One of the most difficult situations a freelancer can get into is getting paid or getting paid on time. I have had my share of the blues when it comes to payments from clients especially when they are based abroad. I had been duped twice by a French and Australian clients. I wasn’t paid the balance by an American and wasn’t paid full by a Filipino-American. These are just some of the risks that you have to face if you’re doing freelancing projects for overseas clients. But of course, the risk is also there on the client’s side. My best guess is that, the ratio is higher for clients who are hoodwinked by “fly by night” freelancers.
Freelancing operates on a trust basis. Both are expected to honor what has been agreed, at the outset, the terms and conditions of the project. But what is most difficult is to enforce is the agreement itself. Any of the parties can dodge his commitment anytime when he or she feels like doing it. The very reason – you cannot sue a client or a freelancer for not doing his part because both are many countries apart! In this case, prudence is your best ally.
If you’re a client who seeks the services of a freelancer or a freelancer who would like to try doing projects for clients overseas, it’s always best to use a freelancing platform or a freelancing site. This will ensure that the parties in the project are acting in good faith. What it does is that a client announces a project in the platform along with the specifications of the work. The announcement can be viewed by freelancers from many countries and may bid to take the project by submitting a quote or portfolio of past works. Once a freelancer has been chosen, the client’s payment is escrowed by the freelancing site and as soon as the project is completed according to specs, the site sends the full payment to the freelancer thru his Paypal account.
But there are clients or freelancers who do not want to go through a freelancing site like myself. This happens when you and your client are already satisfied with each other. However, whenever a new client comes to you, don’t take any chances. In my case, I usually ask them to sign up to a freelance site for protection. There are many freelancing platforms that you can find in the internet. The two most popular I know is getafreelancer.com and oDesk. The latter is my new favorite because of their payment scheme.
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Let’s talk about payment system. Transactions between a client and a freelancer are usually done through Paypal. Sometimes it can be done through bank transfers. Paypal is by far better than bank transfers. But there is one thing I hate about Paypal – it’s expensive and takes time for the transferred money to get credited to your bank account. It is also a problem for freelancers who do not have credit cards as Paypal would only allow you to create an account if you have a credit card. Most freelancers do not have access to the credit card system as they are not employed nor have a formal business.
The oDesk system does a better job. Payments can now be sent directly to the freelancer’s bank account. Which means savings on conversion cost, transfer cost and such other costs related to the remittance. “Traditionally, it has been difficult for workers around the globe to access their online earnings. High-cost bank transfers, capped deposits and reliability issues around transferring funds have hindered companies from tapping into the global talent pool, and workers from collecting earnings from the tens of thousands of opportunities available outside their local area. With oDesk’s new withdrawal methods, contractors’ earnings are deposited directly into their bank accounts, in their local currency, at a fraction of the cost of a traditional wire transfer. “said Gary Swart, oDesk’s CEO.
"Payments on a global scale are an immense challenge that, if simplified, can drive commerce and development across the globe, I have noticed how hard it is to find a real multi-currency disbursement solution that is cost effective and efficiently handles multiple currencies, and it seems like oDesk is making a material step in that direction." said Ohad Samet, VP of Analytics at Analyzd, an analysis firm specializing in payments.
The benefits of using the oDesk system is that it has low-cost funds transfer or for as little as $0.99 per transaction — and foreign currency exchange rates are competitive than with most other international payment providers. It is convenient because the withdrawal process allows earnings to be transferred directly into local currency, without intermediary banks or external account setups. It is reliable and safe account access, with no third-party payment providers. Contractors will enjoy unfettered account access, speedy payment, and reduced fees. They also have this “Free first withdrawal”. The first withdrawal using one of the new International Payments options is free.
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