Cross-Border Payments for the Modern Startup
Five Solutions for Global payments
Building distributed teams brings particular challenges, most notably: how to move money across borders efficiently. Over time, I've settled into a pattern of working with freelance and contractor agreements with monthly payment cycles. This structure tends to maximize what team members actually receive, which matters when you're working with talent across Europe and Latin America.
There are certainly other models - employer of record services such as Deel exist for companies or staff that prefer the W2 employee structure globally but quite frankly, the percentage needed to pay for the associated costs does drastically reduce the person’s take home pay. For our current size & purposes, direct payment to contractors has proven most practical. Here's what works:
1. WISE
The most cost-effective solution I've found for international payments. Very easy to use, it takes mere seconds to run payroll and so far, it has the best conversion and lowest fees in the market.
Wise is not available in all countries. In our case Mexico is the notable exception - traditional bank wires move faster there, with only the sender's international wire fee (~$40)to consider.
2. PAYPAL
More expensive than Wise, but universally familiar. The ease of use matters, particularly when onboarding new team members. There can be some friction with initial payments for those new to the platform during the first couple of cycles - worth having an alternative ready.
3. STRIPE
Excellent for US-based contractors. Results vary for European vendors - I've encountered issues with European credit card acceptance, and successful international transactions via their invoicing feature can carry fees & exchange rate loss approaching 8% of the total. They have now rolled out crypto payments with USDC which may prove very useful if it lowers fees.
4. BANK WIRE with traditional Bank
Reliable for US talent and surprisingly with Mexico. For European payments, the timeline extends and exchange rates through traditional banking are less favorable than dedicated services like Wise.
5. DEEL
Freelancers
For larger teams or those prioritizing automation and compliance infrastructure, platforms like Deel offer contractor payment management at $49/contractor/month. Rather than manually tracking invoices and payment schedules each month, Deel creates a system where contractors submit their work, invoices generate automatically, and payments process on schedule without anyone having to remember dates or send reminders. The platform also maintains a clean record of all contracts and generates the tax forms you'll need at year-end, which becomes increasingly valuable as your contractor count grows.
Global Employees
Deel also provides the option to convert freelancers to full employees without establishing entities in each country—their Employer of Record service handles local employment, benefits, and tax withholding. This structure has its adherents, particularly for companies prioritizing formal employment relationships. The trade-off is cost: Employer of Record fees can significantly reduce what team members take home compared to contractor arrangements where they manage their own tax situations. For many freelancers working with startups, the latter remains preferable.
The infrastructure for borderless work exists—it's simply a matter of choosing the pieces that serve your particular constellation of needs. Start simple, add complexity only when it earns its place, and remember that the best system is the one that disappears into the background, leaving you free to focus on the work itself.
