COVID-19, along with rapid technological advancements, are two of the main reasons for the rise of digital nomads and freelancers in emerging markets. COVID-19 forced companies to close their physical offices and move online, while technological advancements made remote work possible.

In the last decade, freelancing platforms like Upwork, Fiverr, and Guru have created opportunities for people from emerging markets to apply for freelancing jobs in other countries. At the same time, digital software like Zoom, Google Docs, and Notion enables teams to collaborate seamlessly and securely as if they were in the exact location. This shift has created opportunities for people in emerging markets and contributed to the growth of digital nomadism and freelancing.

According to Investopedia, an emerging market is the economy of a developing nation that becomes more engaged with global markets as it grows. So, when discussing emerging markets, we typically refer to countries in Africa, Latin America, Asia, and Eastern Europe.

Although freelancing and digital nomadism flourish in emerging markets, receiving payments is still challenging for freelancers and digital nomads who live and work in these markets. Below, we list the challenges of accepting payments as a freelancer and digital nomad in emerging markets.

Limited access to international payment platforms:

Paypal, Stripe, and Venmo are famous for receiving payment from freelancers and digital nomads in global markets. Clients prefer to pay freelancers and digital nomads through these platforms. However, many of these payment platforms aren’t available in emerging markets, and they have limitations for freelancers and digital nomads residing in emerging markets.

These limitations create the need for more alternative payment platforms for freelancers and digital nomads living and working in emerging markets. As a result, many freelancers and digital nomads in these markets rely on costly and cumbersome payment methods.‍

High transaction fees:

High transactional fees have affected freelancers and digital nomads in emerging markets for years. Freelancers and digital nomads have subjected themselves to some costs, such as platform, conversion, and banking fees. Many platforms charge around 3-5% for each transaction performed by freelancers and digital nomads.

While developed countries may be able to cope with such costs,  emerging markets struggle. Also, freelancers who want to receive money in their currency are forced to convert it on the same platforms, which charge them high conversion rates with hidden fees.

Also, read the fees and charges on Grey.

Long processing times:

Freelancers in other regions enjoy instant payments between accounts, while freelancers and digital nomads in emerging markets face slow payment processing times. International wire transfers can take several days and weeks to reflect when sending money to freelancers and digital nomads living in emerging markets.

Furthermore, funds take days and weeks before they get cleared, and sometimes payments are delayed due to holidays, weekends and timezone differences. As many freelancers and digital nomads depend on quick payments to maintain their cash flow, paying bills and meeting life expenses can affect them socially, mentally and economically.

Also read: This is why your international transactions get delayed.

Regulatory and tax complications:

Tax laws governing freelancers and digital nomads must be more precise and better defined in many emerging market countries. Some countries restrict the foreign currency a resident should hold or transfer.

Due to poor policies on tax collected from foreign earnings, freelancers usually face double taxation. Such complications create uncertainty and additional costs for freelancers, making managing their earnings and maintaining financial compliance harder.

Most of the challenges listed above are due to centralised payment systems used mainly by digital nomads and freelancers in emerging markets. These challenges have existed for years, and some will continue for decades.

As challenges from centralised systems continue to affect freelancers and digital nomads in emerging markets, finding newer, more accessible methods of receiving foreign payments is necessary for freelancers living in those areas.

Enter cryptocurrency, an alternative to centralised payment systems which offer a decentralised system that is faster, more efficient, and cheaper to send and receive foreign funds across borders.

To receive cryptocurrency payment, you should have a crypto wallet offered by many crypto exchanges such as Binance, Yellowcard and CoinBase. Also, as many freelancing platforms don’t provide crypto payments, financial technology services like Grey can help you receive stablecoin payments from clients abroad and send them to your crypto wallet.

Crypto payments are a sustainable and long-term solution for payment challenges facing digital nomads and freelancers in emerging markets. Below are the reasons why freelancers and digital nomads living and working in emerging markets should use crypto payments

Fast and low-cost international payments:

Traditional methods of receiving money will take weeks or days for your hard-earned money to be cleared and reflected in your accounts. In contrast, crypto payments will take minutes — if not seconds — for the same payment to happen.

Crypto payments are a perfect solution for freelancers and digital nomads who rely on quick payments to maintain their cash flows, pay bills, and meet their living expenses. Also, regarding transaction fees, traditional means of payment charge more fees than crypto payments.

Also read: 6 standard banking fees and why you get charged.

Peer-to-peer transactions:

We all know the bank charges when sending money from one account to another, but the situation is quite different for crypto payments. With crypto and stablecoins, you can opt for peer-to-peer transactions, which sometimes cost zero fees.

Also, peer-to-peer transactions increase privacy and control over one’s finances as there’s no need to depend on traditional institutions, which can impose restrictions, hold funds, or even freeze accounts based on external factors.

Also read: Introducing Grey p2p a faster way to transact

Protection against inflation and currency volatility:

Due to different reasons, many countries in emerging markets risk currency devaluation and hyperinflation, which can affect the purchasing power of freelancers and digital nomads living and working there. Holding cryptocurrencies such as stablecoins like USDC and USDT and USDC, which have a 1:1 value as USD, will help hedge this risk.

Also, receiving payments through stablecoins will help freelancers and digital nomads living and working in emerging markets to preserve the value of their earnings and avoid financial instability caused by their local currencies.

Also read: Send USDC instantly payouts to 40+ countries with Grey

‍Crypto payments as a finance solution for unbanked and underbanked in emerging markets:

Access to banking services is limited and unreliable in many countries in emerging markets. Reports from the World Bank show that more than 1.7 billion people are unbanked globally, and many are in emerging markets.

Crypto payments allow the unbanked and underbanked to enjoy the fruits of the digital economy. To receive payments, they only need internet access and digital wallets.

Also read: Banking the unbanked with Grey x D local.

Crypto payment isn’t just a payment method but a tool that gives digital nomads and freelancers in emerging markets financial freedom to receive and spend money from their clients. Open your free foreign bank account now and start withdrawing your crypto payments.