How to Free Up Time and Resources

Unbeknownst to many of us, freelancing has been around almost as long as time itself. According to Mariam-Webster, the earliest written evidence for 'freelance' comes from Sir Walter Scott's Ivanhoe, in which a lord refers to his paid army of 'free lances'. When freelance first came into English in the early 1800s, it was used to refer to a medieval mercenary who would fight for whichever nation or person paid them the most. Our understanding of what freelancing is today is, of course, vastly different. Over 80% of employees want location flexibility, according to a Future Forum study, and 93% want schedule flexibility. As more employees take on side-gigs, they see themselves as ‘solopreneurs’ renting their time to their employer client. Performance, not loyalty, is at the heart of a new employment contract. This is leading to big changes.

A desire for more flexibility, the ability to choose projects that align with their interest and the ability to set their own rates which can often lead to higher earning potential compared to traditional employment means that in 2024 freelance work is more popular than it has ever been. And innovators are taking notice: The global market for Freelance Platforms is projected to reach US$13.8 Billion by 2030 according to Yahoo! Finance, growing at a CAGR of 16.2% from 2023 to 2030. This has led to more individuals than ever choosing to freelance or pursue other forms of self-employment instead of pursuing a traditional employment path. And more and more organisations than ever are adapting to the need for an agile workforce that depends on freelancers.

The Importance of a Platform Payments Strategy

Freelance platforms primarily generate revenue through monetisation strategies that capitalise on the interactions between freelancers and clients. The majority of freelance platforms charge a commission on payments made to freelancers upon successful project completion (typically a percentage of the total payment and serves as the primary revenue stream for many platforms). Many platforms also offer subscription-based membership plans for freelancers, which provide benefits such as enhanced visibility, additional bidding opportunities, and access to a variety of premium features. Some also charge fees for listing projects or services, while others also offer featured listings as advertising. The TLDR: freelance platforms are employing diverse revenue streams to create a sustainable model that benefits both freelancers and employers.

Freelance platforms are constantly evolving - and the ways in which they monetise along with it. As businesses move toward providing their customers with more personalised, frictionless experiences, embedded payments have become a core value proposition. As such, embedded payments are becoming very common for all B2B2C and B2B2B business models like platforms and marketplaces, and PayTechs are set to play a major role in driving adoption rates. But this gives rise to another question: As a platform or marketplace pulling these levers to provide a seamless payments experience for their customers, how can they turn this into an attractive revenue stream? Enter platform payments strategy.

Components of a Robust Payments Strategy

What is a Payments Strategy? A payment strategy - according to Noda - is a defined plan for businesses to manage and facilitate electronic transactions in a way that is super efficient. Building the strategy typically incorporates choosing appropriate payment platforms and integrating specific technologies too. The objective of an efficient digital payment strategy is to enhance customer experience, increase transaction speed, and strengthen security.

In recent years, there’s been an increase in API-based fintech solutions (like Stripe) that allow platforms to not only offer a variety of payment functionalities (like online card acceptance, BNPL, etc.) to their growing customer base, but it also enables them to capture a portion of these economics (e.g. through margins). Stripe reports that many platforms have created new revenue streams and increased the lifetime value of their customers by monetising payments and financial services. For example, after partnering with Stripe to launch a payments platform for small and medium-sized businesses, Stripe reports that [their customer] Weave’s payments customers have grown 13% month over month and its processing volume has grown at an average of 37% month over month. Beyond this, platforms who have also launched payments businesses have benefited from differentiation from competitors and significant increases in customer retention.

Ensuring Compliance and Security

With the acceleration of digital adoption, cybercrime is on the rise. Cybercrime, including phishing, pharming, whaling, chargeback fraud, card testing, and identity theft, now poses a significant threat to organisations globally. As such, security is of paramount importance and forms a crucial part of any payment strategy. Essential tools for merchants involve encryption, tokenisation, multi-factor authentication (MFA), biometric scans, anti-fraud monitoring, and routine audits. Compliance with PSD2 and PCI DSS standards is also crucial for compliance and safety. The bottom line: do not skimp on compliance and security - it’s worth its weight in gold. For a more in-depth guide on the importance of payment security, here’s a very handy resource from Stripe.

Placing The Customer at The Heart of Every Decision

Platforms are unique in that they cater to both buyers and sellers. For freelance platforms, building a robust platform payments strategy is beneficial to both buyers and sellers. For buyers; they benefit from having access a variety of their preferred payment methods which reduces the risk of customer churn. For sellers; more payment methods means more buyers, which ultimately leads to more transactions. When buyers and sellers are happy, so too are platforms. As I had referred to earlier on in the piece, fintechs like Stripe have made it incredibly easy for platforms to make new payment methods available to their customers. The functionality is, of course, extremely useful, but it also gives rise to another question: How do I manage all these payments? This is where Revenew comes in: a platform built specifically to simplify and transform how platforms manage their platform payments.

The Role of Revenew for Freelance Platforms

As a freelance platform, do you know your margin on every single payment? The question around how one ensures that you’re pricing in a way that makes sense for you and your customers often leaves those in charge of answering this question (often a CFO, VP of Payments or VP of Finance) baffled with the answer most often being “no”. From what we’ve seen at Revenew, platforms that have a deep understanding of their payments’ financial performance are best placed to maximise the financial upside from their embedded payments while retaining their customers through ensuring margins are fair and competitive.

To simplify how platform payments are managed, we’ve built Revenew and its suite of tools to empower platforms with all of the insights, data, and knowledge they need to gain an in-depth understanding of their business - in seconds, and in real time - to answer questions like:

• How many of my payments are loss-making? Why are they loss-making to begin with?
• Which customers are my most profitable/ least profitable?
• Which payment methods should I adjust to help me achieve my overall net margin goal?

Armed with this knowledge and the tools Revenew has built for its customers, platforms are able to easily implement intelligent pricing strategies and create advanced payment flows that cater to their unique needs without the need to do the heavy-lifting of building these capabilities in-house. Our mission is to help platforms level up their payments intelligence, boost margins and improve their operational efficiency with best-in-class tools designed especially for platforms.

Why It Matters

Using Revenew, freelance platforms can track key metrics such as revenue, margins, and processing fees in detail. Having these detailed insights into your freelancers’ performance helps you get to grips with who is generating your platform the most revenue and what the impact on your bottom line would be were you to lose them. Armed with this information, you are empowered to make more data-driven decisions around which freelancers to incentivise to increase engagement and drive loyalty.

• Gain real-time insights into payment trends: By understanding how your customers’ customers prefer to pay and how payment methods affect revenue, platforms can make informed decisions about which payment options to optimise for.
• Analyse margin health: Revenew’s analytics tools can flag transactions that fall below margin thresholds, allowing platforms to take corrective action immediately. We have seen platforms losing $100k+ p/a unknowingly due to loss making payments - making a tool like this invaluable.
• Monitor the impact of processing fees on overall margins: If you’re on IC++, getting a breakdown of all the fees charged can be a headache. Revenew provides these out of the box.

Freeing Up More Time to Focus on Tasks That Move The Needle

Managing payment data and processing fees can be complicated. Platforms need real-time access to consolidated reports on collections, margins, fees, payouts, chargebacks, and other key metrics which are not readily available today without a lot of manual leg-work. From our experience, dissecting a single payment manually can take up to 10 minutes (now multiply this by thousands of payments). This can have a significant impact on operational efficiency, and the cost implications can be crippling. We typically see this play out in one of two scenarios: either a platform employs a team of (expensive) data analysts to make sense of their payments, or they do nothing at all and pray that everything is above board. At Revenew, our mission is to empower the platform economy, and we firmly believe that all platforms should have access to the insights and tools to grow their businesses.

Revenew’s automated reporting tools helps platforms remove the need for manual legwork, allowing them to focus on delivering exceptional experiences for their freelancers rather than getting bogged down in cumbersome, time-consuming administrative tasks:

• By automating the reconciliation of interchange++ (IC++) fees, platforms can minimise the risk of human error in financial reporting.
• Streamlined processes mean less time spent on manual reporting, allowing staff to focus on automating repetitive tasks and drive customer engagement.
• Revenew provides detailed reports that give platforms a clear overview of their payment activities and associated fees, helping you to define and execute a successful payments strategy.

Complex Doesn't Have to be Complicated

At Revenew, we understand how vital it is for platforms’ tools to be in-sync with one another. Our no-code integration capabilities make it simple for freelance platforms to incorporate its tools into their existing technology stack. This ensures that platforms have near-instant insight into their payments’ financial performance in a few clicks.

We’ve made it simple for platforms to connect Revenew with their existing payment processors, like Stripe or Adyen, to enable real-time data synchronisation and automated fee reconciliation. Our no-code integration makes it incredibly simple for platforms to sign up in less than 30 seconds. If you want to see how, check out this video.

A World of Endless Opportunities

In the competitive world of vertical SaaS, it's often a winner-takes-all game. The company that nails it for a specific industry usually comes out on top and can sell both software and financial services to their customers. Embedded finance is a game-changer for freelance platforms. As freelance platforms continue to evolve and expand, having an intimate understanding of your payments’ financial performance becomes a crucial component of your business’s viability and retaining customers. According to Andreessen Horowitz, platforms who incorporate financial services with their existing offerings not only increase revenue per customer (between 2-5x), but they expose new opportunities in markets previously deemed too small, or not cost efficient to acquire customers, to be viable.

By utilising Revenew’s detailed payment insights and intelligent pricing controls, platforms can significantly improve their financial performance while maintaining focus on delivering exceptional experiences for their customers. In a landscape where competition is fierce and consumer preferences are rapidly changing, platforms who embrace innovative payment strategies and diversify their revenue streams will be well-positioned for sustainable growth. If you’re a freelance platform and you would like to discuss how we can help level up your payments intelligence, boost your margins and improve your operational efficiency with best-in-class tools, reach out to us by visiting https://revenew.co/contact or send us an email at info@revenew.co.