How to Pay for Project Development

If a project is beyond your skills, you must outsource or work with a freelancer. Most of these professionals work in their own home, and might be across the state or the country from you. It can be scary sending money to telecommuters whom you have never met face to face. However, learning more about secure methods of payment can ease your mind.

Instructions

Difficulty: Moderate

1. Look into oDesk. Know that oDesk acts as a middleman between you and the developer. You can find a programmer, get in touch with them and agree on terms. Then, you pay oDesk (that way the programmer knows you have the money) and then release it to them once the job is finished. For their troubles, oDesk takes a 10 percent cut from the programmer.
2. Try Rent a Coder. Rent a Coder is similar to oDesk but has been around for a bit longer. They charge 15 percent, but there are ways to reduce the fees by using preferred payment methods (such as snail mail or wire transfer). Rent a Coder has an "Expert Guarantee" feature that basically lets coders put down a deposit guaranteeing their work.
3. Use PayPal. PayPal is used widely, both independently and in conjunction with services like oDesk and Rent a Coder. PayPal fees depend on the account you have and the account your coder has, but there is usually a percentage taken out of the receiving party's cut.
4. Consider iKobo. For many, iKobo is a good choice, especially if you are sending money internationally. Money is deposited into the coder's iKobo account and they are able to use a Visa card to debit from the account. Fees are much lower than a service like Western Union, and the coder pays only a monthly maintenance fee.
5. Talk with your developer about preferred payment methods. Any of the above options are secure and favorable to you, the client, but depending on the programmer's situation, they may be better off using a certain method. Ask them what they prefer, as this can usually reduce fees for them. For example, if they have a merchant bank account, that will be the best for them. Ideally, mailing a check has the least amount of fees but also the least amount of security.

Tips & Warnings

• Working through a payment service allows for mediated dispute settlements, saving you the trouble of hiring an attorney.
• Rent A Coder and oDesk work a bit like eBay in that you receive bids and are able to check the ratings of each coder. This ensures you'll get a reliable, road-tested programmer for your project.
• Never mail cash or wire money through Western Union.
• Be aware of international taxation laws. Although this usually affects the recipient of a payment, you may want to know what kind of extra fees you may have to pay for sending money out of the country.