In our increasingly global economy, most of us have colleagues in another country. With the rise of the gig economy and social networks, it has never been easier to discover outside talent. For example, software development, once concentrated in distinct regions of the world, is now booming everywhere. With the rise of boot camps, MOOCs, and other online programs, people are learning to be competitive in this global marketplace.
Unfortunately, paying this newfound talent is still as costly and difficult as it was 30 years ago. Based on World Bank data as of December 2015, the average global cost of sending remittances was 7.37%. Let’s look at the costs for sending payment through traditional and newer channels:
- Commercial banks charge over 11%
- Money transfer company can charge 10% or more
- Post Offices charge over 5%
- PayPal charges over 3.9% for international transactions, 2.9% for domestic
- Upwork charges a 2.75% fee for every payment made
In addition to the high costs, these payments can take weeks to process. International wire transfers are arguably the worst option, taking about 15 days to complete.
Sending money to developing countries is a nightmare to say the very least. Although there are the big gorillas…
