It is probably safe to say that freelancing is becoming increasingly common in our modern society, enabling anyone to work from anywhere they please and boosting worker’s freedom. Many on-demand services would simply not exist if it was not for freelancers. Freelancing and on-demand services allow micromanagement of time and resources, which leads to tremendous savings. They allow us to get the job done when we need it, and focus our efforts on accomplishing exactly that.
For this reason, we can operate much more efficiently and achieve goals that seemed implausible before. With the emergence of blockchain technology, the services related to crypto freelancing such as web development and web content creation for web3 companies have boomed. This has created an interesting phenomenon as these web3 specialists are well acquainted with an alternate financial system i.e decentralized finance (DeFi), its benefits over the traditional banking systems and the suite of services provided by the crypto exchanges. Hence they prefer to receive cryptocurrency payments.
Following the changes brought forth by new technologies such as blockchain, fintech has now evolved to include and arguably even emphasize a new user-focused approach. The development of Bitcoin and thousands of other cryptocurrencies in a little over a decade has changed the definition of money as we know it — and spawned a parallel universe of alternative financial services, allowing crypto businesses to move into traditional banking territory.
The continuous growth of the crypto industry has led to banks integrating blockchain and cryptocurrencies in their core services and expanding their offer to include them. Fintech platforms like TAP are branching out into crypto banking for the Gig market, allowing entrepreneurs to work, pay and get paid with traditional and digital currencies. This emerging crypto banking system has highlighted the incumbent issues faced by web3 freelancers along with providing an effective alternative.
Inadequate state of the freelancer economy
The freelancing industry has widely been crippled by traditional banking and transaction systems, which include individuals who essentially do their own marketing, manage their contracts with the clients, and carry out the implementation – and only get paid for the latter part. And according to estimates, freelancers lose an average of $6,000 a year due to lack of payments. Moreover, the few freelancing platforms have monopolized in terms of work and payment contracts.
This is driving more and more freelancers, predominantly web3 freelancers to accept and ask for payments in cryptocurrency. These crypto friendly Gig workers are willing to put their money where their mouth is in terms of their faith in crypto’s longevity and success. Crypto payments make it easier and cheaper for international transactions in a worldwide gig economy while increasing transparency and fairness.
Crypto banks and fintech platforms like Tap have stepped forward to alleviate some of these issues as they offer lower cuts since there are no intermediaries. Also, the transaction costs are much lower than those of traditional banks, and they also provide faster payments speed in & out. Blockchain transactions are almost instant compared to classic bank transferts which can take up to days to reach your account, and, depending on where your payment is coming from or what day of the week it is. The benefits are particularly exacerbated as when dealing with remote work it is quite common to not reside in the same place as your employer.
Lack of cross-border, freelance-friendly banking services
In the traditional global financial system freelancers are getting the short end of the stick and the transaction fees on international payments gives us the picture. Some consider PayPal, Stripe & Square to be profiteering with the fees they charge.
But the majority of the revenue is generated in the cross-currency exchange markups which can be up to a staggering 5%. When we compare the same to transfer of Stablecoins for example, the fees are negligible and the consumer decides when to exchange the currency for the best exchange rate.
A Monopolized ecosystem
The freelance economy is set to grow 17% per year to $ 455 billion by 2023 according to a study by Mastercard. It encompasses all digital platforms that connect freelancers with clients to provide services and/or share assets. And this ecosystem has been dominated by a few centralised platforms that control the vast majority of the market.
The platforms tend to side mostly with the clients rather than the freelancers – because the clients are the ones who bring money to the platform. Furthermore, they charge fees as high as 20%, plus some extra for other “gigs” the freelancer purchases. There are also transaction costs added on top of that. This monopoly, along with the follies of a centralized operational and profit-sharing structure, has left the freelance community looking for a better and more transparent alternative to get their payments.
Lack of Payments
58% of freelancers have experienced not getting paid for completing a particular job. The payment contracts on freelancing sites are prone to fraud. Having to chase late payments and not having the safety net of a monthly salary are just two examples of the trickier side of life as a freelance professional. Sadly, another obstacle is slowly growing in the industry, in the form of freelance marketplace scams and the absence of a banking system that is impregnable and ensures that contracts are held at both ends.
What is Crypto banking?
The term crypto bank is somewhat subjective, as it can refer to several different services. First and foremost, there are no traditional financial institutions that allow you to deposit and store crypto assets. There are, however, digital-only challenger crypto banks like Tap that, in addition to personal accounts and prepaid cards, allows you to buy and sell cryptocurrencies.
At its most basic level, crypto banking may be defined as the management of digital money at a company that offers financial technology or financial services. Simply retaining a balance, making payments using a cryptocurrency debit card, and even earning passive income with one or more cryptocurrencies are all examples of these financial services.
How Cryptobanking can revolutionize the freelancer economy
Crypto lets you bypass existing banking infrastructure to accelerate payments and reduce costs. Banks and other payment services can take several working days, and fees and high exchange rates. With crypto banking, you get paid in minutes and don’t have to pay any hidden fees or exorbitant conversion fees.
They also now hold a share of that entire ecosystem, and in most cases, can become a core part of the community that decides the future of the ecosystem and are able to do cryptocurrency mining. They can also clearly see how In order to to avoid fraud web3 Freelancers can use smart contracts, a blockchain-based technology that enforces contracts without the need of a third party.
Better conversion rates with various cryptocurrency options
Crypto Banking allows web3 freelancers to save money on remittances, currency conversion fees, and heavy fees charged by freelancing platforms. Freelancers can receive payments in multiple cryptocurrencies with minimal exchange rates. Another advantage is the annual percentage yields (APYs) that are orders of magnitude larger than those given by regular bank accounts. Once you have the option to accept various digital assets, you also obtain the ability to customize your invoice options and decide how you want to proceed with your crypto earnings. For example, you can convert all collected cryptocurrencies to fiat, settle on other coins, or keep what you get.
Earning Higher APY in a low-yielding global market
Most web3 freelancers prefer payment in cryptocurrency because it’s a good investment if someone deposits their money in a bank, the minuscule amount of yield earned is nothing compared to higher rewards provided by crypto platforms. An annual percentage yield (APY) of 3% to 7% is normal for currencies like bitcoin and stablecoins with fintech companies like Tap.global giving up to 5% in APY on your stablecoins. The appeal of achieving outsized profits in a low-yielding global market is a great incentive for freelancers. And the most desirable element is that crypto banking eliminates fraud or discrepancies as both parties are bound by smart contracts that are impregnable and mutually effective.
Tap is providing tailored services for freelancers
Tap, a cryptocurrency fintech platform, provides an all-inclusive solution for freelancers that is built around traditional & digital currencies, enabling its consumers to get paid, pay, and generate revenues easily. Alongside the competitive fees, the platform offers dedicated account managers to assist with the onboarding process while all activities and portfolios can be managed from the app available for both Android and iPhone.
Tap currently provides all business holders and users access to over 15 crypto assets available for trading through the app, the opportunity to generate a passive income (of up 5% APY), and detailed statements about all transactions made to and from the account. The company also provides a premium service of crypto prepaid Mastercards and can be used at any MasterCard merchant in the world, or, for ATM withdrawal without withdrawal fee and minuscule crypto to fiat exchange fee.
Users can enjoy enhanced passive income prospects as well as fee savings on cryptos and foreign exchange to fulfill their needs & preferences. Tap’s users have access to three types of cards that vary in features, are tailored for the consumer’s choices, and provide a prime advantage to freelancers whose income is dependent on safe and effective transactions.
The platform has built an impressive reputation in the crypto and fintech space and is known for its smart engine technology which enables users to get the best prices for cryptocurrencies through scanning multiple exchanges and ordering books online. Alongside its cryptocurrency trading facilities, users are also provided with efficient and advanced security features, such as biometric login, and backend encryption along with cryptocurrency insurance covering up to USD 100,000,000 in funds.
Crypto banking lets web3 freelancers bypass existing banking infrastructure in an efficient manner to accelerate payments, reduce costs and earn rewards. Banks and other payment services can take several working days which is a great hindrance for remotely working freelancers. It is always useful for freelancers or digital nomads to have additional measures for getting paid, especially when it is so easy to set everything up. It is also an excellent opportunity to dip your feet into the crypto world.
In fact, you can start right away by creating an account on Tap and enjoy their premium services customized to your needs. Give it a go!