Today I shall say why PayPal and Skrill (Moneybookers) are my preferred freelance payment methods and will share a few tips and tricks why have both active and how to get the most out of them.
If you are interested in PayPal and Skrill as freelance payments methods in general though, keep on reading!
First of all, let me say I am using an account in an Eastern European Bank.
This matters as freelance job boards like oDesk, Elance, etc. have various payment options for freelancers including:
- Skrill (Moneybookers)
- Local funds transfer
- Payoneer card
- Direct deposit / ACH
- Wire transfer
The fees vary per site and per country – e.g. I know Payoneer is a very popular payment method in India, Pakistan, and some more. Whereas, Direct deposit/ ACH is a popular method for the US as it is free for US bank accounts. For me though, the lowest fees both from oDesk and Elance are via PayPal and Skrill (Moneybookers). I am using those freelance payment methods so I’ll share my insights about them only.
First off – be sure to have a bank card
I know it sounds obvious but apparently it isn’t so better say it than not 😉 You can use either credit card, or a debit one. My advice is that if it’s a debit card, make it a Visa Electron as you’ll be able to use it for other things online, too – e.g. hotel bookings, air plane tickets reservation, online purchases, etc.
Once you have your bank card issued, you need to register with PayPal and Skrill (Moneybookers). You need a valid email address for that. After you register, you’ll need to give some personal data like name, birthday date, address, phone number. If you plan on using your profiles for long, make sure your personal data is correct. With time, as the money you send and receive through those accounts grow, you will need to pass various verification processes (mandatory by law) such as ID verification, or address verification.
Make sure your default currency is the official currency of your country or USD
This way you will save the fee you’d have to pay for currency converting and will pay only the fee for withdrawing the money from the freelance site to PayPal or Skrill (if any).
If you are in an EU country but don’t still have Euro as official currency, then your default currency in PayPal would be euro. However, freelance sites most often use USD. So when you withdraw your money from lets say oDesk to Paypal, it will be converted from USD to Euro and you’ll pay a fee. Then, when you withdraw your money from PayPal to your bank card, it will be again converted from Euro to your local currency and you’ll pay a second fee. Save yourself the first fee by setting your default currency to USD.
If you are in an EU country and its official currency is euro – then your default currency in PayPal would be euro as well – just make sure it IS so to avoid the second currency converting fee I mentioned above.
And if you are in a whatever country the currency of which is not maintained by PayPal, make sure your default currency is USD so that you’d pay only the second converting fee when withdrawing your money from PayPal to your bank card.
To recap, you’d potentially pay the following fees when withdrawing money from PayPal and Skrill to your bank card:
1) fee for withdrawing money from the freelance site to PayPal or Skrill (oDesk has $1 fee and Elance has no fee for this)
2) currency converting fee for withdrawing the money from the freelance site to PayPal or Skrill (your default currency is different from USD)
3) currency converting fee when withdrawing money from PayPal and Skrill to your bank card (if your default currency is different from your bank card currency)
4) bank fee for withdrawal money from PayPal and Skrill to your bank card (this fee varies by country and bank – for example, mine is $2.5 for a transaction; there used to be information for a percentage fee but they never took different from $2.5 amount).
Confirm your bank card in PayPal and Skrill
Once you set your default currency, fill in your bank card number and follow the instructions on the specific site. Although very similar, these 2 sites have their own rules and specifics so be sure to follow the instructions you get from the site while confirming your card.
I use primarily PayPal and Skrill (Moneybookers) is a back-up option for me – so I’ll tell you more about PayPal.
At first, you will have a lot of limitations on PayPal –
For withdrawals as well as for sending money. Don’t be afraid – read carefully their FAQ section, everything is explained. And if something isn’t – you an always contact their support – they seem to be improving their customer service a lot recently 😀
Make sure you see your money in PayPal after you withdraw it from the freelance site
When withdrawing from oDesk, usually you see your money in PayPal instantly. When you withdraw money from Elance, it takes 2-3 days to process and transaction request – but you will get email from Elance when they send you the payment and shortly after that (within a few hours or less) you’ll get another email from PayPal notifying you have received money from Elance. This time-frame may vary depending on your bank.
When I withdraw money from oDesk to PayPal or Skrill and then to my bank card – the fee comes to $3.5 total ($1 for oDesk and $2.5 for PayPal or Skrill) plus a minor currency converting fee for my bank.
When I withdraw money from Elance to PayPal or Skrill and then to my bank card – the fee comes to $2.5 total (no fee for Elance and $2.5 for PayPal or Skrill) plus a minor currency converting fee for my bank.
I can only imagine these fees vary from country to country so be sure to check with PayPal and Skrill what their policy for your country is.
When you reach the threshold of $2500 total amount of money being deposited to your PayPal account, it will be temporary limited.
You will still be able to withdraw funds or send payment. But in relations to some European laws against money laundering, you will have 180 days to verify your identity and address – otherwise, your account will be terminated.
You can verify your identity with a copy of your national ID card. And to verify your address, you need to send them a document, where your name is visible along with the address you have provided in your PayPal account. For example, if you own a property or you get utility bills under your name (not mobile phone though) – you can give those.
If you don’t have any of these documents, you can ask your bank to give you a bank statement. In my country, it is a lengthy and costly process to do that so I managed to get a stating that [my name] is the owner of the [bank card number] with a stamp from the bank agent. It was not even in English but it did the trick – so explore your options locally!
At some point, when your work kicks off and you start generating decent cash flow, you’ll notice you have a daily withdrawal limit of $500. You can lift that if you meet the following criteria:
- You need to have verified your ID and address with PayPal
- You need to be a registered user of PayPal for at least 90 days
- You need to not have any open complaints from buyers
- You need to have no account limitations for the last 30 days
- You need to have received to your PayPal account at least $10K USD since opening you account.
You can lift your daily withdrawal limit by verifying a bank account along with your bank card or simply email support stating you meet the above criteria and your wish to lift your daily withdrawal limit.
Because having a back-up freelance payment method is always good. If there is a problem with one site’s system, you can always use the second one instead of waiting and wondering if and when you will be able to withdraw your earnings. Which of the two sites you will use as your primary freelance payment method is totally up to you and as per your personal preferences. I use PayPal and I have never had problems with it so I cannot say if it is better than krill or not 😉
I hope many of you would find this post useful and be sure to leave some comments and/or questions, too!
Note that this post contains some affiliate links – which only means that if you choose to register through those links, i may be eligible for a small commission at some future moment, at no additional cost to you.