This article is about Transferwise for freelancers: I know many of us freelancers are complaining about the fees on our work from third party companies like:
- Upwork project fees
- Fess for more Upwork connects
- Paypal’s transfer fees
- The exchange rates between currencies (Paypal I’m looking at you)
- Bank wire fees
- And so on…
There are many options to get paid as a freelancer. And there is no reason that we should ignore international clients and great projects from overseas because it’s a bother to figure out the transfer stuff.
Often you’ll see advice for freelancers expecting the client to pay the transfer fees. That might be how some freelancers do things but you and I know that by being an exceptionally helpful freelancer, we can reap the rewards many times back.
Both in terms of higher freelance rates, more projects, and referrals so we don’t have to go out and hunt other projects. In reality, we as freelancers benefit from making invoices and transferring our fees easy to do for our clients.
Don’t make them do the extra work of figuring out how to pay you in your local currency, what the exchange rate is, or any of that nonsense.
Bill them in their currency, with their preferred method of payment if at all possible and include the transfer fees in your fee. That way, when they pay your invoice, they know that that is the final number they are paying and it helps give peace of mind. They don’t have to think about anything else.
These days, tech is pretty advanced in terms of options available to get paid internationally. But the business or market circumstances still don’t make it that affordable to transfer money. I’ve frequently been paying $50-$100 to receive my fees + exchange rates.
It’s annoying but most freelancers make far too big a deal out of it. It isn’t going to make a difference long-term and if we instead go get a new client that is far more valuable for your freelance business because we can only save so much.
However, there is a new kid on the blog that I like.
My experience with Transferwise as a freelancer
I’ve found that Transferwise is much cheaper than other options like Paypal and I usually pay somewhere around 5% with Paypal (and sometimes even for wire transfers too) and 1% with Transferwise.
The reason I love Transferwise is different. The bank system as we know it is extremely outdated and follows too much bureaucracy.
There are a few banks that are trying to change it and that is awesome. But I guess most banks focus on large B2B customers because that’s where the money is (and who can blame them) but that still causes a lot of unnecessary annoyances for us freelancers.
There is always extra paperwork, some unexpected problem, or an outdated online banking system that makes it a pain to transfer money not to mention the random fees they charge.
And don’t get me started with online services like Paypal where you risk having your money frozen for no reason (google it) and customer service doesn’t care.
Transferwise doesn’t have any of that. I wish I had taken a screenshot because the other day I sent a transfer across borders in two currencies in 11 seconds(!). I didn’t believe it, so I checked the other account immediately and the transfer was already there.
It feels like this is one of the few times that there has actually been a meaningful technological advancement in finance that benefits us, freelancers.
You can have different currencies at the same time. For example, I had one client pay me in Euros and another in US dollars.
I simply opened a mini-account only for Euros with its own bank details so to the client, it is like sending money to a friend in the same currency but the money is instantly in my Transferwise account.
Then I did the same thing for another client in the US. After receiving the money I transferred it to my “real” business bank account and it updates Xero (my accounting system).
They even have a debit card that I like and so far it has worked flawlessly.
The reason Transferwise can do all of this voodoo is that instead of having someone transfer money across borders to another (which is expensive), they match people transferring money they “opposite” way and even them out. That way no money actually crosses the border and it saves a ton of fees.
For example, if James sends Lisa 100 Euro to USD and John sends Emily 100 USD to Euro, those two would be matched up in a way that James would actually send the money to Emily and John to Lisa.. but without all the annoying coordination.
It sounds complicated but it isn’t and it’s all automatic. The point is that the currencies don’t get exchanged across borders but rather matched up with others making a similar, opposite, transfer.
It sounds like you can get stuck if there isn’t someone else making the opposite transfer as you but that isn’t how it works because it isn’t peer to peer.
Transferwise for freelancers on Upwork
Does Transferwise work with Upwork?
The downside of Transferwise for freelancers
The only downside I’ve found so far is that if you want to send money (the owner of the Transferwise account, not your client), you’ll have to create the transfer in Transferwise and then send the transfer from your bank because you’ll need some details for the system to understand which transfer is yours.
It’s easy to do and doesn’t take much time but I feel like I should let you know about it. It’s a pretty tiny downside to a lot of benefits, so it doesn’t bother me.
Are you using Transferwise? What has your experience been? Comment below.