, especially if you understand its intricacies and the client is comfortable with it.

10. Integrated platforms

Gig platforms also come with built-in systems for sending and receiving payments. Such platforms, including Fiverr and Upwork, can also handle invoicing.

They also support multiple currencies. Now, this works with an automated system; there’s no need to chase clients for your payments. The platform receives funds directly from clients and then funds contractors.

From there, you can now withdraw to your business account. It is a convenient option, especially when you’re dealing with multiple clients/projects.

Notably, this is a safe option, as gig platforms protect both you and your clients. They also have an excellent dispute resolution system.

But as a marketplace, you’ll have to comply with the stipulated platform fees. Other charges include currency conversion and withdrawal fees.

What to consider when choosing a payment method?

As an independent contractor, you need a reliable and convenient payment gateway. But how do you pick one that suits your needs?

Here are a few critical factors to consider when choosing a payment method.

Security features

Security remains a primary consideration for choosing a payment processor. You don’t want to incur financial losses after all the hard work. So, be sure to select a payment method that prioritizes users’ protection.

Look out for features like SSL encryption, fraud detection software, and two-factor authentication. Also, only settle for trusted platforms that comply with PCI DSS. Such regulatory standards reduce the risk of theft and fraudulent activity.

You can try various trusted platforms like Stripe, which offer excellent security features.

When you decide to use gig platforms, use a reliable option that supports escrow services. This way, the money is held, and you can get it once you reach specific milestones.

Gateway speed

Payment speed is an important factor, as it influences cash flow management. Thus, you must know how quick you can get your money and put it to good use. It’s best to choose platforms with near-instant deposits and withdrawals.

You want to be sure that the money gets to your account on time to cover daily expenses between projects. Such speed should cover both domestic and international payments.

Also, settling for quicker banking options helps build trust and assess the reliability of specific clients.

Notably, bank transfers can be slow, especially when processing international payments. Peer-to-peer platforms like Stripe and PayPal are considered swift for international transfers. But withdrawals may take up to two days to process.

Customer support

Disputes resulting from underpayments or late payments are common in freelancing. Unresolved issues may lead to payment delays. They can even strain relationships between freelancers and clients.

So, you want a banking platform with an excellent dispute-resolution system. A responsive customer support will be helpful, too.

Choose a platform that readily addresses your concerns and offers assistance with currency conversion or cross-border payments. Across popular payment systems, you can find phone, email, and even live chat support.

While email and phone are efficient, live chat support systems respond quickly, within a few minutes.

Fees vs. Benefits

Various payment methods may charge percentage-based or fixed fees for processing payments. As we know, fees quickly add up to your own business costs. Thus, many freelancers opt for payment channels with lower fees to save money.

Yet the cheapest option on the block may not turn out to be the most valuable.

The best way out is to compare the platform’s benefits against the fees they charge. You want to analyze their recurring payment features, speed, tax, and invoicing tools. This way, you can easily balance cost efficiency and choose options with reasonable fees.

At the end, you’ll get your money back and receive great value for the fees paid.

Currency conversion rates

Conversion rates are a critical factor that freelancers must consider when working with international clients.

You want a substantial talk-home after withdrawing the money to your account. Even a minute difference in exchange rates can significantly influence your earnings. Now, different payment platforms have varying rates.

Most of them add markups that exceeds mid-market exchange rate.

So, check and compare these conversion rates across different platforms. Ensure that there are no hidden fees. Then, settle for options whose rates are close to mid-market rates to ensure you retain a fair income.

Clients’ preferred methods

Freelancers are mandated to deliver high-quality projects and ensure clients are comfortable. Now, a smooth contractor-client interaction extends to the payment method you choose. This is especially true for returning clients with recurring billing.

Some clients have their own established systems for transactions. And they’ll always prefer that freelancers use such systems. To reduce friction, ask your clients about their preferred payment methods.

Then, try to align with such preferences to ensure you prevent likely disputes and maintain a friendly relationship.

Invoicing and accounting software

Whether you operate single or multi-currency accounts, effective payment management is essential. It is recommended to incorporate invoicing and accounting software into your routine operations when billing clients.

This way, you can easily track payments, streamlining all payment processes in your business. Software like Bonsai and QuickBooks can help generate invoices and manage financial records.

With such tools, you can ensure that administrative burdens are minimal. Hence, you now have enough time to focus on other important tasks.

Also, automating invoicing and payment tracking reduces the risk of late payments. With improved cash flow, you can handle projects and deliverables more efficiently.

Since most of these platforms are integrated with various payment solutions, they offer greater flexibility. So, you can easily choose your preferred payment method.

Conclusion

Getting paid as a freelancer is the major highlight of this career journey. There are plenty of banking options that you can use, but not all operate fairly. Each payment gateway has its benefits and potential downsides.

It is important to research and try a few options to settle for the best. Nevertheless, your choice will be influenced by various factors.

These include security, speed, convenience, fees, benefits, and even your client’s preferences. Rather than settling for a single payment option, you can have a few handy options. Then, choose each per transaction, depending on the need that arises.