USD Banking for Freelancers in Emerging Markets - Why So Difficult?
CEO, Elevate Pay
Jul 24, 2023
5 minute read
The past few years have not been easy. The supply chain carnage caused by COVID-19 followed by a rise in conflicts has resulted in rampant global inflation that, as usual, has hit emerging markets the hardest. Freelancing in these times has been a lifeline to many, allowing them to leverage their skills to generate income from global opportunities. However, securing payment in USD has continued to be an unnecessarily difficult challenge. Let’s dive deeper into why that matters, the issues with the current solutions and how we at Elevate are addressing the problem.
Why should I get paid in USD?
According to a report by Statista, the USD accounts for approximately 88% of the total global currency trading volume . There’s no avoiding the fact that the USD is the standard when it comes to being the medium of exchange for global transactions, and freelancing transactions with employers aren’t any different.
One major reason why getting paid in USD is more important than ever is its prevalence on freelancing platforms. According to a survey by Upwork, up to 90% of the platform's transactions are made in USD . Other popular sites such as Fiverr, Freelancer.com, and PeoplePerHour also use USD as their primary payment currency. The other option of getting paid straight into your local currency is not worth thinking about, long processing times and extortionate exchange rates are the norm.
Then comes stability, in many emerging markets holding USD is as good as gold. The USD has become an important mechanism for individuals to safeguard their wealth against the debilitating effects of inflation. Those who held USD in times of crisis were able to protect their purchasing power and standard of living, while those who didn’t, unfortunately suffered miserably.
Challenges with USD accounts
Despite the benefits and demand, as most readers will know, setting yourself up for receiving USD payments has always been a pain. Historically, access to US banking services proved challenging for freelancers in emerging markets due to regulatory barriers and language limitations. It’s not much better today. Existing fintech solutions either explicitly have no interest in onboarding people from emerging markets, or offer substandard USD accounts (more likely wallets) that do not come close to the level of service and functionality that US residents get for free out of the box.
As always it’s the basics that count. Most solutions lack ACH support which is not a comfortable position for freelancers who have to align with the payment preferences of employers that rarely bend to an alternative. Add to that the lack of Federal Deposit Insurance Corporation (FDIC) insurance coverage which protects deposits of up to $250,000 meaning any hiccup in the financial system, or irresponsible practices can result in total loss of your hard earned money. And we’ve not even mentioned the extortionate transaction fees and exchange rates typically charged.
This is where we at Elevate come in…
FDIC-Insured USD accounts for remote workers
Elevate’s mission is simple. Giving you, the emerging market freelancer, the same level of USD banking service functionality given to US residents. That means:
An FDIC insured USD account with deposits held in the US with a licensed banking partner with over $6 billion in deposits.
Support to receive payments cheaply and quickly using the standard payment methods in the US (ACH and Wire).
A virtual debit card to spend online and in-store through Apple Pay and Google Pay.
The ability to send money back home at the most competitive exchange rates powered by our pay out partners.
Your feedback drives us forward! We'd love to learn about your USD payment journey - the successes, the challenges, and what Elevate can do to enhance it. Reach out to me on LinkedIn or send your questions to firstname.lastname@example.org, and let's make payments hassle-free together.
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