In 2022, there were about 435 million participants in the online gig economy worldwide, according to the estimate provided by the Bank for International Settlements (BIS). For those who receive orders through freelance exchanges and other digital platforms, it matters when the earned money will become available and how much it will cost to withdraw it. This is reported by Minfin, referring to BIS research.
Why instant transfer does not mean instant payment
The client can pay for a trip or delivery immediately, while the performer receives the money after a few days. The payment system determines how quickly the transfer will go after it is sent. When to send the money depends on the platform's rules. For the driver, this means that fuel for the next shift sometimes has to be paid out of pocket while earnings for the previous one are still unavailable.
The BIS study cites the results of a PYMNTS survey from 2017. At that time, 84% of respondents said they would take more orders if they received payment faster. The development of systems like Brazil's Pix and India's UPI reduces the time of the transfer itself, while the payout schedule remains a separate condition of the platform's operation.
For Ukrainian freelancers receiving transfers from the EU, the amount after all expenses is also important. During international payments, the following may be charged separately:
- the platform's commission for the completed order;
- a fixed fee for withdrawing funds;
- conversion costs if the order currency and the account currency are different.
For example, a conditional fee of $2 for withdrawal will take 10% from a $20 payout or 4% from $50. If the platform allows combining five payments of $20 into one transfer, the fixed fee will decrease from $10 to $2. The saving will be $8, but the money will have to wait longer.
How order history can change freelancers' crediting
Platforms see how often a person works, how much they earn per order, and how their income changes from month to month. With the client's consent, this data can help the bank assess the creditworthiness of a person who has several sources of income. For the performer, this can simplify the verification of income when applying for a loan.
For international payments, BIS also considers connecting national instant payment systems. Fewer intermediaries can reduce the time and cost of transfers. For Ukrainian performers working with clients in euros, the preparation for SEPA is also of separate significance. Even with a faster bank transfer, the final amount will depend on the platform's rates and conversion conditions.