Here’s a comprehensive guide to help you understand the pros and cons of various services operating in Pakistan
You must have heard people complain about the obstacles they face in getting international payments transferred to Pakistan. Courtesy of the boom in remote jobs due to the coronavirus pandemic, the problem has accelerated, and solutions are lagging behind.
Ever since the pandemic forced people to stay indoors and reduced the need for in-office work, companies across the globe are looking into an untapped territory: a remote workforce. While the pay gap varies from country to country, it is still enough to warrant dedication from people living in developing countries where the exchange rate translates to above-average income.
While any developing country struggling with a balance of payment situation would have rejoiced at the prospect of getting an influx of foreign exchange, Pakistan stands out as the odd one out. Not only do premier payment companies not operate in the country, but the government is yet to introduce a fintech solution to the woes of this remote workforce.
Why PayPal matters?
PayPal is the world’s most popular online payment service, but the company does not operate in Pakistan, which automatically excludes the country’s remote workforce from garnering the same benefits their contemporaries in the neighboring India do. Given that clients and employers tend to frequently use PayPal Credit to pay off service providers, Pakistani workers miss out on business opportunities just because of the company’s lack of operations in Pakistan.
A way around this is Xoom. This PayPal service allows people to send money to Pakistan efficiently. Pakistanis, however, barely get a good exchange rate through this service. Furthermore, Xoom does not allow people to generate invoices, an ability crucial to freelancing in the modern world.
What are the alternatives?
While wire transfer is a good conventional alternative, it is not the fastest. People can avail various benefits through this method, including tax concessions on software exports after registering themselves with Pakistan Export Board. This method comes with its variable fee.
Express Withdrawal used to be a good alternative and it was faster than others. It did not have any transaction fee, but sadly, it no longer works in Pakistan.
Another option, Payoneer, works well with PayPal and various international banks. There are some third-party services which can allow clients or employers to send money through Payoneer without signing up on the platform, but having an account is always preferable. Payoneer is quite similar to PayPal and supports United States Dollar, Canadian Dollar, Euro, Great Britain Pound and allows you to withdraw your funds in local currency. The exchange rate varies with this service as well.
Ria Money Transfer appears to be the best alternative as it gives the best exchange rate in Pakistan and allows smooth and quick transactions. The only problem is that it does not allow you to cite software exports as the purpose of payment.
What about low-scale freelancers?
Freelancers in Pakistan who earn less than their employed contemporaries can use microfinance banking services such as SimSim, EasyPay, SadaPay, etc. These services do not usually allow transactions exceeding Rs50,000, but in some cases, the account capacity can be enhanced with biometric verification.
These options are handy for small-scale freelancers and come with a certain limitation. SadaPay, for instance, does not deduct a transaction fee and gives a good exchange rate, but it does not allow large transactions.
2Checkout is also an option. Service providers can send their clients links generated through the service through which they get paid. The service charges a 6 percent commission on transactions, and while Pakistan does not charge a FXM markup, it is applicable in other countries.
What should freelancers do?
Freelancers must have accounts in banks that allow them to generate invoices. Standard Chartered and Faysal Bank are two great examples here. In case a person does not have an account at the supporting banks, transactions can be delayed by up to 30 days.
Other than that, freelancers must check out services supported by their respective platforms. Upwork supports a number of options, but it automatically releases your money after a specific period. Fiverr, however, does not release payments automatically, and people can choose to send it to their local accounts as soon as get see a favorable exchange rate.
