Independent contractors can no longer use the Zelle app, so should Bill.com and PayPal be the go-to?
WFFH: The pros and cons of using Zelle for business transactions
This post is part of a series entitled “Working Fluently From Home.” Click here for the archived posts.
During my time as a condo board president, it didn’t take long to realize that some payment methods for condo assessments were easier to manage than others. As a Toastmasters president (and former treasurer) during the same year, I could never quite get on board with the fees from PayPal Business. Although our public speaking group moved to a lower-priced venue, the officers were still wary of decreasing the biannual rate. For all we knew, the venue could increase their own monthly rates. But adding the 1.9% to 3.5% plus a fixed fee of $0.05 to $0.49 per PayPal transaction was a nuisance, and Zelle charged neither.
After one month, I asked our condo board to switch from PayPal Business to Zelle — and it worked swimmingly. No more extra fees. No need to add extra funds onto monthly condo assessments or eat the difference. Our business account was with one of the 2,200 financial institutions that was compatible with Zelle.
Recommended Read: “WFFH: Work Fluently From Home ~ A series geared toward entrepreneurs, solopreneurs, gig workers and startups”
So why didn’t I immediately return to Toastmasters with my master plan? I came across a new hiccup. One condo owner’s credit union account didn’t allow Zelle and another owner had an account with an older bank. Zelle was not an option for the latter bank either. Our condo board had to make a decision: Was it fair to leave these two out of using the electronic payment option when 90% of us could use Zelle?
We decided to move forward and still allow paper checks in a drop box for those who couldn’t use Zelle. I ditched the idea of talking to the Toastmasters board in case the financial institution was a problem with those members as well, specifically considering there was no guarantee that they’d renew after their six-month membership was complete.
ADVERTISEMENT ~ Amazon
As an Amazon affiliate, I earn a percentage from purchases with my referral links. I know some consumers are choosing to boycott Amazon for its DEI removal. However, after thinking about this thoroughly, I choose to continue promoting intriguing products from small businesses, women-owned businesses and (specifically) Black-owned businesses who still feature their items on Amazon. All five of my Substack publications now include a MINIMUM of one product sold by a Black-owned business. (I have visited the seller’s official site, not just the Amazon Black-owned logo, to verify this.) If you still choose to boycott, I 100% respect that decision.
The best digital payment platform as a freelancer
In my personal and professional life, I was an Upwork freelancer, a company that would use direct deposit to pay me. (Note: Although I have been on Upwork since 2014 and earned over $100K, I officially deleted my profile last month. Between them charging for Connects [points to apply for a job]; no clarity on why job postings could randomly be 10 Connects or 25 Connects; changing their commission rate from 10% to 5% for freelancers who made $10K or more; and now switching to 15% for inexplicable reasons, I threw in the towel. That decade was fun, but the greed was unbearable.)
Recommended Read: “Six Upwork clients to avoid ~ WFFH: Part 1 of 2: Troubleshooting problematic freelancing contracts”
But I still have four clients outside of Upwork, and I wanted to use Zelle. The problem? At least two of their financial institutions were not compatible. And even if we wanted to use the Zelle app instead, Zelle had already announced last fall that the mobile payment app would no longer allow people to send and receive money transfers after March 2025.
ADVERTISEMENT ~ Amazon
As an Amazon affiliate, I earn a percentage from each product purchased using my referral link.
3 lessons learned about electronic transactions and independent contractors
So I had to find alternatives to be paid for my work as a freelancer. And these are the three lessons I learned after waving goodbye to corporate life and working full-time as a freelancer — without Upwork.
Lesson 1: Banks do not consider some incoming payments as direct deposits.
Depending on your bank, there may be a minimum amount that you must receive via direct deposit in order to avoid paying the monthly service fee. This was a non-issue when collecting funds via Upwork. However, when two outside clients confirmed that their business accounts were incompatible with Zelle, I assumed PayPal Business was the same. When I received a bank statement, I was perplexed to see the monthly minimum fee.
Recommended Read: “Dog bloggers, sorry, your bully sticks aren't tax deductible ~ Navigating tax season and itemized lists for professional pet writers”
ADVERTISEMENT ~ Trust & Will
As an Impact Marketing partner, I earn a percentage from each product purchased using my referral link.
Zelle uses the Automated Clearing House (ACH) payment system to speed payments between U.S. bank accounts. PayPal Business also uses ACH. However, some banks (ex. JP Morgan Chase) do not classify PayPal transfers or Zelle payments as “direct deposits”; it classifies the payments as the equivalent of personal loans or friend loans. The only way around it was to find another payment method, but my clients were already comfortable on these two platforms.
So, what about newer clients? If your bank also has compatibility issues with using platforms like Zelle or PayPal Business, you may want to look into Bill.com, another ACH option. It has a user-friendly invoice system, and you can easily submit invoices via email. The downside? Bill.com is not free like Zelle. Wave, another app that has easy-to-use invoicing templates, also charges to receive funds.