‘Digital Nomads’ Demand Speedy Cross-Border Payments

While COVID expanded remote work, fast global payments made the digital nomad lifestyle possible.

At a time when headlines are filled with layoff announcements, including among the once-hot tech companies in Silicon Valley, the appetite for alternative working arrangements has never been stronger.

As GoLance CEO Michael Brooks, Papaya Global CEO Eynat Guez and Nium CRO Frederick Crosby told PYMNTS, cross-border, or international, hiring remains robust, and even if the idea of working from anywhere is still a bit romanticized, the truth is that managing a far-flung workforce is complicated.

“It’s very hard to manage in reality,” Guez said, especially as many companies have been grappling with inflation, rising wages and cost cutting.

As for those layoffs, across any number of hardware, software and service firms, the first people to be downsized are the people who are not part of the organization’s core teams.

And as these companies restructure, they are also questioning whether they need to have workers in costly locations, such as the Bay Area, or whether they can outsource those jobs to cheaper places.

“It’s not just a matter of ‘let’s remove the global workforce,’” she said, “It’s about ‘let’s be wiser and more efficient in the ways in which we work as an organization.’”

Brooks said that beyond the headlines where employees are being fired from many of the marquee names in Big Tech, drilling down a bit into other areas in the industry, he said, “and we haven’t really seen things slow down.”

There’s been a slight slowdown in the pace of raises for high end-tech talent. Wages paid to lesser-skilled workers have also ridden a wave of inflation, he said, where, in developing nations, data entry employees in the Philippines, for example, have seen compensation increase from around $3.50 an hour to today’s $5.50.

“It’s been manageable and an adjustment that’s been overdue,” he said.

Digital Nomads

GoLance’s Brooks said the digital nomad lifestyle is real. Many countries are competing for human capital, and are easing citizenship programs. In a burst of creativity, countries such as Bangladesh will pay 4% back to the to GoLance freelancers for all the money that flows into their country.

At a high level, said Guez, countries with relatively lower cost of living and higher pools of tech talent are attracting “digital moments” as companies based in the States and elsewhere are finding workers in Argentina, Mexico and Brazil, Greece and Thailand.

As Guez stated, “We tend to  forget that companies used to be global pre-COVID — and they will remain global post-COVID.”

Payments, of course, keep it all humming as companies build global workforces.

Nium’s Crosby echoed that, saying business is strong for the company’s payments platform. “We get these questions all the time: How has the recession hit you? What’s going on with the volumes?’ Nothing’s changed.” He noted that Nium’s momentum is buoyed by the fact that the company  supports a number of different business payments and services, and strength has been especially pronounced in the payroll and freelancer markets.

“There’s still the pressing need when it comes to paying for these folks’ services,” he said.

Paying these digital nomads can be a complex undertaking, as many countries’ currencies are highly regulated. Platforms — including Nium and Papaya Global — can ensure that compliance and regulations are followed, and taxes paid, as necessary as freelancers and employees earn their wages.

As Guez said, “On the payment side we constantly see more and more regulation on anti money laundering  and global transactions that are being monitored and so on. And payroll is a very local transaction, but it’s also a timely transactions [for employers]. I need to pay you correctly, I need to pay you exactly on time.”

Speed Is Critical

Increasingly, speed of payments is critical, said Brooks, who noted that Uber has set some expectations in the global workforce. Drivers get paid as soon as the ride is completed.

“Speed of the payments can be even more important than how much workers get paid,” said Brooks.  That means breaking free of the traditional biweekly or weekly pay periods, he said — and faster payments will wind up attracting talent no matter the vertical.

In just a few decades, the traditional payroll period will be dead, said the panelists.

“It’ll be just about what you’ve earned and what you can cash out,” said Crosby. It’ll take some time to get there, said Guez, who added that governments will have to get on board with that idea when it comes to paying employees, as collecting taxes, perhaps on a daily (or even more frequent) basis will  require an upgrade and overhaul of existing technologies.

The precedent is there for enterprises, however said Crosby. Cross-border payments used to take days to settle. But the private market has shown it can catch up to the digital age: Nium has the ability to connect more than 100 corridors and settle payments in a matter of minutes.

“Twenty years ago people would say this would be impossible, that it cannot be done. But it can be done,” he said.

Faster international payments will also offer a wealth of new opportunities for employers to cement long-standing relationships with employees. With the wealth of data on hand, and digital channels in the mix, employers can also extend loans to their workers in a form of embedded finance, said Guez, collateralized by future payments or severance packages.

“This is really the future of FinTech and payroll,” she said, “as workers can utilize the funds they need now for a range of purposes.”

Looking ahead Brooks, we’ll see the emergence of decentralized work environments where employees that collaborate can work together once or twice a week at their leisure — and then depart for their favorite spots.

“Culture will be important,” said Guez, “not just about hiring people around the globe, but about finding the places that make sense for you.”