vWorker - Payment Methods and Mechanisms
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Withdrawal Policies and Fees
On most sites, contractors initiate withdrawals by making a request that the company processes. vWorker is different: it uses a fixed schedule to send payments to workers twice a month when certain conditions are met. The system is clever and allows contractors to receive steady paychecks without having to make withdrawals, but it’s a bit complex and takes some getting used to.
Each contractor specifies a preferred payment method (see above), a payout minimum amount, and whether he or she wants payments sent at the end of the month, the middle of the month, or both. vWorker goes through all accounts twice a month and compares each contractor’s current balance against the payment minimum. If the balance exceeds the minimum, then a payment is automatically sent within 7 days. Contractors can also specify a holdback amount so that some funds are retained when a payment is sent. This may be desired if a contractor also acts as a client, or to keep funds available for the expert guarantee feature.
I think an example will be useful here. Suppose I set my payment method to Paypal, enable both mid-month and end-of-month payments, and set a minimum payout of $500 and a holdback of $75. On the 15th and last day of each month, vWorker will look at my current account balance. If it is less than $500, then no payment will be sent to me. As soon as it exceeds $500, a payment will automatically be generated for the full balance, minus my $75 holdback. So if on April 15 my balance is $450, nothing will be done. If on April 30 my balance is $560, then a payment will be sent for $485 ($560 minus $75).
Setting a low minimum payment means you get paid more regularly, but you pay withdrawal fees more often. Higher minimums mean less frequent payment, but lower fees.
In addition to being a bit complicated, this system has a couple of other drawbacks. If you need a payment outside this schedule, you’re out of luck: decide you need money on May 16th, and you won’t actually see any funds until about June 7th, over three weeks later. vWorker also locks the withdrawal settings for the 7-day periods when it is processing payments, from the 1st to the 7th and 15th to 22nd of every month, which is quite annoying. The user interface you must use to change these settings is also rather clunky.
vWorker’s withdrawal fees are, unfortunately, a bit hefty. The company charges $2 for PayPal withdrawals (compared to $1 or zero for most other sites); $5 for domestic checks and $10 for international (Guru charges $3 and Elance nothing); $5 or $10 for US or international Western Union; $5 for Payoneer on top of that company’s fee (most sites don’t have a cost for this); and a whopping $55 for a wire transfer. The option to send international checks by priority mail adds another $10.
I don’t think vWorker is trying to use withdrawals as a way to generate revenue per se. But they do seem to be trying to cover their accounting expenses more than most of their competitors do. I think they’d be better off, from a public relations standpoint, scaling these costs back and making them up in some other way.
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Last Site Update: May 18, 2011
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