This article provides a guide on payment methods for freelancers in Africa, what to look for when choosing a provider, and most importantly, our recommendations. Freelancing has become extremely common with skilled workers finding work online and being in contact with clients directly. Financially, it makes sense as well. When you work a 9 to 5 job, your earnings are limited, growth is slow and learning becomes stagnant. Given the choice between both options, freelancing seems a lot more lucrative.
Working with clients directly can give you learning opportunities, it doesn’t put a cap on your financial earnings, and best of all, you’ll be working to realize your goals. On the contrary, when you’re working a 9 to 5 job, you’re working to realize someone else’s goal. The economy these days is also referred to as a gig economy – indicating just how important freelancing is.
Whether you’re working a job, freelance, or both, you need secure payment. Getting paid on time, with fewer service charges and fewer complications is probably our biggest concern when it comes to earning money online.
International payment methods are important for freelancers since they rely on these to securely receive the payment for their hard work. Several platforms allow skilled workers to find employment online such as Upwork, freelancer, and Fiverr. These platforms have boosted freelancing all over the world.
In Africa, much like the rest of the world, the race to get traditional jobs have halted for the better. Research in 2018 showed that Africa has a little over 10% of the entire world’s freelancers – this must be higher in 2022.
In this article, we’ll compare different options that African freelancers have, and we’ll recommend the best payment method for freelancers
Let’s get started!
Important Considerations
Before we begin with our list of international payment methods, let’s look at some important considerations that affect the payment method choices.
Transaction Fees
Every time you receive a payment from the payee, you are charged with some sort of transaction fee. This fee can vary based on the different platforms you use. It is important to compare the transaction fee for every platform we compare to find the ones that charge less money on transactions.
When you’re working with individual clients, transfer charges are usually covered by the client; however, that’s not always the case. If you’re stuck with paying hefty transaction charges, you’ll lose a lot of money before the amount reaches you.
Big platforms usually charge outrageous fees which can be attributed to their brand value as well. However, we’ll give a fair comparison for you to decide which platform works the best for your needs.
Further, when using Upwork, for instance, you’re required to pay 10% to 20% service charges along with a fixed $0.99 withdrawal charge as well. This cuts down the amount of money you can earn. Here, choosing the best payment method for freelancers which is affordable, secure, and quick is the best way to go.
Country Availability
In this article, we’re solely focusing on the payment methods that are available in Africa therefore, checking availability is important. All of the compared payment methods are working in Africa and you can use these to receive your international payments.
Processing Time
Ideally, you want your money to arrive as soon as possible. Having many hurdles in the process can delay the whole transaction. Due to many third parties involved in the process, foreign payments go through many phases and policies that are pertaining to the sender’s country and receiver’s country. Short processing time is one of the most important considerations in this comparison.
Convenience
User experience is important in almost every service we can think of. Similarly, payment platforms should have an easy-to-use interface and quick navigation. We will consider everything from creating your account to receiving your payments. Having a simple process can help save the recipient’s and payee’s time.
With that out of the way, let’s begin.
International Payment Methods for Freelancers in Africa
PayPal
PayPal, established in 1998, is the oldest online payments platform. It now serves over 200 countries and freelancers all over the world have used this platform to receive payments to their respective countries. Currently, PayPal is being used by many websites, freelancers, e-commerce stores, organizations, and individuals to send and receive money online. Since the money transfers are electronic, they are processed instantly. Upwork, Fiverr, and Freelancer.com provide the option for money withdrawal through PayPal as well which shows its global reach. However, let’s take a look at the pros and cons of PayPal when it comes to the African market.
Let’s look at the pros and cons of choosing PayPal.
Pros
- One of the best features of PayPal is anonymity. When receiving payment, you don’t need to disclose any unnecessary information such as your name, billing address, or bank account number. All you need is your email address and your clients can wire you the money easily.
- Since PayPal is available in 200 countries, its customers are literally all over the world. In terms of currency support, PayPal currently supports 25 major currencies.
- PayPal is trusted by senders and receivers because of the end-to-end transaction security it provides.
- The money transfer process is completed in a few minutes. This kind of transaction speed in the money transfer industry has set a benchmark for all other competitors as well.
Cons
- PayPal in Africa is not the best option since it lacks transparency in the payment process. Transparency is an important factor since users want to see whether they are paying any hidden costs or not.
- In Africa, PayPal has been accused of banning freelancers’ accounts without any notice or cause. This adds to the troubles that freelancers already face in terms of getting paid.
- PayPal isn’t suitable for everybody. For most Asian and African countries, there are several other alternatives available that are cheaper and secure.
- PayPal offers instant transactions. However, if you’re looking to withdraw money, it can take up to 10 business days for the process to finish.
- Freelancers should pay a transaction fee of 2.9% along with a fixed charge of $0.30. This transaction fee is too high and it will feel a lot more if you’re withdrawing or sending a bigger amount.
- Another reason why PayPal can be insecure for freelancers is that the company can hold your funds without a valid reason. Funds are held for 21 to 180 days but you need to take some precautionary measures to avoid this from happening. For example, verify your account, use the account regularly, and try not to get payment disputes on your account. Further, having a new account can also cause this issue. There are no guarantees that your funds will be completely safe and accessible to you at all times.
Payoneer
Payoneer is another big name that specializes in international transactions. Payoneer has partnered up with Upwork to provide digital payment services to freelancers on the platform. In Africa, Payoneer can be easily accessed and used to send or receive money, making it a viable option for receiving payments from international clients. PayPal and Payoneer are similar in terms of digital services ordered. With both of these platforms, you can send and receive funds, store payments and receive debit MasterCard that can be reloaded.
Let’s look at the pros and cons of choosing Payoneer.
Pros
- Just like PayPal, Payoneer has entered 150 different countries to provide digital payment services. However, while PayPal only supports 25 currencies, Payoneer supports 150. Supporting that many currencies make Payoneer the better choice to accept international payments.
- Receiving payment in foreign currency is cheaper in Payoneer thanks to its global banking networks.
- eChecks and credit card payments are charged at 3% and 1% only.
- Receiving other Payoneer customers is free in EUR, JPY, GBP, and USD.
- On average, the payment is reflected in your Payoneer account in less than 2 hours.
- Upwork charges $2 withdrawal fees while Fiverr charges only $1.
Cons
- Foreign currency to the local bank account payment withdrawal is charged at 2% more than the mid-market rate. Further, if you send payment to a client using the same currency (only USD, EUR, and GBP), you’ll be charged a flat fee as well on top of any bank charges.
- You can order a Payoneer MasterCard for almost a $30 annual fee however, that’s expensive for a prepaid card.
- Payoneer’s ATM withdrawal fees are outrageous. Even though the fee might differ based on the currency, on average, you have to pay $3 for each transaction.
- Money withdrawal to your local bank account might take 3 to 5 business days. In this situation, you’ll resort to using the expensive prepaid card and lose $3 as well.
Skrill
Skrill started digital payment services back in 2001 when it was called Moneybookers. Since then Skrill has quickly become a platform used by many to send and receive payments. Currently, Skrill is among the best payment method for freelancers. It supports 40 currencies and has a presence in 200 countries just like PayPal and Payoneer.
Let’s take a look at the pros and cons of Skrill.
Pros
- Setting up an account on Skrill is free and quick. You can create a personal account or a business account without any hassle. It offers quick withdrawals and supports regular payments to freelancers in any available currency.
- Skrill prepaid card is cheaper at just a $10 annual charge and the ATM withdrawal fee is $2.5.
- As long as the payment sender and receiver are in the same country, there are no transaction charges on Skrill.
- Your transaction charges will still be 0 in case both sender and receiver are skrill users.
- As with other platforms mentioned above, Skrill payment transfers are done instantly; Withdrawing the money from your bank account might take 1 to 5 business days which is significantly better than PayPal and Payoneer.
Cons
- Skrill works flawlessly for the most part; however, in Africa Skrill doesn’t have a good service.
- The Skrill verification process is very lengthy and tiring. It can take many days just to get verified on the platform. The verification process is set by every digital payment provider to protect the sender and recipient and to create a secure environment for all users. You need to submit an ID (driver’s license and passport) and a utility bill for verification.
- Skrill doesn’t have the customer support that you would expect from a huge digital payment provider. Users have complained about the poor customer support that Skrill provides.
- For international transfers having the same currency, Skrill charges 4.99% which is fairly high.
Wire Transfers
Wire Transfer is among the most common international payment methods. Wire transfers move the funds from the sender’s bank directly to the receiver’s bank. Wire transfer has to be the last resort for most freelancers due to slow transactions, uncertainty, and lack of security. Despite being discouraged by most freelancers, wire transfers get the job done.
Let’s check what wire transfers offer and their drawbacks.
Pros
- Wire transfers are available all over the world despite the expensive processing fee that comes with them. Accessibility is something we cannot ignore. The receiver can easily receive wire transfers without much effort.
- Domestic transfers are quickly processed. You can receive your payment within a day. For urgent domestic payments, it is better to always choose the wire transfer method since it is secure. Even for international payments, wire transfers are processed quickly. They usually take less than two days to get processed.
- US-based clients can pay African freelancers without any hassle.
- Wire transfer services have to follow regulations that are set for international wire transfers that help in protecting the parties involved. These regulations also help in making sure that the money is sent to the recipient safely without any hiccups.
Cons
- As mentioned above, wire transfers are notorious for being expensive. Senders always end up losing more money than the recipient. however, depending on the bank, some banks require service fees from $10 to $35.
- Wire transfers are subject to the exchange rate for the current day. Mostly, freelancers will receive less money if they choose to receive money from the wire transfers. Due to the bank’s exchange rate being slightly lower than the current rate, freelancers suffer and receive less money in the end.
- Wire transactions put income tax filing pressure on recipients.
- They only work for big projects (higher $) since small projects are not worth bearing all these excessive costs. For instance, a project of just $300 will be paid through wire transfer due to low economic viability.
- Wire transfers are non-reversible which makes them extremely risky for clients. Sometimes freelancers stop working well and if the client has already paid the money, it can’t be returned in any way. Wire transfers are only reliable when you know the receiver well.
Now, let’s see our recommended digital payment service provider.
Our Recommendation - IntaSend
IntaSend is a payment gateway for businesses and developers. You can use IntaSend to get paid from anywhere in the world and securely send money everywhere. In Africa, despite having many options, freelancers still face problems when it comes to receiving their freelance payments.
IntaSend can help you if you’re a business. The payment API that IntaSend follows allows businesses and e-commerce shops to integrate the best payment gateway to their website or platform. This way, customers receive the best payment options for them to choose from.
Freelancers in Africa can use it to receive payment securely without any hassle. Since this platform is developed for Africa, it is effectively better in terms of being cheaper and quicker. compared to other international payment methods, IntaSend only has a 2-3 days payout period for international payments while domestic payments are withdrawn within 2 days.
Here are some benefits you can expect:
- The transparency makes IntaSend favorable among African freelancers. Having a clear transparent process allows users to trust the platform. African freelancers have waited long enough for a platform that gives them the type of transparency they need. IntaSend is here to provide a completely transparent payment process, no hidden charges, and great service.
- Built from the ground up for Africa. IntaSend collects feasible due diligence documents and goes an extra mile properly understand the business.
- IntaSend has introduced the option to carry out the mass payout. This means that the client can pay many freelancers in the process. This will save a lot of time and improve overall efficiency. The mass payout system is currently being introduced to 11 countries including India, Pakistan, and 9 African countries.
- Accept payment internationally from IntaSend and receive transaction reports, payment notifications, and customer support.
- Many ways to get paid - In addition to card payments, IntaSend also supports Bitcoin and ACH payments. Learn how you can also receive payments without having a CashApp account.
- No-code support i.e generate payment links and send invoices directly from your IntaSend dashboard. You do not need a website to start receiving payments.
- Easy to use APIs and integration support - Automate payments and integrate them into your website in minutes. Get access to our free tools for Bubble (No-code platform), WordPress, WooCommerce, Flutter (Mobile apps), and Shopify
- Fraud management support to secure your money.
- IntaSend realizes the importance of receiving your payment on time. When you accept payment internationally using IntaSend, you’ll find that the rates provided by us are far better than the local banks.
Wrapping Up
Freelance is here to stay. In Africa, the number of freelancers will continue to grow as people shift from typical office jobs to freelance careers. The most important thing for any freelancer is the ability to get paid on time, quicker process, and cheaper service/transaction fee.
Please let us know if you need any further clarifications or assistance in getting started.
