Protect Yourself From Scammers By Following This Payment Guide

For new freelancers, working online can be a little scary.

The fear of being scammed is quite common for first-time online workers.

Most of this fear likely stems from those old school work from home scams that left a bad taste in the mouth of many.

There’s nothing to be afraid of though.

We’re here to teach you a few things that can make your journey more convenient, less stressful, and a whole lot safer.

The 50/50 rule

The cardinal rule of freelancing, ALWAYS ASK FOR HALF UP FRONT.

As you can see with my bolding of that statement, I’m trying to emphasize this point as much as I can.

Asking for half up front is extremely important, arguably even the single most effective way to protect yourself from being scammed.

“But what if my client doesn’t want to pay half up front?”

Quoting Nancy Reagan, just say no.

Receiving half of the agreed upon payment up front and receiving the other half upon completion is pretty standard so any client who isn’t willing to pay half up front is either a scammer or extremely paranoid.

Either way, that’s not the kind of client you want to be doing work for.

Use a contract

The simplest way to avoid getting scammed by your clients is to always use a contact.

There are many free to use websites out there that let you create and send contracts.

Electronic signatures are just as good as those written in ink.

Here are some web apps that you can use to set up online contracts:

Viable payment methods

Now that your client is legally bound and therefore obliged to make payments, you need to determine the best method to receive your hard-earned cash.

A common option for many freelancers and clients is PayPal.

Personally, I’d strongly advise against using PayPal.

“But what would Jake have against such a reputable company?”

Well, I have a few problems with PayPal.

First of all, in the event of a chargeback, PayPal tends to favor the complainant over the defendant.

PayPal makes it all too easy for baseless chargeback claims to be made.

Even if you’re okay with getting money deducted from your account for no reason, there’s still the issue of high 

fees, poor customer service, and lackluster processing speed.

TransferWise is arguably the best international money transfer service out there and I highly recommend it.

There are multiple factors that convinced me that TransferWise is the best option, let me go through them.

First of all, TransferWise uses a mid-market rate for all transfers.

This means that rather than setting an artificial exchange rate in order to profit (like most other transferring services do), TransferWise uses the real exchange rate when converting currencies for international transfers.

TransferWise is FCA regulated meaning your funds are in good hands.

The transfer time can vary depending on multiple factors but never exceeds 4 working days.

When you use TransferWise, you can click the send button without any doubts in your mind of becoming a victim of hidden fees.

TransferWise has a minimum fee of $5 for all transfers and charges 9.9% for transfers of $500 or more.

You’re probably thinking that a 9.9% fee is outrageous.

However, because of the amount of money that you save by having your money converted with the mid-market rate, you still end up paying less than you would have with the other methods mentioned here.

The best part is that the TransferWise fee is fixed, clearly stated, and stands alone.

$5 minimum, 9.9%.

That’s all you’ll have to worry about when you send with TransferWise.

No additional charges, no hidden fees, nothing.

My criteria for judging a money transfer service are price, speed, reliability, and safety.

TransferWise excels in all of these areas

Make sure to check out their information-packed Support Center.

If you don’t have a bank account, you could consider using good ol’ fashioned Western Union as they give you the option of picking up your money at one of their locations worldwide.

If your local currency isn’t supported by most services then you should consider using Payoneer.

The fees and processing times are nothing special but they support an astonishing 150 currencies!

I calculated the transfer of 1,000 USD to the Philippines (where I reside) with each of these services.

Of the four payment methods mentioned in this list (Western Union, TransferWise, PayPal, and Payoneer), only TransferWise was able to result in me receiving over 50,000 PHP despite the fact that the mid-market rate is 1:50.890 as I write this.

It just goes to show how much money you’re losing when your money isn’t converted at the mid-market rate.

It’s worth noting that I was unable to make calculations for Payoneer due to the fact their fee structure yields conditional charges that vary from transfer to transfer.

The bottom line

By taking proper measures to protect yourself from scammers you’ll never have to worry about losing your hard-earned money.

If you remember to use a desirable money transfer service, have your clients sign a contract, and ask for half of the payment up front, it’ll be smooth sailing from here on out.

We hope that you benefit from this blog post, make sure to stay tuned for the next one!