If you’re interested in the gig economy, how freelancers receive payments in Nigeria is already on your mind.
The reason you’re bothered is understandable. Any client will buck at the prospect of paying 7.9% in transaction fees for sending $200.
Simply put, transaction fees are a bummer!
What’s worse?
Third-party apps like Payoneer and PayPal don’t make it easier. Their high withdrawal fees, lengthy documentation, and murky account policies will drive you nuts.
Don’t believe me? Check out these complaints on Quora about Payoneer’s account closing rules.
Complaints about Payoneer on Quora
So, what options do freelancers have to receive payments from clients? You have cryptocurrency, the digital currency you can’t hold but can spend without local or cross-border interference.
But before you switch to cryptocurrency, you must beef up your knowledge about cryptocurrency platforms. I’ll explain them in this piece. Walk with me.
Freelancer payments: 3 factors to consider before choosing a crypto platform for remittance
Many differences exist between traditional banking and cryptocurrency, and we covered some of them here. As a freelancer in Nigeria, consider the tips below before choosing a platform for crypto payments.
1. Access to multiple digital assets
Imagine a scenario where your client wants to pay you in a stablecoin like USDT, but your preferred crypto platform doesn’t support stablecoins. It means you’ll likely lose the client or the payment. That’s why you should thoroughly check the digital asset catalogue available for transactions before using a crypto company for international remittance.
Crane, for example, lets you receive money through popular virtual currencies, including Bitcoin (BTC), Ethereum (ETH), Tether (USDT), USD Coin (USDC), and Dogecoin (DOGE).
2. Security is key
Using a financial platform without adequate security is like leaving your house unlocked—it makes you vulnerable to thieves. The same applies to cryptocurrency platforms. While the blockchain uses advanced security systems (cryptography) for optimal protection, not every crypto platform is security conscious; therefore, theft and fraud are plausible with crypto-backed channels.
Think of it like this: The Nigeria Inter-Bank Settlement System (NIBSS)—which facilitates inter-bank transactions in Nigeria—may have high security, but the banks you interact with may have lax security. Basic security measures you should look out for include:
I. Payment Card Industry Data Security Standard (PCI DSS)
It protects card data. The standard is mandatory for any business (including crypto platforms) that collects, stores, and transmits card data. Ensure any crypto organisation or partners are PCI DSS compliant if they fall into the purview.
II. Multi-factor authentication (MFA)
It presents unauthorised access to accounts. Besides username and password, MFA requires another verification method such as biometrics (e.g., fingerprints), tokens, and one-time-passwords (OTPs) before granting access.
On Crane, for example, you can protect access to your account with fingerprints and OTPs, besides your password. How effective is MFA for security? In 2019, Google discovered that adding a recovery phone number as MFA blocks up to 100% of automated bots, 99% of bulk phishing attacks, and 66% of targeted attacks.
III. Know Your Customer (KYC) policies
The Central Bank of Nigeria (CBN) mandates financial operators in Nigeria to verify customers’ identities to prevent fraud. You should be wary if any potential financial organisation you want to do business with has poor KYC.
3. Choose a platform that fits your needs
No two crypto organisations are the same. Some of them help you buy and sell virtual currencies. Others, like Crane, help you receive money from anyone (including clients and business partners) as a freelancer. The crypto-powered organisation also lets you convert crypto to your local currency.
Besides security, ensure any potential crypto platform you want to use for cross-border payments provides the following benefits:
- easy-to-use functionalities
- defined pathway for converting crypto to local currencies
- swift processing time
Freelancer payments: The risks of cryptocurrency as a payment method
Forget everything you’ve heard; using crypto for payments isn’t a bed of roses. It comes with risks. Here are some risks you should know before using crypto for payments.
1. Price volatility
Crypto prices and volatility are inseparable pairs. This is why we have the “bull run” and the “bear season” that explain crypto price volatility. Digital asset prices are high and significantly valuable during the bull period. In contrast, virtual assets are cheap and have a reduced value during the bear season.
2. Regulatory uncertainty
Yes, more individuals, corporations, and governments are adopting virtual currencies. A case in point is that crypto transactions grew at least 1.3% year-on-year in six countries, including Nigeria, between June 2022 and July 2023.
Despite the increasing popularity of crypto, government institutions still have varying concerns about the blockchain. For instance, in February 2021, the CBN banned the use of cryptocurrency for payments (it reversed the sanction in December 2023). Similarly, cryptocurrency is illegal in Qatar, Saudi Arabia, and China.
The regulatory uncertainty suggests you need to double-check relevant laws guiding blockchain use in your location or business of interest before adopting it as a payment option. Nigeria, for example, released the National Blockchain Policy in May 2023 that guides digital assets’ adoption, governance, compliance, security, and interoperability.
3. Transaction irreversibility
Unlike banks or traditional financial systems, crypto transactions are largely irreversible, especially with BTC deals. The blockchain processes digital transactions on a distributed network of computers without a central authority. Once a miner (the designated entity that “confirms” transactions on the blockchain) authenticates a transaction, it’s irreversible.
The irreversible principle of the blockchain is another reason you must vet the crypto platform you use for sending or receiving payments—it reduces your chances of wrongful transfers to scammers. Should any wrong transaction occur, the platform will guide the retrieval process.
How freelancers receive payments in Nigeria using crypto
Crane is a crypto-powered financial organisation for receiving payments in local currencies. It works like this: your client pays in crypto and Crane lets you convert it to naira in minutes. Easy peasy.
Here’s a guide to using Crane to receive payments in crypto from international clients:
1. Log in to the Crane app as an existing user. If you don’t have an account with us, download the app from the Google Play Store or App Store. Then follow these steps to create an account.
2. After you sign in, select the Receive option.
3. Select the digital asset for payment collection. You can receive payments with the following virtual currencies on Crane: Bitcoin, Ethereum, Tether, Tron, Binance USD, and DOGE
4. Copy the wallet address and share it with your sender. For this example, we selected BTC.
5. Expect your credit notification in minutes. However, if you’re experiencing unusual delays, follow this guide to rectify the issue, or contact us via [email protected].
After receiving payments in crypto on Crane, convert it to naira with these steps:
1. After signing into the Crane app, click Convert on the home screen.
2. Select the cryptocurrency (aka digital asset) you want to withdraw. We selected BTC for this tutorial.
3. Input the digital asset value (BTC in this case) you want to convert. You can specify the value you want to convert in BTC or USD. You’ll see the naira equivalent of the value automatically. Click Continue.
4. You’ll see the preview page that shows the dollar value (we use the current exchange rate on the foreign exchange market) and the naira equivalent of the digital currency (BTC in this case) you want to convert. You’ll also see Crane’s charges that apply to the transaction for optimum transparency.
5. After clicking “confirm,” add your private 4-digit transaction pin on the preview page. You’ll receive a confirmation message instantly.
The crypto you convert to fiat stays in your naira wallet, which you can withdraw to your bank account using the steps below:
Go to Wallet on the Crane app
Click ₦ Naira.
Tap the Withdraw button.
Fill in the beneficiary details (the bank, account number, and the amount you want to withdraw). Click Withdraw after completing the necessary information. You’ll receive the cash in your bank account in minutes.
Freelancer payments: 3 benefits of using Crane to receive payments from international clients
I. Transparent transaction fees: Our transaction fees are transparent and affordable. You’ll not be charged for inward payments. However, it costs 2% of the transaction fee to convert the crypto in your Crane wallet to naira.
II. Access to global clients: High processing fees, unending documentation, and complicated withdrawal rules are challenges restricting freelancers’ collaboration with international clients.
However, Crane’s blockchain-powered borderless system simplifies remittance, making it easy to receive payment from anywhere and anyone. The result? You’re likely to increase your income because you can offer your services to more clients globally.
III. Swift payment collection: Using traditional banks to receive money is painfully slow. It takes at least three to five business days on average, which may take longer depending on the region you’re receiving money from. The opposite applies to Crane’s blockchain-reliant remittance system, where your payments will be settled within minutes.
FAQs about how freelancers receive payments in Nigeria
1. How do freelancers in Nigeria get paid on Upwork?
Upwork offers the following payment options for freelancers in Nigeria:
I. Direct to Local Bank: It’s for freelancers outside the US, including Nigeria. This method may take up to seven business days to withdraw money. Freelancers in Nigeria have a $3,000 limit.
It costs $0.99 (plus incoming fees at some banks) per direct withdrawal to your local bank. Watch the video below to learn how to link Upwork to your local bank in Nigeria.
II. Wire Transfer: It’s for freelancers outside the US. Upwork charges $30 for each dollar wire transfer, although the rates may vary based on the foreign exchange markets and other bank charges.
III. Third-party apps: Upwork lets freelancers in Nigeria use third-party apps like Payoneer to collect payments from clients. Transfers from Upwork to Payoneer take 48 hours or longer, depending on Payoneer’s recent policies. Besides, Upwork charges a “small per-transaction fee,” while Payoneer charges activation, monthly maintenance, transfer, and ATM usage fees.
2. Can I use Upwork from Nigeria?
Yes, freelancers in Nigeria can use Upwork to connect with clients and get paid.
