Receiving payments is a major issue amongst Nigerian freelancers offering services to global clients. From high transaction charges to failed or delayed payments, every day is a new challenge for these freelancers.
Luckily, a few platforms offer payment solutions for clients and freelancers. In this article, we’ll highlight these platforms and their reviews from people who have used them.
How to Pay Freelancers in Nigeria: 7 Platforms That Work
1. Wise (formerly TransferWise)
Wise offers a cheaper way to send money across borders. It was launched in 2011 and has gained popularity amongst freelancers and clients because of its friendly exchange rates and transaction charges. Wise is also a very good option for clients with cost-effective conversion solutions.
Pros
- Low fees: Wise offers some of the lowest fees for international money transfers.
- Speed: Transfers are often faster than traditional bank transfers, with many transactions completed within hours or instantly.
- Transparency: Clear breakdowns of fees and exchange rates before completing transactions make Wise highly transparent.
- Multi-currency accounts: Users can hold and manage over 50 currencies, making it convenient for frequent travelers or businesses operating internationally.
- User-friendly interface: The web and mobile apps are intuitive, offering a seamless experience for account management and transfers.
Cons
- Account deactivations: There have been complaints about sudden account deactivations, often without clear explanations, which can delay access to funds.
- Regulatory constraints: Users in some countries face stricter compliance measures, which can complicate the account setup or transfer process.
- Transfer delays in certain cases: Although transfers are typically fast, some users experience delays, particularly for larger amounts or transactions requiring additional verification.
2. Payoneer
Payoneer tops the chart among the most recommended platforms to consider when paying freelancers in Nigeria. With Payoneer, you can pay in your local currency, and the funds will appear in the freelancer’s Payoneer account.
Pros
- Low fees: Payoneer fees are 70% lower than bank transfers.
- Payment reminders: You can set up payment reminders to automatically receive a reminder
- Global payment accessibility: Payoneer allows freelancers to receive payments from clients worldwide, supporting multiple currencies and markets, including major freelancing platforms.
- Multiple payout options: Freelancers can choose to receive their earnings via bank transfer, Payoneer prepaid card, or directly into a local Nigerian bank account.
- Referral Program: Payoneer offers a referral program where users earn a commission when their referred users complete transactions, providing an additional income stream.
Cons
- Annual fee for prepaid cards: Payoneer charges an annual fee for using its prepaid Mastercard, which can be costly for those making smaller transactions.
- Transaction blocking: Some freelancers experience unexplained transaction holds or delays, which can disrupt cash flow.
- High Fees for certain transactions: While general fees are competitive, some services like requesting payments or international transfers outside the Payoneer network can incur higher charges.
3. Stripe
Stripe supports fast, safe transfers using various payment methods such as credit cards and mobile money. It also allows payment in multiple currencies.
Pros
- Wide range of payment options: Stripe supports various payment methods, including credit cards and digital wallets like Apple Pay and Google Pay, making it easy for clients to pay from anywhere.
- Developer-friendly API: Its customizable API allows businesses to integrate Stripe seamlessly into their platforms.
- Full documentation: Extensive documentation on setup and troubleshooting.
- Advanced tools: Features like Stripe Radar for fraud detection and Stripe Billing for subscription management help streamline payment processes.
Cons:
- High costs for low volume: Stripe’s per-transaction fees can be steep for small-scale freelancers or those with low transaction volumes.
- Too technical: Setting up and fully leveraging Stripe’s API often requires technical knowledge, which may not be accessible to all clients.
- No direct payouts in Nigeria: Stripe doesn't support direct payouts to Nigerian bank accounts, so freelancers may need to use third-party services to access their funds.
4. Bitcoin and Cryptocurrency
With the rise of digital currency, cryptocurrencies such as Bitcoin have emerged as a good payment method for freelancers to receive and make international transactions with much speed and low cost.
Pros:
- Less transaction fee: In general, cryptocurrencies take lesser fees than typical banking and online payment services.
- Faster International transfers: Cryptocurrency transfers are sometimes quicker compared to bank transfers.
- Decentralization: Independence from the policy of any central bank and influence of government regulation.
- Security: Cryptocurrencies leverage blockchain technology, which provides a high level of security and, in some cases, anonymity for transactions
Cons
- The value of cryptocurrencies can fluctuate significantly, which poses a risk for freelancers who may lose value if prices drop before converting to fiat.
- Limited platforms support cryptocurrency payments, limiting its practical usability for some freelancers.
- Complexity and learning: Freelancers new to crypto may face challenges understanding wallets, private keys, and secure storage.
5. Direct Bank Transfer
Bank wire transfers have been among the most reliable ways of paying freelancers in Nigeria. International payments are also received by many banks in Nigeria, although the charges may be high and payments are delayed.
Pros
- Security: Bank wire transfer is secure.
- Familiarity: Most clients and freelancers are familiar with bank wire transfers at one time or another.
- Access to cash immediately: The amount is directly wired into the bank account of the freelancer.
Cons:
- Higher Fees: Banks charge a significant fee for international transfers.
- Slower Processing Times: Transfers, especially international, can take several days.
6. Freelancer Platform Payment Systems
The inbuilt payment structures on platforms like Expaat such as milestone-related payments help to protect both the client and the freelancer.
Pros
- Ease of use: Payment systems on platforms like Expaat are designed to be straightforward. Clients and freelancers can manage payments directly through the platform without requiring third-party services.
- Security features: Many platforms use escrow systems, ensuring that funds are only released once the agreed-upon work is completed and approved by the client. This reduces the risk of non-payment.
- Automated invoicing: Freelancers can easily generate invoices, simplifying accounting and record-keeping.
- Currency conversion: Platforms often handle currency conversions, enabling freelancers to receive payments in their local currency.
- Dispute resolution: In case of payment disputes, platforms provide mediation services to help resolve issues fairly
Cons
- High fees: Freelancer platforms typically charge significant fees on transactions, often ranging from 10% to 20% of the project value.
- Withdrawal fees: Besides platform fees, there may be additional charges for withdrawing funds, particularly when converting to local currencies.
- Payment delays: Some platforms have mandatory holding periods before funds can be withdrawn, which may disrupt cash flow for freelancers.
7. WorldRemit
WorldRemit has become popular for Africa-based payments, especially for clients looking to pay freelancers who prefer mobile money and cash pickup.
Pros
- Multiple transfer options: WorldRemit offers various ways to send money, including bank transfers, cash pickups, mobile wallets, and even airtime top-ups, making it highly versatile for different recipient needs.
- Fast transactions: Most transfers are completed within minutes, particularly for mobile money and cash pickups, which is beneficial for urgent remittances.
- Global reach: WorldRemit supports transfers to over 130 countries and 70 currencies, making it accessible to users around the world.
- Ease of Use: The platform provides a simple and user-friendly experience via its website and mobile app, suitable for both tech-savvy users and beginners.
Cons
- Exchange rate markup: Although fees are competitive, WorldRemit applies a markup on exchange rates, which can make transfers slightly more expensive than some competitors.
- Transfer limits: There are limits on how much money can be sent, depending on the destination country and payment method, which may not suit users needing to transfer large sums.
- Delays for certain transfers: While many transfers are instant, bank transfers and home deliveries can take longer, ranging from one to several days.
SEE: 10 Reasons Why Companies Hire Freelancers Today
Conclusion
As remote work increases, so does the demand for how to pay freelancers in Nigeria. Be it Payoneer, Wise, or any other freelance payment solution, each has its benefit that best applies depending on the needs at a particular time.
This guide will take you through the best payment options for you. Pick any platform that works for you and settle your freelancers on time.
If you’re looking to work with the top 5% of tech freelance talent in Nigeria, visit Expaat.co to find and hire them.
