Smarter Payments

Deep Dive: How Studying Up On International Payments Helps Marketplaces Recruit Freelance Educators

Governments are debating how to safely teach students during the pandemic, and some parents have sought to ease educational disruptions and entertain children stuck at home by hiring remote private tutors from digital freelancer marketplaces. Online classes are also gaining the attention of workers who have been laid off during the economic downturn and want to refresh their skills or build new ones and attracting employees who may be seeking to polish their know-how while working from home. 

The global digital education sector was already burgeoning pre-pandemic, with 2019 projections estimating that it would experience a 14 percent CAGR from 2018 to 2022. The pandemic may add fuel to this expansion, too. University-, business-and government-focused digital education company Coursera raised $130 million in a fundraising round launched in May. 

Digital education platforms must provide satisfying cross-border payments experiences to win freelance teachers and students over to their sites, but this can be difficult to achieve. Marketplaces must often manage currency conversions and meet other localized payment preferences that vary by market. This month’s Deep Dive explores the transaction needs that eLearning platforms must address and lays out how they can partner with payments providers to overcome some of these frictions. 

Tackling The Currency Challenge 

It is imperative for eLearning marketplaces to deliver desirable payment experiences to instructors, especially as 73.7 percent of respondents in a 2018 cross-industry gig worker survey stated that they would abandon platforms if they experienced payout issues. Ninety-five percent of respondents demanded transparency into payments’ statuses and 96.6 percent said they wanted to be paid on time. Many freelance professionals also find it important to receive funds in their local currencies — 66.7 percent of those located outside the U.S. highlighted this need. This is a matter of speed as well as convenience: Workers who receive foreign currencies could be forced to wait up to two business days before banks can convert their funds and make them accessible. 

Consumers and companies purchasing classes are also likely to expect eLearning marketplaces to handle their payment conversion needs when paying online instructors. Even some businesses that regularly work with international freelancers issue funds solely in British pounds, euros or U.S. dollars, leaving gig work marketplaces to ensure that freelancers can receive payouts in alternate currencies. The platforms that can smoothly convert currencies are likely to recruit more freelancers and foster deeper loyalty with them, which in turn makes the platforms more compelling to potential hirers. Getting cross-border experiences right can also position eLearning platforms to better appeal to students and educators in more countries, strengthening marketplaces’ business and reputations. 

Swiftly handling currency conversions has always been important for eLearning platforms, but these capabilities are becoming critical during the current financial climate. Global markets are volatile, and hirers and freelance tutors are likely to value the transparency of having prices and payments listed in their domestic currencies. The widespread economic downturn is also causing more frequent shifts in FX rates, creating greater uncertainty over how much platform users will pay or receive. Marketplaces that take on this FX risk will put their customers at ease. 

Handling currency conversions is a legal requirement in some markets as well. Numerous countries — including China, Egypt, India, Russia and Venezuela — limit how much foreign money can enter their borders or prohibit their residents from using or holding foreign currencies. Platforms looking to recruit instructors and avoid violating regulations in these countries must have strong currency conversion capabilities and keep up to date on all local rules, and partnering with payment processing providers can help them shoulder these responsibilities. Global platforms like Fiverr rely on payment partners to handle transactions and ensure that disbursements comply with regulations. These partners specialize in managing complex international payments and staying current on global markets’ compliance intricacies, freeing up marketplaces to focus on other business aspects. 

Delivering On Digital Demands 

Freelance instructors also care about how funds are delivered. Thirty-eight percent of the world’s adult population is unbanked and therefore unable to receive wire payments, and these gig workers could struggle to cash checks in a cost-effective manner. The workers may instead prefer to have funds directed onto debit cards, into mobile wallets or into other accounts. These demands are not always met, however. A 2019 study found 70 percent of gig workers desired digital payments, but 31 percent were paid by paper check at some point. This means eLearning marketplaces that can better cater to instructors’ payment preferences stand to separate themselves from the pack. Some marketplace apps even seek to create more enticing payout offerings by incorporating gig work searching and financial management features, which allows them to offer freelancers tools to secure jobs and manage their cash flows. 

Other freelance marketplaces turn to payments processors that can underpin various payout offerings. Recently launched gig work platforms might first focus on providing several common payment options such as paper checks, PayPal and wire transfers but often have to expand on these methods once they scale up their freelancer bases to roughly 100 members or begin engaging in cross-border commerce. Managing greater payments volumes and meeting the needs of a wider user base requires more robust processing methods, and platforms could partner with card networks or other payment providers to deliver quick payouts. 

Digital marketplaces must also adjust to students’ preferred payment methods to offer them smooth, seamless transactions. Mobile money service M-Pesa is used by 24.5 million Kenyan consumers, for example, and companies catering to these shoppers’ online purchasing needs may thus wish to enable this option. Other digital marketplaces have been working to offer smooth shopping experiences to unbanked U.S consumers, and some efforts have entailed enabling shoppers to pay in person for online purchases. Pandemic-driven restrictions on physical interactions may force eLearning platforms to stay creative to continue reaching consumers around the globe. 

Students are eager to participate in engaging online classes, especially as in-person learning presents health risks, but they require convenient ways to pay for these offerings. Educators who are freelancing amid the current economic uncertainty meanwhile need quick, convenient payments to keep themselves financially stable. Freelance eLearning marketplaces that are ready to connect global talent with worldwide demand can see significant growth opportunities as long as they can provide transactions experiences that keep students and teachers satisfied. Digital education platforms must deliver quick, locally sensitive payouts and checkouts, and allying with payments partners could help them meet these needs. 

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NEW PYMNTS STUDY: ACCELERATING THE REAL-TIME PAYMENTS DEMAND CURVE – NOVEMBER 2020

About: Accelerating The Real-Time Payments Demand Curve:What Banks Need To Know About What Consumers Want And Need, PYMNTS  examines consumers’ understanding of real-time payments and the methods they use for different types of payments. The report explores consumers’ interest in real-time payments and their willingness to switch to financial institutions that offer such capabilities.

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