18 min read

How Do You Pay Freelancers and What Are the Best Ways? All You Need To Know

What are the best payment methods for international and U.S. freelancers? Compare pros and cons for ACH, wire transfers, Wise, PayPal, Payoneer, Zelle and more.
How Do You Pay Freelancers and What Are the Best Ways? All You Need To Know

The freelance economy is setting new records: The number of freelancers will increase to approximately 915 million by 2023, according to this Mastercard study.

By 2023, the freelance market economy will reach $455 billion globally. 

The COVID-19 pandemic accelerated the growth of the freelance economy, as many companies remotely hired freelancers to navigate the economic uncertainty and unpredictability. The trend has continued past the pandemic as companies recognize the benefits of hiring freelancers, such as increased flexibility, reduced overhead costs, and access to specialized skills.

Experts say the freelance economy will continue to grow not only in the U.S. but also globally. Businesses need to expand their talent strategies to include independent professionals if they want to remain competitive.


What Is Payment Automation? And What Does It Mean for the Freelance Economy?

Say goodbye to outdated manual payment processes – it’s time to automate and organize. Payment automation is all about using technology to send payments quickly and securely and automating every step of the process. It saves a company hours by eliminating the tedium involved with accepting, reviewing, and manually approving invoices.

Freelance and remote work is surging and, in the process, improving freelance platforms and tools. Automation means companies can hire from anywhere and freelancers can search for employment from anywhere, changing the way the gig economy operates. For example, a brand headquartered in New York doesn’t have to hire a graphics designer in the same city. The talent pool has opened up to the globe.

Freelancers are gravitating toward companies that can provide innovative experiences and digital tools because paying freelancers is more complex than it can appear. For example, making automated payments can include several transactions, especially for larger projects. Freelancers and clients have more options, such as sending advances, expediting payouts, and adding expenses. So, companies should prepare for an even more globalized and automated future.

Your brand stories are happening everywhere, and creative storytellers are ready to bring them to life. But first, the hurdle is figuring out how to pay them.

Storyhunter’s dedicated payment team navigates the intricacies (regulations, taxes, processor fees) to get freelancers paid in 170 countries. And over a decade, we have learned a thing or two about different payment methods. We're now sharing what we know with you: the upsides and downsides of each payment platform and where the most popular ones work best. 

It’s never been easier to get freelancers paid and rev up your content creation.

What Are Some of the Challenges of Paying Freelancers Globally?

There is a booming number of freelancers completing work for clients internationally. So, payment challenges are bound to come up.

First, there is a lack of visibility into costs and payment status for cross-border payments. Sixty-one percent of companies want visibility into costs and 56 percent into payment status, according to this Strategic Treasurer report.

Second, payment systems and manual workflows are laborious and error-prone. Over half of the companies say the time it takes to update the payment system is a top concern.

Another challenge is exposure to banking and compliance issues: Know Your Customer (KYC) requirements are the dominant regulation issue for 63 percent of firms, as it absorbs company resources.

Lastly, there’s an increased chance of fraud (35 percent of smaller companies identify security and fraud management as their top concern.)

What payment method is best for freelancers?

Now that you’re acquainted with the common challenges companies face when it comes to paying freelancers globally, let’s take a look at how to choose the right payment method. There are several factors such as location, local tax laws, KYC rules, and availability of payment methods.

  • Location: Disruptive geopolitical events and security issues can affect payments in volatile areas.
  • Local tax laws: Taxes, liability, and compliance regulations vary by city, region, and nation.
  • Know Your Customer rules: KYC requirements, which establish the identity of the contractor, vary from country to country.
  • Available payment methods: Storyhunter works with the top six freelancer payment methods, which have different costs, timelines, and payment limits. The adoption of each payment method can vary by region. In some places, only one or two options might be practical or easily accessible.

There are many variables at play here: The freelancer's location is the main factor as it determines the options, such as accessible payout methods and currency.

What is best for a U.S.-based freelancer will likely not apply to a freelancer in another country. Generally, the best method is one that is reliable, quick, and with the least amount of cost to the freelancer. But again, this varies from country to country (and since each bank may have different charges for international deposits/currency conversion that we are not privy to, it can be different for residents of the same country).

Storyhunter's payment processors try to offer as many options as possible while maintaining compliance with local laws and accounting for the limitations of banking infrastructure (for example, while ACH is cheaper, not all countries are part of the Global ACH rail systems where wires may be the only option).

What Are the Top Payment Methods for Freelancers in the U.S.?

ACH and Payoneer bank account payouts accounted for 60% of transactions, according to Storyhunter’s 2022 data for the U.S. Venmo followed closely with 22% of transactions on our platform and PayPal with about 18% of transactions.

When comparing average transaction amounts for different payment methods, ACH and Payoneer show higher dollar amounts per transaction, which makes sense since the money goes straight into the freelancer’s bank account. Venmo has a much smaller amount per transaction.

Let’s break down the most popular payment methods and the benefits and challenges of each one.

Global ACH Explained

Global ACH is an automated clearing house transaction involving a financial institution outside the jurisdiction of the U.S. In the U.S., the payment clearing mechanism is Nacha. In Europe, it’s SEPA.

Global ACH is comparatively cheap: It costs up to $3 to send money and is free to receive. And once you’ve set up Global ACH, it’s highly secure and well-suited for small recurring payments. There are challenges: Global ACH transfers money in the local currency, which may create issues depending on whether a freelancer’s account can accept it. Next, funds are not instantly available - they take about three business days to clear. What’s more, transaction limits vary by country. For example, payments to Thailand cannot exceed 50,000 Baht (approximately $1,500). Lastly, Global ACH is not widespread: there are about 100 countries where you cannot use this payment method.

If you’re paying a freelancer via Storyhunter using Global ACH, you can see all your payment processing costs in the project’s overarching Service Fee. For your freelancers, payment providers withhold 80¢ per transaction and a 1.9 percent foreign exchange fee, where applicable. Our payment team is also there to help freelancers with any issues setting up or receiving payments.

Wire Transfers Explained

Wire transfers are bank-initiated payments allowing for the movement of funds from one account to another. When both banks are in the U.S., it’s a domestic wire transfer. When one bank is outside the U.S., it’s an international wire transfer or a remittance transfer.

You can send large amounts of money quickly using this method. Wire transfers are typically processed on the same day - sometimes in just a few hours! (Note: banks may charge a convenience fee for this.) In contrast to ACH, wire transfers have a larger coverage area.

On the flip side, wire transfers are generally more expensive and need additional information for accurate execution, such as BIC and IBAN. We’ve noticed potential issues with wire transfers. For example, when a bank has different IBANs for different currencies, the freelancer must input the IBAN associated with receiving local currency, or the transaction will fail. Then there are the fees charged by intermediary banks, which vary by country and add up quickly for clients and freelancers. Wire transfers are between $25-$30 for domestic transfers and $45-$60 for international ones.

If you’re paying a freelancer via Storyhunter using a wire transfer, your payment processing costs are in the Service Fee. While we don’t offer wire transfers for US-based payees, Storyhunter offers international wire transfers for freelancers ($10 fee) where ACH is unavailable. We encourage freelancers to confirm what fees may be assessed by their financial institution based on their specific account setup and currency restrictions.

PayPal Explained

We have all heard of PayPal: the top payment platform for money transfers boasting 432 million active users and merchant accounts. PayPal is available in most countries and supports 25 currencies.

PayPal is secure: it encrypts bank and credit card information. It is speedy (funds are typically available within 30 minutes). And freelancers can receive funds for free.

The downsides? You need to pay for currency conversions when making a commercial transaction. Another challenge is that you can mistakenly route payments to the wrong account. Once this happens, it is hard to recoup, especially if the mistaken recipient claims the funds. Finally, freelancer services are subject to varying fixed and percentage rate-based fees depending on location, payout types, and currency.

Are you using PayPal to pay freelancers via Storyhunter? Great! We cover the cost of the payout to the freelancer. There’s only a fee if freelancers choose an instant transfer of funds from PayPal to their bank account. We also support PayPal payments to over 100 countries, and freelancers can receive their funds via a personal or business account. As with the previously mentioned payment methods, we include all your payment processing costs in our overarching Service Fee.

Venmo Explained

Venmo is an American mobile payment service owned by PayPal. You send and receive money quickly and securely using Venmo.

Eighty-three million people use this method because it allows them to pay with a bank account, debit card, or credit card. Users can maintain a cash balance in their company Venmo account, and there are very few fees leveraged on Venmo.

However, similar to PayPal, funds are difficult to retrieve if sent to the wrong Venmo account. Also, freelancers with a Business Profile are charged 1.9 percent of the payment and 10c for every payment they receive of a dollar or more. A final drawback is that you need a U.S. number to sign up.

Is Venmo a good option for freelancers? Yes! Storyhunter does not charge a fee to send money to freelancers using Venmo. But there is a fee if freelancers instantly transfer funds from Venmo to their bank account.

Domestic (U.S.) ACH Explained

Domestic ACH involves the transfer of funds between banks, credit unions, or other financial institutions within the U.S. It is the favored method for direct deposits, like payroll and bill payments. ACH transfers have increased by 8.7 percent year over year.

Domestic ACH is cheap and easy to initiate and doesn’t face the same type of issues as global ACH since it is all handled by Nacha, which is U.S.-based. You can trace where your funds are using this quick, reliable, and secure method.

As with any payment method, there are challenges. Fund transfers must happen between U.S. financial institutions, and you need to meet U.S. KYC compliance requirements. If freelancers incorrectly input their account information, it will take time as the funds first need to be sent back.

When paying your freelancers with Domestic ACH via Storyhunter, here’s what to keep in mind: for freelancers, it costs 80¢ for a domestic transfer, and they can route funds to a personal or business bank account, allowing for greater flexibility based on their business structure (It’s also handy for full-service production companies.) Also, our payment processors perform the required KYC checks to comply with all regulations.

Wise Explained

Wise, formerly known as TransferWise, processes nearly $9.7 billion worth of international transactions (according to Forbes) every month. It's not necessarily the cheapest option: it has higher transfer fees than some competitors. But it offers fast-money transfers (less than 30 seconds for some transfers). Wise has various ways to send money and no markups or exchange rates.

How does Wise calculate its pricing? It depends on the amount of money, the type of currency the recipient will get, and the payment method (for example, bank account or credit card.) The percentage of the amount sent is the fee Wise takes.

From the U.S., you can send money to 50 countries using Wise. You can also send money to someone in another country if the recipient's bank account is in U.S. dollars, British pounds, or Euros.

Payoneer Prepaid Debit Cards Explained

Payoneers’ prepaid debit cards are popular and widespread: Freelancers can use these cards anywhere Mastercard is accepted. So, what is a Payoneer card? It is a physical or virtual card you can associate with any currency balance in your Payoneer account. Freelancers can use the cards at ATMs, stores, or online anywhere Mastercard is accepted.

When a client pays a freelancer using this option, the money goes directly to the Payoneer wallet or card, depending on how the freelancer has set it up. While these are advantages to the card, such as its widespread use mentioned above, the fees associated with this method can add up as they are per transaction, depending on the usage.

The cards typically come in handy when no other options are available, for example, in countries with limited banking infrastructure. Russia doesn’t allow prepaid cards. We profiled a Russian freelancer who used to earn 30% of her income through Storyhunter. All that changed after the 2022 invasion when major payment providers like Payoneer pulled out to comply with sanctions. We worked closely with Payoneer to get freelancers paid during this time. You can read more about Arina’s story and our efforts to ensure freelancers get paid during a globally challenging time here.  

At Storyhunter, we only offer prepaid debit cards via Payoneer. Freelancers can also opt for a “virtual” card at no charge or a physical debit card, which freelancers can use to withdraw funds at an ATM where it is functionally supported. When opting for the Payoneer option, there are no costs to the client. But the cost to the freelancer depends on the card type (physical or virtual) and the transaction type. You can see the full breakdown here.

Stripe Explained

Stripe, an online merchant service and payment processing specialist, can accept over 135 currencies. It offers advanced reporting tools, subscription tools, and instant payouts (the standard payout is two business days, but qualified merchants can take advantage of the Instant Payout option.) There are cons: Stripe requires technical understanding (businesses often need to pay a developer to integrate Stripe into their website's shopping cart.)

For its services, Stripe charges a monthly fee. Stripe's fees are per transaction, and the pricing is transparent. You can expect to pay 2.9% plus 30 cents per transaction for online sales, and there is an additional 1% fee for international and currency conversion transactions.

Comparing Stripe and PayPal, Stripe works better for larger companies looking for more payment options, such as subscriptions and recurring payments. PayPal is more expensive than Stripe, charging 2.7% plus 30 cents per online transaction. Stripe takes 2.7% plus 5 cents for most transactions.

Zelle Explained

Zelle is a peer-to-peer (P2P) digital payment system allowing you to send or receive money from friends or family between U.S. bank accounts - in an instant!

How exactly does it work? More than 1,700 banks and credit unions in the U.S. offer Zelle within their apps. All you have to do is find the Zelle option through your bank's website or app and choose to whom you want to send the money. You need a U.S. checking or savings account to use Zelle. A major pro? Zelle doesn't charge any fee to use its service.

What’s the best alternative to Zelle? Venmo. This service is also only available in the U.S., but functions more as a digital wallet, letting you accrue money in your account for future payments. For Venmo, you need a U.S. phone number to sign up, regardless of whether you have an American bank account. You can choose Zelle or Venmo, depending on your needs.

Freelance Services Marketplace Explained

A Freelance Services Marketplace is a ready source of jobs. It is a platform where businesses can hire freelancers for remote projects. Our clients, for example, can discover and hire freelancers across 60 services anywhere in the world.

The marketplace is a “two-sided platform for people to both buy and sell a variety of digital services typically offered by freelance contractors,” author Jeff Schwartz writes here.

The platform economy has brought people to these marketplaces and expanded the talent pool.

Clients can pay freelancers through a Freelance Services Marketplace and won't be charged additional payment processing fees (although it depends on the platform). Freelancers can also set their preferred payout type and don't have to chase clients for payment. Financial charges depend on the selected payout method, speed, and location.

Marketplaces usually charge various fees for using the platform: fees apply to clients and sometimes freelancers.

Freelance Management System Explained

A Freelance Service Marketplace can offer a Freelance Management System (FMS) solution, which allows clients to hire and manage freelancers - all in one place. These are usually designed for larger teams with massive content production needs such as media companies, global brands, NGOs, social media platforms, etc. The platform includes onboarding freelancers, hiring, payment, billings, and deliverables.

The FMS is similar to the service marketplace for freelancer payout options. Freelancers need to set up their profiles and choose the payout methods that work best for them. For clients, FMS provides even more benefits, such as bulk invoicing or credits. It allows a small team of content producers to manage hundreds of individual projects without processing payments for each project. The main advantages of FMS are time and resource management for business clients.

Storyhunter tracks project spend with always up-to-date reports

We offer our clients an FMS solution. For example, clients on our platform can build a creator network, view all projects, manage contracts and paperwork, pay freelancers, and view their spending across a team or department. Through our FMS, we’re turning brands into content production powerhouses.

Storyhunter is a unique hybrid: you can discover and hire freelancers on our platform because it’s a marketplace and you can manage and pay them using our FMS solution.

Top Global Freelancer Payment Methods Overview: Pros and Cons

Here’s a quick list of all the pros and cons of the payment methods covered in this article.

  1. Global ACH: Global ACH, available in 150 countries and less expensive than international wire transfers, is best for non-urgent, small, and recurring international payments. However, transaction limits exist in some countries, and complications with currency exchanges.
  2. Wire transfer: This payout method is available almost everywhere in the world and is a viable alternative for sending payments quickly to countries without Global ACH.  
  3. Prepaid debit card: This method is available in 100 countries, depending on the card provider, and is best for freelancers in countries lacking banking infrastructure. But a big challenge is that availability and convenience of card providers (Mastercard, Visa American Express, Discover) varies by region. Also, usage, card type, and currency conversion fees can quickly add up.
  4. PayPal: This service is best for issuing same-day payments and is available in most countries. Though, PayPal’s fees can change based on location, payout type, and currency.
  5. Venmo: Owned by PayPal, Venmo also offers same-day payments and low fees on business transactions. But unlike its parent company, Venmo is only available to U.S. users. Another drawback is if you send funds to the wrong Venmo account, it will be hard to get the money back.
  6. Domestic ACH (U.S.): This service is best for non-urgent, standard domestic payments and has nominal fees. As the name suggests, it’s only available in the U.S., and there can be accuracy issues with account details and KYC information.

How To Take Advantage of Storyhunter’s Expertise

We have extensive expertise and are here to help you pay freelancers internationally through secure payment processes. Take a look at everything we take care of for you:

  1. Payment transaction fees: No matter where your freelancers are and what payment method they use, Storyhunter handles the cost. All you pay is the flat service fee for platform usage. Payment summaries are available for download.
  2. Coordination of payment workflows: All you need to do to set up is select your own payment method with Storyhunter. We automatically bill or invoice for completed projects, and any freelancer payment issues are handled by our support team. If you pay all your freelancers through Storyhunter, your finance team gets one inclusive invoice a week for all completed hires for the previous week. We handle payment to freelancers and we guarantee payment within 30 days. You no longer have to set freelancers up as vendors, field questions about payment dates, or even handle tax issues.
  3. International compliance: We stay up to date on regulations in countries around the world, and handle regulatory and compliance issues for payments, including tax filings.
  4. Tracking freelancer spend and budget: The Reports page, available to Company Admins, is an interactive dashboard showing how much you've spent through Storyhunter. It breaks down the numbers by cost and story codes, among other filters. When you hire all your freelancers through Storyhunter, you can begin tracking your spending and get a comprehensive overview of how you're spending the money. Your finance team may find this information valuable when considering future budgets (read more).
  5. Security and fraud: Storyhunter partners with well-established payment providers who take care of any security or fraud concerns surrounding global payments to freelancers.

Simply put, we take the stress out of paying global freelancers.

What Are Payment Types for Clients on Storyhunter?

For non-sub clients, payment must be rendered via credit card. For subscription clients, invoicing is available. Clients who are invoiced have the option to pay via ACH, wire, or credit card. We also offer a credits system for members on higher subscription tiers.

How Can Clients Pay Freelancers Overseas Using Storyhunter?

You can pay freelancers in more than 190 countries using Storyhunter. The quickest way to pay a freelancer is to create a direct project with them. You can do this from their profile by clicking "Hire.” Check out the detailed process here. If you need to invite a freelancer onto the Storyhunter platform, learn how to do that here.

Can Clients Pay an Advance to a Freelancer on Storyhunter?

We offer advances and expedited payouts. Using the Advances feature, you can issue a payment installment to a freelancer while projects are still ongoing. Advance payments are, by default, expedited to go out in 3-5 days. You can opt out of this for an additional processing fee. Here are a few points to keep in mind about advances:

  • They are charged to you the same way as project payments.
  • There is no limit on the percentage of a project you can pay out as an advance. You can also choose whether you’re advancing an amount for expenses or for project rates.
  • You and the freelancer can initiate advances. If one party starts an advance payment, it must be reviewed by the other party before we can send it out.
  • An additional service fee will be applied if you want to send an expedited advance. The freelancer will receive the payment within business days. Otherwise, advances go out within 30 days.

Learn how to use the Advance feature here.

How Can Freelancers Add Payment Methods to Their Storyhunter Accounts?

In order to receive your earnings on Storyhunter, you need to set up a payout method. A payout method specifies where to send your payment. As part of the setup, we require additional personal information to comply with government regulations. See our step-by-step instructions on how to set up your payout method.

What To Know About Payments on Storyhunter as a Freelancer

We guarantee freelancer payments, so you never worry about dealing with accounting departments or chasing clients. Storyhunter also pays on the client’s behalf and deals with invoicing and collecting payment for you. When the project is marked complete by both the freelancer and client, we submit payment within 30 days.

We also help set up your payment preferences, allowing clients to save time handling payments and focus on content creation tasks.

Freelancers can use Storyhunter to find one-of-a-kind work opportunities and get fast, guaranteed payments for their completed projects. A one-time electronic payment setup allows freelancers to get paid on time in the method of their choice for all projects, regardless of their location or the location of the client.

For background, large companies have increasingly implemented corporate policies of paying vendors within 45 days, 60 days, 90 days, and even in some cases, 120 days. These periods are too long, so we negotiate preferential payment terms with clients. Even if we don’t achieve 30-day payment terms with them, we still guarantee that for the freelancers. For clients, it’s much easier to make a one-time exception for a company like Storyhunter than to try to process a large number of small invoices from freelancers.

What’s the Future of Payment Automation?

The freelance economy is here to stay, making it crucial to help solve some of the payment pain points that come with paying freelancers in countries around the globe.

"As gig work permeates every corner of the global economy, and as the financial vulnerability of gig workers continues to make headlines, gig platforms will need to find better solutions to their workforces’ challenges," Mastercard stated in its report. "Offering gig workers instant access to their pay can improve gig workers’ financial health, help gig platforms attract and retain gig workers, and promote a more healthy and sustainable gig economy."

Businesses and freelancers can take advantage of the FMS solution, which automates and organizes all aspects of the payment process, allowing freelancers to get paid quickly and securely. Automating your workflow today may seem like an option, but it will become the norm soon.