Ask HN: How do you get paid for remote freelance work? | Hacker News Reader

Ask HN: How do you get paid for remote freelance work?

44 pointstbarbugli61 comments

Are there any better alternatives to ol' Paypal?

Easiest for (without loss of generality) US clients: Establish a US bank account and get paid with checks, ACH (in-country electronic transfers), or wire transfers.

Easiest for you: Establish a bank account in your country and instruct your US clients to pay you with international wire transfers.

US clients are often not very experienced with international wire transfers and it causes hitches for their internal processes and banks, so the US account option will save you a lot of friction on a per-client basis in return for having more headaches up front. (The easiest way to set up a US bank account if you don't physically reside in the US is to do it through a local branch of a US-homed megabank. Despite the general impression of a lot of freelancers on this matter, international commerce is in fact fairly routine and "the Patriot Act" -- Know Your Customer and anti-moneylaundering regulations -- are not an absolute barrier to this.)

You should probably avoid using Paypal for transfers of more than a few hundred dollars. I like Paypal, don't get me wrong, but they're not well-suited to running a consultancy on top of.

Thank you for your answer; would you mind expanding a bit on Paypal?

I like Paypal and have processed somewhere north of $100k through it. That said:

1) Paypal's fraud algorithms are tuned by having lots and lots of comparatively small transactions at comparative high frequency rather than few comparatively high transactions at comparatively low frequency. My account looks very unrisky because it accumulated $100k in $25 chunks over years. I think Paypal would quite possibly need to enquire if I got $25k in a $25k chunk once. Unfortunately, "First-time interaction between US-based Paypal account and foreign-based low-history Paypal account is a huge transfer" will quite possibly set alarm bells ringing in their fraud department, and you might find your money tied up for a while as you try to demonstrate that you're not a criminal enterprise. (Many HNers will accuse Paypal of trying to steal the money and, on this issue, many HNers are fools, but there is a very real risk of you having to deal with complications that you don't need.)

2) Your best customers can't pay with Paypal. I'm not exaggerating: they can't pay with Paypal. There is literally no button at their company which pays you with Paypal. They have an entire department of people who are capable of moving PDFed invoices into an accounting system and clicking a button which generates a check or an ACH payment, but there is no button to click which says "Transfer $25k to our Paypal account then send it to 'tbarbugli."

Your best customers can't pay with Paypal

I've always been amused with the creativity that Finance can show if it's in their interests, and the lack of creativity when the issue is irrelevant to them. Having had a long background in support, I must admit that I'm jealous of that political power :)

Just to add to this, I think any serious company you'd work with would be shocked by someone wanting to be paid in anything other than a wire transfer (and by "shocked", read "wouldn't be able to do it and wouldn't take you seriously because of it). In my experience, this is how almost all payments are made in the real world.

If you're a professional, use a wire transfer like everybody else.

Absolutely correct with regards to "clients will neither comply with nor be impressed by requests to pay in any manner they're not used to paying by", but I think that wire transfers are actually fairly exotic by US standards. They typically expect to pay with checks or ACH payments. (More often checks, in my experience. Source: I've cashed hundreds of thousands of dollars of them, and every time it happens I worry that this is finally the time that I'll be shot for robbing the bank.)

Imagine what it's like to walk into your Podunk suburban bank every two weeks with a $50K+ check in your hands from a company with a .com in their name. Yeah, that was fun.

But Patrick's absolutely right re: checks. If cash flow is tight, my favorite trick is to FedEx a prepaid overnight envelope to your client. Ask them to place the check inside. This elimates the "check is in the mail" song and dance, and it's only marginally more expensive than a wire fee.

I'm based in the UK, with some clients in the US and EU. I always offer direct bank transfer (to UK bank account), credit card and PayPal as payment options.

In the UK/EU everything is a direct bank transfer.

From the US — despite offering the wire transfer details — the majority of payments I've received are CC, PayPal and (ugh) cheque. Apparently it causes them less hassle that arranging a wire transfer with their accounts department. As ever YMMV.

I have to say that's fairly surprising to me - all of our clients, both from the US and from other places, pay with bank transfers. I've never seen anyone suggest using PayPal or a credit card, and I would find it surprising to make payments of 10s of thousands of dollars that way.

But as you said, that's just been my experience, I guess there are other ways of doing things.

All three options (bank transfer, CC & Paypal) are presented on the invoice — so this hasn't been through client request but through client preference. I'd actually prefer bank transfer since it usually works out slightly cheaper. But not enough to care about ;-)

Yep, you and patio11 are very right in assuming that if transfer fees are a problem, you're not charging nearly enough.

In my experience as a UK citizen, is that the bar for sorting out a US bank account for a non-US citizen running a non-US registered company is non-trivial. Especially if you're not physically in the US. It's a process that can take several months of tedious running around with forms and no guarantees of a result at the end of it. If others experiences have been different and easy — I'd love the details ;-)

I've also found that US companies expect US bank accounts to be associated with US companies/individuals, so their standard forms are also setup that way to expect SSNs, etc.

For me, running a non-US business, international bank transfers, credit card payments (I've been… surprised… how large some CC payments have been) and PayPal (very much not ideal I agree) have been much simpler.

YMMV but opening a US bank account as a UK citizen is easy as long as you're present on US soil.

Opened a checking account at a Chase branch in San Francisco with my passport and as many other proofs of address as I could muster. Everything gets delivered to my UK address.

Proofs of address - meaning proof of your UK address or some USA address?

"present on US soil" is a very big IF, the whole point of remote freelancing is to avoid the expenses/visa issues/etc and not be present on US soil.

You only have to be present there once, I guess, to open the account. Then do everything else online.

I've attempted - and failed - to establish a US account many times. I've even asked US natives and US banks over here to help, and they couldn't do it either.

I always seem to run into rules abut money laundering, domicile, and all kinds of other bureaucratic nonsense.

If anyone has managed to get past this, I'd love to know what the secret is.

A friend of mine had the same problem with HSBC moving from Australia to England. Slogan: "The world's local bank". Experience: "Go away unless you're a large business". Their practices actively discourage private users. The branch here in Melbourne wouldn't even accept forms supplied by a London branch, filled in, then faxed by the same London branch office... 'Not original', despite being sighted as original by the London staff, who were the ones doing the faxing.

Experience seconded here - would not touch me until I turned over 2 m a year. But ... International work is how I will get to two mil ... Blank looks.

Open up a US LLC via the internets, then travel to the US and open up a bank account under the LLC's name with your certificate of incorporation in hand (this gets mailed to you by the state you incorporated in). Results may vary depending on the state. This is also good in case you get sued, your personal liability is shielded by the LLC unless the corporate veil is pierced.

This is not legal advice.

Is that something you did personally? Would you recommend a specific service to start an LLC from outside US?

Don't banks ask for proof of LLC 'residence' - usually an office lease, or something else that proves there's a real address?

I have had two years of being paid by US company while in the UK and painful does not even begin to cover it. Initially I got airmailed checks (cheques) and would pay them into my UK branch who would promptly send them back to the US for clearance. It took one payment five months to end up in my account. Seriously.

We fixed it and started using wire transfers which worked fine but I would get beaten up on the exchange rate. I was one of the few people in the UK hoping our economy would get worse just to improve my rates :-)

I would say the biggest problems were

- W2 withholding (they had to have proof I was legit or they withheld taxes and payments)

- not having a US bank account

Getting a US account is on my todo list, but it was so problematic (my UK bank simply refused to help - less than 2million GBP turn over ? Fuck you, work it out yourself). There is a Silicon Valley bank that is more amenable but by the time I found them we what wire transfers sorted and it lost it's allure.

So until I am likely to do a lot of small business in the states, I am sticking with "wire me the money - or I don't work"

What's the name of the Silicon Valley bank?

http://www.svb.com/uk

Well - that was unexpectedly obvious. :)

Background: I'm a UK freelancer working with UK, EU, US and RotW clients.

Per other commenters, my UK and EU clients are usually happy to pay by bank transfer. My invoices include UK payment details, along with IBAN and SWIFT details. I am also starting to include Paypal details to go with the path of least resistance.

Now, US clients tend to pay via Paypal or US check. In the past I've used brokers like AuctionChex[1], and also used a USD deposit account with CITI[2].

AuctionChex went out of favour with me when their exchange rates went into free fall for no obvious reason, and CITI screwed me for fees after a mistake at their end. I no longer use either.

With the CITI USD account, it is possible to have it fee-free if you're careful: if you have a current account and 2 standing orders set up, hold a certain balance and you transfer in a given amount per month, there is no fee for either the current account or the USD account.

Now, I take the hit on USD checks and use my business bank (NatWest) account for it. They charge a set-fee to process the cheque, around 10GBP for the value I deposit, and I just mark it on my accounts as a bank charge. My accountant is happy, and there are no shady brokers in the equation.

[1] http://auctionchex.com [2] http://www.citibank.co.uk/personal/banking/international/eur...

Bitcoin, hands down. Specifically Bitpay You can get paid in 9 different currencies in 33 countries with 0% fees. Zero exchange rate risk unless you want it. Bitpay is especially nice for freelancing because you can issue manual invoices.

https://support.bitpay.com/hc/en-us/articles/201890513

I use Bitcoin, Paypal, and Stripe in my own business and I like Bitcoin the best by far. No charge back hassles, zero fees, no waiting 3 days for ACH payment confirmation.

There is one draw back that I see, that being that right now it isn't quite popular enough yet that it can be your only payment method. Some people are just not going to be capable of using it. That said you would be surprised I suggested it to a parts supplier I was working with who because of their location costs me $110 per wire to pay invoices. At first he told me no way until I told him flat out he was losing business on my smaller orders because even though his product was best on price the very high transaction fees made them more expensive for orders under several thousand dollars. They were interested in it all of a sudden. Funny how that works.

I would say Bitcoin, although my background is a little different to yours.

I primarily get hired to build Web applications which deal with some type of bitcoin payment (no bitpay or coinbase), so it makes sense for me to be paid in Bitcoin.

I'm a Bitcoin evangelist, so I generally pay for most things with bitcoin, so I don't have the issue of converting it to fiat.

It depends on the company. I always try to get people to pay with direct bank transfer, which is very easy within Europe now everyone has an IBANN by default, but seems to be trickier for clients with US bank accounts.

I've so far been paid by: direct bank transfer; Paypal; check.

Bitcoin is a viable alternative for overseas transfers and is worth investigating.

Transferwise! For payments from the US to my country (EU) there is a fixed 1% fee. In addition, their exchange rate is 3% better than in my local bank. Clients send the money with ACH or wire transfer. I have it in my bank after two days. Overall, much faster and cheaper than Paypal or international transfers.

at 2.9% + 30 cents stripe isn't all too bad https://stripe.com/nl/pricing you have to build your own checkout page though

Stripe charges closer to 5% when processing USD credit card charges, as it says on the website.

That's a ton (it's really 5%) for for convenient international movement of money, I actually agree it's not horrible given the dearth of better options.

Something built on BTC/Steller/Ripple will probably improve upon this soon, and HOPEFULLY somebody nails international ACH and makes it super easy/safe/reliable in the next few years. That would help Steller/Ripple/BTC networks and provide a non-crypto option which, let's face it, no matter how bullish you are on crypto it's gonna be a while before you can reliably expect someone to participate in the crypto economy.

I'm a US employee who's been working part-time and traveling abroad for the last 2-1/2 months. I have a Charles Schwab Investor Checking account that has no-fee ATMs all over the world (no ATM fee, no conversion fee, ATM fee reimbursement).

My employer does direct deposit into that account, but they also accept ACH and wire transfers, and you can also use their mobile app to deposit checks with your smartphone. I'm not sure how difficult it is for a non-US-citizen to open one of their accounts, but perhaps it's worth looking into.

What's wrong with bank transfers?

Or do you mean internationally remote?

for EU-US payments bank transfers seems quite expensive to me

They are - I'd try something like Transferwise, that's what we use to pay our international contractors. Or Stellars.

+1 on TransferWise. For other countries I've found Hifx (http://www.hifx.co.uk/) to be fast and not too expensive.

How much do you pay typically?

Charge more. Seriously. Wire transfer fees come out in the wash if you charge appropriate amounts for engineering services. I don't love spending ~$1k on them a year either but the business clearly supports them just like it supports the ~10 things that are more expensive than that.

I’ve always insisted on wire transfers to my (originally Australian, now Thai) bank account.

I looked at PayPal once (as I was asked by a US client if they could pay that way) and basically it seemed like it was only financially effective for small invoices. As soon as it went over $1K the “fixed price” of a wire transfer worked out better than a percentage based fee structure like Paypal.

My bank charges 7 EUR (~10 USD) for a wire transfer to any US bank; it would be expensive for small purchases, but not significant for a freelancing project payment.

What, no one saying bitcoin? :)

Volatility is scary! And the user experiences of most Bitcoin-related tools leave a lot to be desired. Both are temporary problems.

well one is not supposed to keep bitcoins in your wallet in this case; just use it to transfer the funds between the two peers.

good point, this should be what BT is made for (or at least a very good use case) and yet, no mention.

There were valid mentions about the many purchasing businesses who are unable to pay in Paypal due to their procurement bureaucracy rules. I seriously doubt that they'd able to pay in Bitcoin as well.

Otherwise, Bitcoin may be an okay option for the receiver; maybe a bit of a hassle to do proper accounting/taxes. Locally, I see options to 'cash out' BTC that will cost me something like 2.5% due to buy/sell spread - not the cheapest option but similar to accepting the same amount from a credit card.

I'd personally prefer good wire transfers, though - if worldwide transfers would be more similar to EU-wide bank transfers, then that'd be better than Bitcoin for freelance invoicing.

I'm going to again solidify my position as HN's Official Bitcoin Critic with this, but the reason I didn't suggest it is because BTC is a terrible method for doing international payments.

1) See elsewhere on this page where we explained that most companies are unwilling to add new payment types to accommodate individual vendors. This is as true for Bitcoin as it is for Paypal. It is probably more true, actually, since Paypal is a known-to-be-legal regulated subsidiary of a US Fortune 500 company and Bitcoin is Bitcoin.

2) Suppose you issue a US company an invoice for $10,000 and say "You can settle this invoice in Bitcoin." How are they actually supposed to do that? My impression is that the best option currently is to connect their bank account to Coinbase (note: non-starter!), wait a few days for it to be connected, then purchase $10k worth of Bitcoin at market price. $10k is +/- 17 BTC, which they won't actually be allowed to purchase in a day. It will actually take four days of repeated work to buy that $10k of Bitcoin. Then they can actually transfer it to you and, yay, you now have BTC.

3) But wait! What happens if the BTC price changes over the ~7 business days it takes from the time your client starts taking action on your invoice to the time they send you your BTC? Answer: somebody pays for this risk. Volatility is an implicit tax on transactions. One of the parties is going to be short BTC and one will be long BTC for the week, and given that BTC can very easily move 20% in a week, that means that your $10k invoice might be $8k or $12k.

3a) Clients do not like when $10k invoices turn into $12k invoices because To The Moon, Yo.

4) Suppose you have +/- $10k worth of BTC. How do you solve the Last Quarter Mile problem to your own bank account and/or local currency? Your options are a) send the BTC to an unregulated exchange and accept counterparty/currency risk (then hope that getting a large wire transfer from them doesn't cause your bank to reevaluate how desirable your business is) or b) attempt to deal with LocalBitcoins sellers multiple times, which apparently combines the wonderful trust of the clandestine drug economy with the mind-altering properties of currency exchanges.

4a) Time you spend on figuring out how to turn $10k of Internet money into $10k of local currency is time you aren't spending lining up your next $10k engagement.

5) If at any point you or one of your counterparties screw up in securing any computer or trusting any member of the Bitcoin economy, your $10k vanishes into the ether.

You should neither accept nor request BTC for professional services. They're more expensive end-to-end than dealing with banks and expose you to multiple unique sources of risk. You have plenty of risk in your business already, and if your risk appetite is high, there are more lucrative forms of risk you can "buy" than transacting in BTC, such as attempting to move your consulting practice upmarket.

I disagree. This was the state of things perhaps 1-2 years ago but this doesn't represent the situation at all today.

Using a bitcoin payment processor like Bitpay you have zero exchange rate risk and can receive payment in 9 different currencies in 33 countries.

Coinbases daily buy limit is $50,000 not 10k

You still have the computer security problem when you are using online banking and any reputable Bitcoin company has as good or better security than a bank. Two factor auth, and hardware tokens are the norm. I can't say the same for most of the banks I've used.

any reputable Bitcoin company has as good or better security than a bank.

Like Mt Gox? It was reputable enough to handle 2/3rds of all bitcoin transactions.

Besides, if you're concerned about your banking, you can easily shop around and find one with the hardware token security you like.

Mt. Gox wasn't reputable and anyone willing to look would have seen that disaster coming 6-9 months away at least. People were just being greedy because of the higher BTC exchange rate there.

I'm not sure bitpay solves this. The whole "international transfer is hard" thing is what Stellar was about recently.

Afaik bitpay is "receive bitcoin, get USD deposited into your account". It makes taking bitcoin payments from people who already have bitcoin easy. I'm sure it's great.

But it presupposes my client has a stash of bitcoin already. If they do the chances are they have their own internal Treasury, accounts in multiple other currencies probably in multiple of countries and frankly would find it easier to pay me in GBP out of the UK bank account that their clients keep filling up.

And I do not work for clients who run their own treasury - well sometimes but even then this never comes up.

I personally love bitcoin for international money transfers. My bet is on supporting the diaspora - families who trust each other but live in different countries and want to send some money home. Right now they get stiffed by Wells Fargo - but if Son in law in NYC can operate a gateway and Father in law can do the same in Hyderabad then all the members of their family can give son in law dollars and he can tell ...

You get the idea. It's how foreign exchange started

How do you explain the amount of time you dedicate to investigate and attack Bitcoin? Not saying that you are well informed though because most of what you've said is just wrong, but still it's pretty weird if you ask me. Especially when no one is forcing you to use it through violence, unlike other currencies (eg: the currency of whatever country you happen to live or do business in, probably USD).

The great thing about engineering is that, if you think I'm wrong, then what I say can't possibly harm you, because the technical reality of Bitcoin doesn't care what I say about it.

As for why I spend time on Bitcoin when I could be playing League of Legends: although the graphics are a lot less good and I believe BTC have a true market value below that of Riot Points, I find it intellectually interesting, and ultimately "I find it intellectually interesting" gives me carte blanche to spend time looking into almost anything.

The capitalist in me realized at one point, though, that I'm consistently in a room full of rich, smart people who are Bitcoin fans. This suggests one of two possibilities: one, I'm dead wrong. Two, I am not wrong, and I should engage in mutually beneficial trades with these rich smart people, such as paying them meaningful amounts of money in return for derivatives positions which only pay out if Bitcoin loses "a gigantic amount" of its present value.

I might at some point decide to communicate what I know to the wider community via market mechanisms such as e.g. buying puts in the Winklevoss BTC ETF, but as that is presently impossible and a wee bit against my intuitive sense of justice, I have been communicating with the community earlier via various textboxes.

Again, if you think I'm a crank, feel free to ignore. If you meet any rich people who love Bitcoin, you can tell them to ignore me, too, and to sell far-dated deeply out of the money BTC ETF puts. If you think Bitcoin is going to the moon then selling 100k BTC worth of puts at a $10 a coin strike price means heads you get free money and tails means you pick up 100k BTC for only a million dollars!

I see, you had to complete the sterotype as a Bitcoin hater so you added that you want to short soooo badly but you only don't do it because it's not possible yet. Which of course, like everything else you said, is wrong ;)

> but as that is presently impossible and a wee bit against my intuitive sense of justice

Let me guess. Your "intuitive sense of justice" is also where your hate for Bitcoin comes from? You hate that people were smarter than you when they decided to buy and you decided to stay in your comfort zone?

By the way no one here said anything about being rich or Bitcoin reaching 100k or "the moon", so I guess I'll just ignore 3/4 of your comment because it's just a huge chain of straw men.

This is correct, that Bitcoin currently has a lot of friction for corporate use in exchanging in and out of fiat currencies. But the longer term vision is for Bitcoin to replace other currencies. Let's project this ten years into the future:

1) Companies have already added BTC as a payment type over those ten years, as they did with Paypal over the last ten.

2) Companies keep cash ledger accounts directly in BTC wallets, rather than purchasing into BTC every time for every invoice.

3) With a wallet containing BTC already on hand, the transaction can be settled immediately. With no settlement period there is no risk of volatility during it.

4) Since companies widely accept BTC directly, you proceed to spend your internet money entirely within the Bitcoin ecosystem rather than exchanging back into local currency.

5) Okay, security is still a risk. But that may or may not post a sufficient obstacle to universal Bitcoin adoption. And also remember that Bitcoin accepts security risk in exchange for reducing other types of risk. Bitcoin is not at risk for government-induced inflation, for example.

I agree that at the moment that transacting in BTC for professional services is impractical. Yes, your cashflow today is more important than trailblazing for the world financial system ten years from now. But enough trailblazers could make for sufficiently widespread adoption to minimize the friction and risk.

After months of frustration, I recently set up a way getting paid using credit card via stripe through WordPress. Main advantage: knowing a deposit is paid immediately. For whoever's interested, I did a write up on what I did on my blog:

http://trenvopress.com/2014/08/stripe-for-freelancers/

thats cool thanks for sharing this!

Sending invoices and getting paid by standard bank wire transfer.

I actually use square cash and it's been great! No fees, it's simple. It's good as long as your pay doesn't exceed the weekly limit. (2500)

Bitcoin.

Reply on news.ycombinator.com