The Bureau of Labor Statistics says approximately 3.4% of the workforce was working remotely before 2020. That population increased drastically as a result of the Covid-19 pandemic, and some estimate that 25-30% of the workforce will continue working-from-home multiple days a week by the end of 2021.
As more people look to online work and permanent remote employment, businesses need reliable applications to allow for secure, recurring payments to those employees – even those on the other side of the world. Depending on your business location, currency, payment amounts and frequency, there are several options available for fee-free, safe and convenient remote payment. Whether you’re on the sending or receiving side of remote worker pay, here’s a wide-ranging list of payment service apps to consider for your business.
With 325 million active users, PayPal is an industry pioneer that has become the most well-known and widely used digital payment service in the world. Early success came after it was acquired by eBay in 2002 and widely used for online consumer purchases. Today, it’s grown to serve both B-to-C and peer-to-peer (P2P) needs. Unlike many of its competitors, PayPal is available in 200 countries and supports 26 currencies.
Fees are waived for single payments funded by a PayPal Cash card or a linked bank account (the sender only pays a fee to use a credit card) but the app charges the recipient a 2.9 percent fee for any transaction. Outside the US, that jumps to 4.4 percent and there’s an additional fixed fee based on the currency. Other fees may apply when it’s time to transfer funds from your PayPal wallet to your local bank account.
Unlike other apps, contractors are required to set up a PayPal business account to receive funds. On the payor side, PayPal produces an automatic 1099-K form for contractors at the end of each year (it’s not a service you’ll find on other apps). Security is another aspect that separates PayPal from its competitors. In fact, PayPal considers security such a priority that it offers financial rewards to computer security experts who discover any breaches, flaws and vulnerabilities in PayPal’s digital data defense system. The app offers an optional two-step verification process, monitors transactions around the clock and protects them with secure encryption technology from beginning to end.
Bitcoin (still the prime use case for cryptocurrencies) is a fully digital currency or value-transfer method. It’s a bit different but this doesn’t mean it should be discounted. Bitcoin payments are transactions between two parties without going through a financial institution. A private network of computers processes the payments and records each transaction in blockchain (a decentralized, public ledger), so some say it’s actually the most secure way to transfer money.
You can send and receive payments regardless of where you are in the world, as long as you have an Internet connection and a Bitcoin or cryptocurrency wallet:
● Cloud wallet: used on cryptocurrency exchange sites
● Software wallet: installed on a computer
● Mobile wallet: on a phone
● Hardware wallet: similar to a flash drive, it’s the most secure option
because it’s mostly kept offline
As of September 2020, only 54 million users have cryptocurrency wallets (for Bitcoin and others), so it certainly has room to grow. As public companies are starting to invest real assets into Bitcoin, and with the recent announcement that PayPal will be supporting the top five cryptocurrencies, the platform is expected to become more widely adopted worldwide.
#3 Cash App
Cash App is primarily a P2P payment service but also allows automated clearing house (ACH) payments where employers can deposit wages directly into employee accounts. Square, Inc. (one of the largest payment processing companies in the US) launched the platform in 2013 in an effort to compete with PayPal-owned Venmo, as well as Google Pay and Apple Pay. During the pandemic, Cash App nearly doubled its monthly active users to 40 million.
Cash App customers complete transactions using unique identifiers called $Cashtags. Cashtags act as shareable urls which minimize the release of private contact information while transfering funds. Payments to peers and bank account transfers are fee-free and take about one to three days. The app imposes a 1.5 percent charge for expedited transfers to a linked debit card, and a 3 percent charge for using credit cards to send money. The platform also offers investment options with cryptocurrencies and stocks.
#4 Facebook Pay
Having launched in November 2019, Facebook Pay is by far the newest of the payment services included in this list. Unlike other services, it wasn’t specifically designed as a revenue-generating tool; It was created to add convenience with a secure and consistent payment experience across Facebook, Messenger, Instagram and WhatsApp. Because Facebook is consistently among the top 10 most visited websites in the world, this service is expected to gain wide adoption.
Existing Facebook users can link a debit card, credit card or a PayPal account to their existing profiles and send money through the company’s platforms without downloading any additional apps. Transfers are instant and withdrawals will take a few days depending on your bank. Facebook Pay also employs anti-fraud technology and requests a PIN with an option to utilize biometrics on your device. Overall, there’s great potential for growth because it’s free and available on an already widely used platform.
This payment service veers away from social use and is more for freelancers, professionals and businesses. Payoneer is accessible in more than 200 countries with 150 different currencies.
Payments between Payoneer users are instantaneous, and they’re free in dollars (USD), euros (EUR), pounds (GBP) and yen (JPY). There are corresponding fees for other services: withdrawing the funds to your personal bank account can incur an additional fee of up to 2 percent of the transaction total. Payoneer withdrawals also can take between two to three days for US accounts and two to five days globally.
After nearly 20 years, UK-based Skrill is available in over 130 countries and more than 40 currencies. It’s popular with gambling sites as online casinos prefer Skrill over PayPal because it includes more currencies.
Transactions and withdrawals are free for US users, but some fees apply for other countries. Skrill also charges a 3.99 percent fee for its currency conversion services. Keep that in mind when using the app to pay international workers. Money sent through a credit or a debit card will be instantly credited to the receiver’s account, but bank transfers take two to five days.
One unique feature is Skrill’s loyalty program called Knect. Users can earn points and eventually use them as cash or for other rewards.
TransferWise, founded in London in 2010, allows you to send funds to over 80 countries in more than 50 currencies. The company moves about $5 billion per month and is regulated by the Financial Conduct Authority of the UK.
It’s a cost-effective international payment route for businesses with remote workers, and charges minimal conversion fees on the current exchange rates. The company keeps its rates low by transferring funds through local banks instead of directly transferring between the sender and an international recipient.
Funds can be sent through debit card, credit card, wire transfer or ACH. The rates vary for each route, as does the turnaround time (this can be anywhere between two hours to five days depending on the currency used and location of parties involved). Withdrawals are free up to certain monthly currency limits; beyond that they add a 2 percent fee.
Venmo was first established in 2009 as a convenient way for friends to split a bill. It’s become so popular that some even use the term as a verb: “I’ll Venmo you.”
Since it was purchased by PayPal in 2015, Venmo surpassed 40-million users. Venmo functions just like any person-to-person payment platform but with an option to send personalized messages with emojis, and the ability to share transaction history with contacts for extra engagement. The downside is you likely lose the money if you select the wrong recipient.
Standard features like sending money from linked accounts are free, and users can transfer funds to their bank account within one to three days at no charge. However, the app charges a 1 percent fee for instant withdrawals and a 3 percent fee to send money through a credit card.
#9 WeChat Pay
WeChat is one of the most widely used multi-purpose platforms in the world with over one billion users. It started as a social media and messaging platform in 2011, but expanded to offer online payments with WeChat Pay in 2013. Initially, it was only available to individuals with bank accounts in China, Hong Kong, Malaysia and South Africa. Visitors to China (including Americans with bank accounts in the region) gained access in late 2019, however, the US banned WeChat for information security concerns starting Sept. 20, 2020.
The app is mostly free for standard transactions. It charges a minimal .10 percent for withdrawals exceeding the equivalent of about $153. Merchant transactions on the other hand, are charged up to 1 percent depending on their industry. WeChat Pay doesn’t provide a clear timeline for when transfered funds appear in a user’s linked bank account after withdrawing from the online wallet.
While Zelle is another P2P mobile transfer application, it was developed by more than 30 major US banks. It has a standalone app, but it’s also integrated in many banks’ existing mobile apps. This integration enables Zelle transfers to happen instantaneously. However, it could take two to three days to complete the transfer if the users’ bank(s) aren’t affiliated with the app. Unlike some of its competitors, Zelle does not withdraw from credit cards. It’s a free service that’s only accessible through a mobile device.
Anyone with a US bank account may receive money – even if they are not a Zelle user – as long as they provide an email address or mobile number. Zelle texts or emails the recipient when a payment is made, and gives them a link to accept it. There are no recipient amount limits, but some banks impose minimum and maximum monthly transfer amounts. That said, payors should calculate their monthly remote worker pay before landing on Zelle for the long term.
The Best Way to Pay Remote Employees
There’s no right or wrong way to pay your independent contractors, freelancers and other remote workers. As we’ve pointed out, there are several options to consider (and even more we didn’t mention. The bottom line: whether you’re sending payments within the US or abroad, take the time to research the options and choose one (or more) payment services that fit your business’ (and your employees’) needs.
Are You Primed for Reinvention?
People are reimagining success in the rapidly changing digital age. They may even be earning income through one or more of the remote payment services mentioned here. To learn more about what reinvention could mean for you, click here.