Probably, there won’t be any person among readers who’d never used freelance exchanges to find a good specialist to fulfill the task. Besides, people prefer going freelance or working remotely. It’s more convenient both for companies and for specialists. For example, in 2019 there were 53 mln freelancers in the US. In a year, this number grew up to 57 mln. The freelance economy is growing fast: the US topped the world in the growth of freelance income with $234 billion dollars earned by freelancers in 2020. Fast-growing freelance markets also include the UK, Brazil, the Philippines, Ukraine and others.
Companies and individuals prefer remote workers, outsourcers or freelancers, as it is more profitable and budget-saving. Plus, the price/quality balance delights the customers as the job done by a freelancer is sometimes much better and cheaper than the one a company does.
Fraud in freelance
The question is: how to choose the right freelancer (or the right customer, if you’re a freelancer), as the freelance industry is a “goldmine” for scammers. For instance, 44% of freelancers from Upwork reported that a customer has not paid them for the job. Meanwhile, 73% of customers claimed a freelancer took the pre-payment and disappeared.
The problem is the “Done-Paid” moment. Well, one of the solutions to this problem is an escrow-service. Many exchanges use their own escrow services or “safe transaction” methods. However, this has some drawbacks too:
– Fraud. Hackers use fake links. They send them to the customers for “payment”. In fact, the malefactors use phishing methods to get into the customer’s banking app and withdraw as much money as possible. Sometimes even the service itself may be fraudulent: a customer sends his money, then it disappears from the account.
– Fees. Some escrow services take fees: 5%, 10% or even 20% (like top freelance exchange Freelancer.com). Consequently, this raises the total cost of a job. Customers don’t like it. But others are ready to pay more for their financial security.
Smart-Contracts: another solution
Another solution to the “Done-paid” problem is smart-contracts. These are digital contracts and predetermined programs, automatically executed when all the conditions are met.
Example: A orders goods delivery from B. They set the conditions to perform the transaction in the program. A sends the money in the blockchain. В sends the goods. A gets the goods, and the money automatically goes to B.
People already use smart-contracts in the legal industry, real estate and intellectual property. That’s a convenient and secure method of working.
As for freelance exchanges, probably, the smart-contract system would satisfy both customers and freelancers as the money is secured in the blockchain system. The freelancer will automatically get it when the job is done and the requirements are met.
Wono is a freelance exchange that’s implementing a smart-contract system to provide better security for its users. Very soon, Wono will give you the solution everyone has been waiting for.
Conclusion: so, how to pay?
Slowly but surely, cryptocurrencies, blockchain and Fintech are becoming our everyday life. For instance, some banks use Ripple (XRP) cryptocurrency for the transactions to make them safer and faster. However, most people and companies still prefer “traditional” or “fiat” money. But for the sake of security, smart contracts and blockchain are a good option to settle the deal between freelancers and customers. Of course, the choice of payment method is always up to the end-user.
Are you a freelancer? Have you ever hired freelancers for a job? Have you ever come across fraud or scam in freelance? Feel free to comment, we’d love to hear your opinion.
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