7 Ways Deel Contractors Can Get Paid Off-Platform (+ What To Look Out For)

As an independent contractor, you're in control of how you get paid. As your client list grows and your business matures, you’ll likely look into more efficient and scalable methods of payment to suit your needs.

While Deel offers a secure, easy, and diverse range of payment options, you can also choose to get paid through a variety of other payment methods outside of the platform.

In this guide, we'll explore seven common off-platform payment methods and key considerations for each, such as speed of payment, security, and fees.

Cash

When working as an independent contractor, it's important to think carefully about accepting cash payments, both for local and international work. 

While cash can reduce the risk of online fraud, handling physical currency increases the chance of loss or theft, without a digital record to track it. Cash transactions are fast, and you don’t have to worry about transaction fees, but they can also pose logistical challenges, especially when working internationally.

Cash may seem simpler to document, but the lack of proper records could lead to disputes and make it more difficult to keep accurate records for tax purposes. Authorities may also scrutinize cash payments more closely, making electronic methods more transparent and compliant. 

When it comes to international work, it's important to consider the practicalities of using cash, such as currency conversion and legal restrictions, which may make electronic payment methods a more viable option. 

Contractors must comply with the legal requirements when accepting cash payments, as such transactions may face restrictions and reporting obligations, with non-compliance resulting in penalties.

Physical checks

For local payments, physical checks can offer a tangible and secure payment method, serving as clear documentation for both parties. However, there may be delays in payment processing. While it typically takes two business days for a check to clear, banks may place holds on checks if:

• It’s the first check you’re depositing from the payer
• The check is for a large amount of money
• The check is from an international bank
• Your bank account is new
• The check is deposited through a mobile banking app or an ATM

You typically only have access to a portion of the funds received until the check is completely cleared. Most checks are only good for six months. After that, banks are not obligated to honor them, though this depends on your bank’s practices.

International checks can also present additional challenges, including longer processing times due to currency conversion and cross-border banking procedures. Security risks, such as loss or theft, apply to both local and international scenarios. 

Local bank transfers

A local bank transfer refers to the use of a peer-to-peer payment method to send and receive money across borders. Unlike traditional international bank transfers, local bank transfers operate within a network of individual accounts, facilitating a more direct and cost-effective means of transferring funds.

By leveraging a peer-to-peer network, local bank transfers bypass the complexities of multiple corresponding banks involved in traditional international transfers. This streamlined process contributes to faster international transactions, typically clearing within two business days.

The use of local bank accounts allows for more flexibility in currency exchange, enabling contractors to receive funds in their local currency without incurring additional hidden bank charges.

While local bank transfers are gaining global traction, they may not be universally available in all regions. Some countries or individuals may still rely on traditional international bank transfers due to infrastructure limitations.

The success of a local bank transfer relies on the availability and effectiveness of money transfer services such as Wise, PayPal, or Revolut. If these services face disruptions or limitations, it could impact the efficiency of the transfer.

See also: What is a local bank transfer?

International bank transfer (SWIFT)

International bank transfers through the SWIFT network are a common method for independent contractors to receive payments, especially if they work with international clients.

SWIFT, or the Society for Worldwide Interbank Financial Telecommunication, is a messaging network used by banks globally to facilitate secure communication and transfer of funds between financial institutions. 

SWIFT transactions often provide a secure means of transferring funds, reducing the risk of fraud or unauthorized access. The documentation involved in SWIFT transfers is usually comprehensive, offering a transparent record of the transaction, which can be beneficial for financial record-keeping and auditing purposes.

However, one significant disadvantage is the potential for higher fees compared to alternative payment methods. Both sending and receiving banks may charge fees, and unfavorable exchange rates can further diminish the overall amount received. 

An often overlooked aspect of SWIFT transfers is the possibility of delays or complications arising from intermediary banks involved in the transaction. These intermediaries can introduce additional processing time and, in some cases, may lead to discrepancies in the final amount received by the contractor. 

Independent contractors should be proactive in understanding the specific banking processes involved in their transactions, including the potential role of intermediaries. 

Despite these considerations, many contractors find SWIFT transfers to be a convenient and widely accepted method of receiving international payments, provided they are mindful of the associated challenges and take appropriate measures to mitigate potential risks.

Wire transfers

A wire transfer is an electronic funds transfer method that directly moves money from one bank account to another.

Wire transfers provide contractors with a swift and efficient means of receiving funds, reducing processing time compared to traditional methods like checks. This is particularly beneficial for contractors working on time-sensitive projects. Additionally, wire transfers can be a secure payment method, minimizing the risk associated with lost or stolen physical payment forms.

One primary concern is the potential for fees associated with both sending and receiving wire transfers. Depending on the banks involved and the nature of the transaction, these fees can significantly eat into the contractor's earnings. For example, in Canada, incoming domestic and international wire transfers can cost you up to $17.50 CAD per transfer.

Wire transfers typically lack transparency in terms of tracking the payment's progress, leading to uncertainties about when the funds will be available. Another aspect to be cautious about is the susceptibility to fraud, as wire transfers can be irreversibly processed once initiated.

During the transaction, intermediary banks may deduct additional fees, which will reduce the final amount received. If you are dealing with international clients, you should also be aware of currency conversion fees, which can impact the overall payment.

See also: 7 Deel Withdrawal Methods for Contractors Beyond Wire Transfers

E-wallets

E-wallets, or electronic wallets, represent a digital form of payment increasingly used by independent contractors worldwide. 

Essentially, an E-wallet is a virtual storage space for financial information that allows users to make electronic transactions. PayPal, Payoneer, and Wise are commonly used for such transactions.

One notable advantage for independent contractors is the efficiency and speed of transactions, especially when dealing with international clients. Unlike traditional bank transfers that might involve delays and hefty fees, E-wallets offer a quicker and often more cost-effective way to receive payments. This can enhance the overall convenience of financial transactions for contractors, streamlining their cash flow.

However, E-wallets come with the potential for fluctuating exchange rates, particularly when dealing with international clients. E-wallets may also impose transaction fees, impacting the net amount received by the contractor. 

Some platforms may have restrictions or delays in transferring funds to bank accounts, affecting liquidity. Contractors should carefully evaluate the terms and conditions of specific E-wallet services to ensure they align with their financial preferences and needs.

Cryptocurrency

Cryptocurrency, a decentralized form of digital currency, operates on blockchain technology and has gained popularity as an alternative payment method for independent contractors worldwide. 

One key advantage is the potential for faster transactions across borders, eliminating the delays associated with traditional banking systems. Additionally, the absence of intermediaries often results in lower transaction fees, enhancing overall cost efficiency. 

Contractors receiving cryptocurrency payments may appreciate the relative ease of financial inclusion, especially in regions with limited access to traditional banking services.

However, the volatile nature of these digital assets poses a risk of value fluctuations, potentially impacting the contractor's income. The regulatory landscape surrounding cryptocurrencies also varies globally, leading to potential legal complexities and tax implications. 

For context, there are over 40 countries that have implicit bans on cryptocurrencies, which means the government has placed restrictions on banks and financial institutions from dealing with crypto or offering services to crypto providers. 

Even if cryptocurrency is legal in your country, it may not be an acceptable form of payment. Some countries, such as the US and Canada, require wage payments to be made in fiat currency to comply with labor standards. Contractors should stay informed about the tax obligations associated with cryptocurrency income in their respective jurisdictions to avoid unintended consequences.

See also: How to Get Paid in Bitcoin as a Contractor or Employee

Freelancing platforms

Freelancing platforms, such as Upwork or Fiverr, are online marketplaces that connect independent contractors with clients looking for specific services, facilitating a flexible and remote work arrangement. 

These platforms often act as intermediaries, holding funds in escrow until the project is completed. This provides a level of security for both parties, ensuring that the contractor gets paid for their work and the client receives the agreed-upon deliverables.

Freelancing platforms often impose commission fees (a percentage of the project value) and charge additional fees for premium features, thereby diminishing overall earnings. The discrepancy in payment cycles, either due to fixed schedules or delays linked to project completion milestones, can also create financial challenges for contractors.

In some cases, contractors may encounter challenges with payment disputes. While freelancing platforms typically provide mechanisms for dispute resolution, understanding the terms and conditions governing these processes before signing up is crucial. 

Be sure to review the platform's withdrawal policies and associated fees as well, and incorporate this information into your financial planning to avoid unexpected deductions and delays.

The Deel solution

While contractors on the Deel platform can use any of their preferred channels to invoice and get paid by clients, using Deel allows for a smooth and centralized solution that takes the hassle out of the process.

Deel partners with banks and best-in-class payment providers so contractors can easily access funds from anywhere in the world.

What is the Deel Card?

The Deel Card allows verified contractors to spend directly from their Deel balance as soon as they’re paid on the platform. 

The Deel Card can be used as a debit card without the hefty fees usually charged by banks, is compatible with Google Pay and Facebook Pay/Meta Pay, and can easily be integrated into the Google Wallet app. 

For contractors in countries with volatile currencies, the Deel Card presents a solution. By receiving earnings in USD, workers gain stability, shielding themselves from currency fluctuations. This approach also unlocks limitless global spending opportunities, both online and in-person.

Virtual Deel Cards are accessible in 73+ countries, while eligible contractors in specific regions, including Argentina, Colombia, Mexico, Nigeria, Serbia, the United Kingdom, and the United States, can request physical Deel Cards.

What is Deel Instant Card Transfer?

Deel Instant Card Transfer uses the Mastercard and Visa networks to deposit money directly into your bank account in seconds through a card-to-card transfer. It operates seamlessly worldwide and is unaffected by bank holidays, unlike other payment options such as bank transfers and SWIFT.

Deel Instant Card Transfer is currently available in more than 60 countries—see the most recent availability or how to use Deel Instant Card Transfer for more information.

See how Deel streamlines the contractor experience

Choosing the right payment method is a crucial decision for independent contractors. While Deel provides a comprehensive solution, understanding your options for off-platform channels empowers you to make informed choices based on your preferences and business needs. 

Whether you opt for traditional banking or the speed of E-wallets, the key is to align your choice with your unique circumstances, ensuring a smooth and efficient payment experience.

There are many other benefits of getting paid through Deel aside from the ease of payment, including access to tax experts, health insurance discounts, perks, and more.

See how Deel facilitates easy payments and more by signing up today.