PayPal is undoubtedly one of the largest payment systems in the world. Each client knows it, and most of the world’s freelance community would dream of getting paid through it. Nevertheless, reality is cruel for some and kind for others. In this article, I will discuss what PayPal is, explain how it works for a freelancer, highlight pros and cons, and major problems that Asian-based freelancers often encounter.
PayPal Description & How it Works
PayPal is essentially a payment system the client funds the money to your PayPal account, and you get them on yours. After that, you can spend the money on your card or withdraw it to your bank account, depending on your location and available services. The system supports multi-currency payments and invoicing, as well as single payments and shopping online.
Why Clients Love PayPal
In my personal experience, the main advantage of PayPal is its popularity and availability. Almost each client has an account or at least knows how to make the transfer. It is important, because the process of getting paid through PayPal is as simple as clicking a button. Therefore, many clients will ask you if they can pay you via PayPal; if you refuse them, you might lose a deal.
Pros of PayPal
‣Popular with clients
‣Quick and easy money transfer
‣Invoicing option
‣Increased trust level from clients
‣Availability in multiple currencies
PayPal Issues for Freelancers in Pakistan
Unfortunately, it seems that PayPal loves to complicate things for Asian based businesses and freelancers. First, PayPal was unavailable for some of the Asian countries although recently the situation has slightly improved. The main problem with PayPal and Asia region is that until recently this payment system did not support “receiving” accounts for specific countries such as Pakistan. This means that you cannot simply register and fund your account in Pakistan the same way as, for example, in the US or the UK. Unfortunately, there is no clear official information about which countries are supported by PayPal and which are not at a specific moment; therefore, it is critical to double-check the information on the PayPal website.
Warning: PayPal Account Usage in Asia is Illegal in Some Jurisdictions
Account Limitations and Freezing
Unfortunately, many Asian based accounts get limited or frozen by PayPal due to suspicious activity or violations. Although such situations are relatively rare, they still occur rather often to regular users. According to my experience one of the main reasons for account limiations is getting paid in large amounts. On the other hand, it may also be a consequence of incorrect data or other issues. In either case most of PayPal’s limitations and freezes can be resolved by contacting customer support and sending all required documents.
Paypal Payment on hold
One of the most common issues that PayPal users experience is payment holds. This problem usually occurs on newly registered accounts or those that have not been actively used for a long time. PayPal can freeze money for a short or even a long period depending on the situation. But don’t worry about that it usually take 2 to 3 weeks to release the payment. To avoid payment delays it is essential to maintain a valid account and provide all requested documents. It is also helpful to invoice clients to get paid faster and prevent such issues.
Charges and Exchange Rates
Unfortunately, one of the most common issues that freelancers who use PayPal experience is the amount of fees and exchange rates. Although they may seem rather expensive, you should also consider such factors as popularity and reliability. In addition, when it comes to international transactions, the exchange rates may also be a tricky issue. In most cases, they are usually higher than the market rates since PayPal’s official rates tend to include extra charges. Therefore, it is essential to study the current rates for fees and transfer to another currency. Be aware that they may vary depending on the country.
Should You Use PayPal as a Freelancer?
Whether you should use this popular payment system depends on you, your location, and your customers. If you are in an area where PayPal is available and reliable, and your clients are not afraid of extra fees, you can use it to get paid. I think it is a good idea to have this method among your multiple payment options. On the other hand, using it as your primary source of income is a somewhat risky and unreliable option. There are too many issues that may arise: account limits, freezes, extra fees, exchange rates, and more. A safer alternative would be to have several reliable methods of getting paid and switching between them in case one is unavailable. You can always use the official PayPal transfer option as a secondary method besides Payoneer and Wise, as I described in my article about the world’s best payment systems for freelancers.
Final Thoughts
To conclude, I want to say a few words about why PayPal is so popular. First of all it was one of the first payment systems in the world, and it has a lot of advantages in terms of popularity, reliability, and speed. On the other hand, PayPal has some security issues and several disadvantages, such as account limitations, freezes, extra fees, and extra exchange rates for international transfers. Therefore, using this method as a freelancer is a somewhat risky but rather viable option if you know how to use it properly.
