Written by Gystilyn O’Brien. 7/24/19. Published by Content Castle.
Working as a remote international freelancer comes with incredible benefits such as setting your own schedule, visiting unusual destinations, and exposure to new networks and communities. One of the few trials that comes with such freedom is understanding and dealing with currency exchange. If you’ve ever flown anywhere in the world you’ve probably been stumped at the airport, wondering the best way to turn your cash, or cashiers checks, into local currency. You’ve almost definitely had that breathtaking realization that currency exchange comes with some unexpected and steep extra fees. With the advent of globalized banking it’s become easier, and easier, to simply go to an ATM anywhere in the world and simply withdraw a desired amount without too much loss in the way of exchange rates or surcharges. Unfortunately that translation of funds doesn’t always work when it comes to Freelancing. Thanks to such sites as Paypal, and Transferwise, these processes have become easier.
Paypal is one of the most regularly used banking platforms in any remote market. The ability to send and receive money in verified format, with easy access to customer service, has made it a safe place to exchange funds. Online and mobile apps makes instant transactions a breeze. For all that, finding any information on exchange rates and surcharge fees within the Paypal platform is almost impossible. Both Paypal and Xoom, a subsidiary of Paypal, both function under standard VISA/ Mastercard rates, meaning that VISA and Mastercard set the rates of exchange, and also negotiate surcharge transactions. Paypal then adds their own rates on top of that, which become a mountain of surcharges and fees very quickly.
When it comes to exchange rate fee’s changing a euro into a dollar in America has a different set of surcharge fees than exchanging a dollar for a euro in the UK. When you withdraw from an ATM in Mexico with your VISA or Mastercard you may be paying your banks exchange rate and fees, and the ATM’s exchange rate and fees, and also possibly VISA or Mastercards rates. Banking and card platforms will often charge both surcharge fees for both countries, and a transaction fee for the process, meaning at the end of the day that you’ve lost up to 5% of your dollar.
Transferwise, on the other hand, is a platform focused specifically on payments through international exchange rates. Their online and mobile platform is transparent from the start. They explain that their exchange rate is based on google’s exchange rates; they state their transaction fees in the initial currency, subtract that, and then exchange. They carefully explain how their platform focuses on saving you from unnecessary fees. Transferwise has also gone so far as to troubleshoot the differences in their platform against Paypal, and local banks and credit cards, with Consumer Reports. Their detailed research into why they are a better system vastly outflanks any easily found information online regarding Paypal.
Transferwise is verified through Australia, Canada, Hong Kong, Japan, India, New Zealand, UK, EEA, and America, with accessible banks and ATMs around the globe, and debit cards by MasterCard. It was created specifically for the Freelance market with focus in Upwork and Freelancer.com.
Transferwise also offers a Borderless Account which creates an umbrella account with arms reaching into each countries unique sort code or account number. It’s like having five international bank accounts with one single sur-number. This alleviates all exchange rate fee’s as each payment goes through a ‘local’ account, meaning an exchange never happens at all.
Transferwise sounds great. As a Freelancer I’m sold. I do have one problem though. Most of my clients use Paypal and they like it. People like to stay with what they know. This is where Transferwise has won me over. You can transfer payments from Paypal over to Transferwise in the currency paid without going through the exchange rate on Paypal. You can then do the exchange in Transferwise with lower fees.
It’s truly a great time to be a remote Freelancer. Technology access has made getting almost anything done more streamlined, and innovative companies like Transferwise are working to remove the outdated stumbles of narrow access. When there was only Paypal there was nothing we could do when being charged outrageous fees. In today’s growing technological climate there are simply more and better options