For freelance workers, nothing is more important than getting paid in a timely and efficient manner for a project that could take days or even months to complete.

Users of Guru.com, an online marketplace for freelancers, demanded the company follow the lead of its competitors and offer a prepaid debit card as an option for payment. Guru heeded this advice and turned to Payoneer Inc., a New York-based prepaid card program manager that specializes in working with companies such as Guru to launch the Guru.com PrePaid MasterCard in March.

The online marketplace for freelancers presents yet another niche for prepaid cards and one Payoneer believes has been underserved. "The need [for this type of service] is immense," Payoneer CEO Yuval Tal tells ATM&Debit News. "Delivering payments to [freelancers, especially internationally] has never been properly established."
Guru markets the card on its Web site toward non-U.S. freelancers, says Bethany Fricker, acting head of marketing at Guru. Adding the card as a payment option is "consistent with our approach to customer service in a lot of ways," she says.

Payoneer also provides prepaid cards for similar companies including iStockphoto, which claims to be the "Internet's original member-generated image and design community," and 2Checkout.com, an authorized reseller for online retailers. Tal estimates about 2,000 companies specialize in connecting companies to freelancers.
Storm Lake, Iowa-based MetaBank issues the cards, and i2c Inc. processes the transactions.

Guru uses a two-step process to facilitate payment between companies and freelancers. The company's Web site features a payment gateway called SafePay to streamline the payment process between freelancers and employers, according to Guru.

"SafePay essentially acts as a neutral, protected third party in the payment process," Guru spokesperson Kristen Sabol writes in an e-mail message to ATM&Debit News. Employers pay Guru, which then distributes the funds to freelancers for the primary benefit of keeping account information private, she adds. SafePay also provides regular invoicing or escrow services.

Freelancers can then access funds from the account using by prepaid card, check, PayPal, wire transfer or funds transfer another account.

"We had thought about [adding a prepaid card] a long time ago, but we didn't take up the option because we have other options to get paid already in place," Stacy Norman, Guru manager of user support and operations, tells ATM&Debit News.
Direct deposit is the most-popular option, but most freelancers outside the United States prefer checks and wire transfers to receive payment, Norman says.
Guru and freelancers eventually found problems with both of those methods.
In some instances, checks were stolen en route to the freelancers. Wire transfers presented both financial and technical problems. Fees associated with wire transfers cut into a freelancer's bottom line, Fricker says.

Initiating a wire transfer costs between $10 and $25 per transfer, estimates Talia Mendeson, Payoneer vice president of business development at Payoneer. That amount does not include fees the receiving bank that may apply by the receiving bank (freelancer's bank account) to accept the transfer. Those fees will vary depending on the country, bank policy, bank account type and other factors, Mendeson says.

 "We've heard stories of banks charging as much as $35 just to get the money in addition to regular wire-transfer fees," Norman says.

Guru often deals with scenarios in which wire transfers get "stuck" at a bank because of missing information or some other technical issue, Norman says. "There have been a couple of cases where we're following up for over a month trying to get a payment through to a freelancer," she says.

Tal has heard similar horror stories. In Africa, where Tal says Payoneer has some cards, freelancers were robbed after cashing checks.

As of June 15, 350 Guru users had the prepaid card and had loaded $275,000 into their card accounts, according to Norman. Guru sends Payoneer payment files every Monday, Wednesday and Friday. If a freelancer requests funds from his SafePay account on Tuesday, funds will be loaded into the prepaid card account by Wednesday afternoon, she says.

Payoneer's card fees vary inside and outside the United States. U.S. cardholders pay a $5 activation fee and $1.35 per ATM withdrawal. Outside the U.S., users pay a $10 activation fee, up to 3% of the sale for a purchase and $2.15 plus up to 3% of the withdrawal amount for an ATM transaction. Payoneer says the percentages are based on foreign-exchange rates at the time of the transactions.

Other fees include $1.50 for a standard payment load from Guru.com and $4 if the cardholder wants access to the funds within two hours. Monthly card-account maintenance costs $1 for two or more transactions per month, or $3 per month for less than two transactions.

The adoption rates for the cards are high across all Payoneer client companies, Tal claims. Though Tal would not reveal specific information, he says Payoneer has cards in 50 countries, and more than 50% are in the United States.
Possessing a prepaid card means different things for freelancers worldwide, Tal says.

In the United States, most freelancers who take on projects as a side job or as a hobby use the prepaid card as a type of savings mechanism, Tal says. Most freelancers in the international market use the card for everyday purposes, he adds.
"It's a status symbol to have a card [in some foreign counties]," Tal says. "You get a very high adoption rate for this because in many cases it's the first card they've ever had." ATM

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