To really soak up the freedom of solo life, you need to fund it, and that means doing the groundwork before you start working. One of the overlooked parts of that is deciding what freelancer payment method is right for you.
It should be simple, right?
It’s the 21st century, so there’s no cash in the mail, checks, or paid couriers dropping off an envelope. But even within the world of online payments, there is a real spectrum of products out there.
To make things easy for you, we’ve put together a list of six freelance payment methods, each with an explanation of its best use cases. We’ll cover domestic transactions as well as the more complex world of international payments, wire transfers and PayPal alternatives for freelancers.
But first, let’s start by answering a few important questions around the topic.
Choosing the right freelancer payment method can make life easier while it saves you money. Benefits of finding the best method for you include:
SEPA (Single Euro Payments Area) payments are cashless transactions to other countries that are as easy as national payments. They are perfect for freelancers with clients all over the European Union, as well as other European countries like the UK, Iceland, Switzerland, and Norway.
All of the best payment apps for freelancers will allow you to receive payment in multiple currencies, but expect to lose a small percentage through conversion and transaction fees. Make sure to choose a platform that is available both in your country and your client’s country, and compare transaction fees before you decide.
If all of your clients are based in Spain, you’re in luck! The following two payment pathways are quick, safe, and usually free. Include the right details when you create your invoices and there’s not much else to it!
Domestic bank transfers are among the most commonly used payment methods for freelancers in Spain, and you can see why. They’re easy to execute, easy to record, and almost always free.
As the go-to payment method for companies, pretty much anyone you work with will be familiar with them and you’ll receive payment within a day or two at the latest. Your clients can also set up standing orders if you’re on a retainer so you never have to worry about chasing up missing payments.
Banking in Spain can be pretty Draconian and many accounts charge an annual fee if you don’t use it to receive your salary, or nómina, every month. Of course, most freelancers don’t have a fixed monthly salary, so make sure to clarify these fees before registering.
Side note: expat freelancers in Spain are often shocked about ATM fees when withdrawing cash. As a general rule, if you’re withdrawing from a cashpoint that doesn’t belong to your bank, you may be charged €2 or even more.
Bizum is available through almost all Spanish banks and lets you send instant transfers for free using only a phone number. This makes it great for making sure the Scrooge of the group pays up after dinner, but you can just as easily use Bizum as a freelancer payment method?
Freelancers with pop-up stores or workshops can benefit hugely from Bizum in this cashless society. Now, nobody can do the internationally recognized Flank Pat before admitting they don’t have cash. All you need to do is display your phone number and you can cut out the excuses your clients may have. With instant payments, you’ll get confirmation in seconds before moving onto the next customer.
Phone numbers can be tricky to get right for people in a hurry, people with impaired sight, or people with impaired minds (hi there, festival goers!) There are in-app steps that stop your payments going to the wrong person, but it isn’t the most efficient freelancer payment method if your clients don’t already have your number saved.
While working for a foreign company can be rewarding, you will have to think carefully about the freelancer payment method you choose. While domestic transfers are almost always free, international payments open up the door to conversion and transaction fees, so you need to be prepared.
Wire transfers are to international payments what a horse and cart is to the automotive industry. Transactions between EU countries and a few other participating states can use SEPA to make international payments as seamless as domestic transfers, but other countries will face heavy fees.
Even so, international wire transfers are the preferred method for a surprising number of clients around the world. Whether they don’t have the headspace to explore other options or are simply happy to pass on the costs to you depends on the person, but like… yeah, not great.
If your clients are savvy, they’ll likely try to push you away from international wire transfers, but we’d highly recommend preempting them and exploring other options before you start writing up your invoices.
Sure, wire transfers are pretty convenient. Banks all over the world are on the SWIFT system, so you can offer your services to pretty much anyone. You also get your money directly into your bank account, so there’s no need to actively withdraw your cash from another platform.
Where do we start? Ah yes, probably with the ridiculous, unpredictable conversion and transaction charges — and that’s before you find a bunch of hidden costs further down the line. They’re also a playground for scammers who want your cash, which can be dangerous for freelancers with many different one-time clients. Finally, while the technology is improving, there is still very little in terms of verification around wire transfers. Yes, a slip of the finger could lead to your money sailing into someone else’s bank account.
Starting off with the OG of online payment systems, PayPal has long been a leading choice for freelancers to receive payment. The fact that almost everyone in the world knows about it is a reassurance of its quality, but it isn’t ideal for every situation.
PayPal covers more than 200 countries and 25 currencies, but your clients will have to have an account to pay you. That said, it’s an intuitive platform that offers some pretty good deals through PayPal partners. Once you’ve received your money, you can pay for certain items directly from your account, or withdraw it for free in a few days.
As so often happens with the big-name option, it’s relatively expensive. For international payments, you’re looking at around 3% to 4% on a conversion fee alone, plus a service fee. Similarly, if you want to withdraw your cash instantly, there’s another fee. These fees put a dampner on PayPal as an international payment method for freelancers, and anecdotally, most only use it when a client demands it.
Heads up! There are heaps of PayPal alternatives for freelancers out there, all with different rates and eligible countries. Take a look into Payoneer and Stripe as examples.
Anyone who has lived in another country and had to call the bank of mum and dad for a cash injection to keep them going will already be an expert in Wise, previously known as Transferwise. Wise was created with international transfers in mind and is simple to use, clearly guiding you through each step of making and receiving payments.
Founded to help individuals avoid hidden fees, Wise is all about transparency and offers better exchange rates than banks and PayPal. Available in over 40 countries and 55 currencies, it is one of the best payment apps for freelancers with both domestic and international clients, and most transfers are done in seconds. You can withdraw your money for free in no time, which is a great help if you need quick turnarounds.
In all honesty, Wise is a pretty safe bet for international payments. There are some new products on the market with lower transaction fees, but they often have strange conversion charges that are less transparent.
Along with competitors like N26, Revolut is a virtual bank account that exists in app form on your phone and desktop. It has everything you need for a business account, and some great features to use on a personal level.
Revolut gives you a multi-currency account so you can escape conversion fees. This is an ideal payment method for freelancers who live in Spain, but spend a lot of time in a country with a different currency, like the UK. Of course, this does make life a little tricky when sorting out your taxes, so reach out to an accountant who can sort everything out for you.
Revolut works just as well for domestic clients too as you can set it up for free and there are no inactivity fees.
We’re scraping the barrel for cons here… Some users say that customer service isn’t all that great, and Revolut’s guides aren’t up to scratch. For a fully online bank, you might expect a help center to be given a higher priority, but all in all, Revolut has a lot going for it.
Xolo is designed for you to send professional, compliant emails with just a few clicks of a button. Even if you’re having One of Those Days™, you can track your invoices and compare them against your bank, Wise, or PayPal account.
But Xolo goes far beyond ensuring you get paid. Our all-in-one service takes care of all those necessary but soul-destroying parts of running a freelance business:
⚡Automated invoice creation
✍️Quarterly tax returns
🗣️Personalized business advice
So if you want to manage your payments like a pro without putting in the hard work, sign up for Xolo and see what all the fuss is about.
James McKenna has been a freelancer since 2017, working in subtitling, translation, and his main passion — writing. He loves nothing more than falling down a rabbit hole, a habit that has helped him specialize in areas as diverse as biotech, climate change, higher education, and business strategy.
Based in Barcelona, James learned the ropes the hard way, making mistakes that turned into valuable learning experiences. After working hard to establish himself, he is now working smart, and is always on the lookout for ways to streamline his business.
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