How freelancers can avoid losing 7% of income from global clients

Freelancers can lose 2.5-4% per payment through bank transfers, and up to 5-7% when using PayPal or Stripe

- Shipra Singh

How to receive payments from global clients without losing a significant portion to conversion and transfer charges remains a constant dilemma for freelance tech writer Tushar Mehta.

Mehta prefers online money platforms like PayPal, Wise and Payoneer for their convenience and better conversion rates. “But it’s hard to get all clients to use them. Some larger organizations have internal policies or banking tie-ups, so they insist on direct bank-to-bank transfers.”

In such cases, he ends up losing roughly 2% on the actual exchange rate. Add a 0.18% goods and services tax (GST) on the foreign currency conversion, and even modest payments can lose meaningful value before they reach his account.

The freelancer economy exploded in recent years, with professionals servicing clients overseas. But while remote working removes the need to cross borders, payments are still subject to country-specific policies.

For every dollar a client sends, multiple entities—banks, intermediaries and payment processors—claim their cuts for facilitating the transfer. The difference between the mid-market rate—the real exchange rate between two currencies—and what a freelancer receives is where most of this leakage hides.

Freelancers can receive money in three ways: direct bank transfers via SWIFT (Society for Worldwide Interbank Financial Telecommunication) online platforms such as Wise, Skydo, Payoneer, Salt, Winvesta or PayPal, and export earners’ foreign currency (EEFC) accounts. Each option has its own costs, speed and convenience.

Bank transfers