Even before COVID-19 forever changed the world of work, there was a trend toward greater reliance on freelancers. In reality, they now represent 35% of the global workforce – that’s about 1.1 billion people. Unsurprisingly, that number skyrocketed during the pandemic, with 24% growth recorded in a single quarter at the height of the lockdowns.
The benefits of freelance work benefit both the company and the employee. During 2020, 75% of freelancers said their salary had remained stable that year – something many full-time employees would struggle to claim during the same period. In the best-case scenario, full-time employees can be laid off or have their wages reduced. At worst, they could be fired, as the process of finding a new position is slow and difficult. A freelancer, on the other hand, may lose one or two of their highest-paying clients, but finding and onboarding new ones is rarely so difficult.
For their employers, freelancers are often able to deliver consistent results at a significantly reduced cost. Savings can be made on all the expensive perks that full-time employees get, like medical insurance, snacks in the break room, bonuses, pensions, etc. It is therefore not surprising that the gig economy expected to reach a value of $455 billion by 2023.
The biggest savings for companies come when working with international freelancers, with the added benefit of giving them access to a global breadth of knowledge and experience. Those who live in an area with a lower cost of living – like Thailand – can charge less for their services than a Westerner, while still offering good quality and still getting a fair price. In reality, a study found that Western digital marketing agencies can save up to 400% by hiring freelance content writers in Southeast Asia.
Problems arise when it comes to paying international freelancers. It’s not as simple as asking for bank details international transfers can take weeks to deal with – weeks when your freelancer isn’t being paid and will be much less inclined to work. Another solution is needed to enable this lucrative industry.
How not to
There are some pretty well-established methods for sending money overseas, though they have their issues when trying to apply them to a business need, like paying a freelancer overseas. Most notable is the simple fact that they charge a hefty fee for each transfer.
It’s not just remittance companies that add fees. Some freelance websites, such as Upwork, are able to handle the payments for you, but they take a substantial commission from both the employer and the freelancer to do so. Likewise, online payment portals like PayPal usually add a significant cost to send money to an account established in another country. Each of these options may require the freelancer to add additional fees to their invoices to cover the cost of payment, which could drive up the price to the point that using them becomes unprofitable.
How to do
What is needed is a service that will allow employers to transfer funds directly to an overseas bank account, instantly and affordably. Fortunately, fintech has provided such a solution – specifically, those companies like DeeMoney that specialize in cross-border payments and remittances. They are able to handle local currency payments quickly, seamlessly and with low fees.
The main advantage of these companies is that they can help freelancers with relatively few clients to start a business. Some of the previously mentioned options would be somewhat effective and acceptable if working in bulk, but this requires the freelancer to have many high-paying clients, ideally all from the same country. However, this is a relatively rare and absolutely unnecessary scenario for those just starting out. As the gig economy continues to grow, as we said in the introduction, fintech companies focused on international payments are absolutely essential to unlocking the substantial potential value of the industry by empowering micro-entrepreneurs.
Business isn’t just about sending money from place to place, of course, especially when you’re working with a freelancer. Fortunately, fintech companies like DeeMoney provide the tools to power and grow the gig economy.
Of course, not all freelancers work entirely independently. Indeed, a significant portion of the gig economy comes in the form of Uber and DoorDash drivers (or Grab, Gojek, and dozens of similar companies, if you’re in Thailand), Fiverr, Airbnb, Freelancer.com, Upwork and many more. . In such cases, using financial services provided by fintech companies can make things much easier. For example, using a neobank instead of a traditional bank can make the account setup process easier, especially since many small traditional institutions are not supported even on the largest platforms.
In an economy – indeed, a world at large – where the traditional concept of work and employment is rapidly changing, it is no surprise that companies working at the forefront of our understanding of finance have a big role to play. player. In both cases, they are increasingly adapting to the desires of customers, whether it is the desire to be their own boss or the desire for a simple but personalized banking experience.