dcrabill
Member

What is the Purpose of the Security Period for Payments

I have read several questions and threads  pertaining to Upwork's security period. However, one thing that I haven't been able to determine is the rationale behind Upwork's security period before payments are released. What is the purpose of the security period? What is the process that is Upwork is undergoing during this period to ensure security for clients? Thanks in advance.

10 REPLIES 10
petra_r
Member


Dave C wrote:

However, one thing that I haven't been able to determine is the rationale behind Upwork's security period before payments are released.


It mainly protects Upwork from a proportion of losses due to fraud on either the client side, the freelancer side, or both.

 

Once ill-gotten funds are withdrawn, they are impossible to recover in most cases.

 

 


Petra R wrote:


It mainly protects Upwork from a proportion of losses due to fraud on either the client side, the freelancer side, or both.Once ill-gotten funds are withdrawn, they are impossible to recover in most cases.

That makes sense. I can understand the fraud risk for relatively new clients and freelancers.

 

What is the rationale behind having a five day security period for freelancers and/or clients that are long established and highly rated on the platform though? It seems to me that established clients and freelancers don't pose anywhere near the fraud risk that new members do.


Dave C wrote:

Petra R wrote:


It mainly protects Upwork from a proportion of losses due to fraud on either the client side, the freelancer side, or both.Once ill-gotten funds are withdrawn, they are impossible to recover in most cases.

That makes sense. I can understand the fraud risk for relatively new clients and freelancers.

 

What is the rationale behind having a five day security period for freelancers and/or clients that are long established and highly rated on the platform though? It seems to me that established clients and freelancers don't pose anywhere near the fraud risk that new members do.


True, but there are all sorts of criminal minds in the world and on the Internet.


Simply factor the 5 days into your planning. If it irritates you, think about the people who are paid net 30 or net 60 or quarterly....

 


Petra R wrote:

Dave C wrote:

Petra R wrote:


It mainly protects Upwork from a proportion of losses due to fraud on either the client side, the freelancer side, or both.Once ill-gotten funds are withdrawn, they are impossible to recover in most cases.

That makes sense. I can understand the fraud risk for relatively new clients and freelancers.

 

What is the rationale behind having a five day security period for freelancers and/or clients that are long established and highly rated on the platform though? It seems to me that established clients and freelancers don't pose anywhere near the fraud risk that new members do.


True, but there are all sorts of criminal minds in the world and on the Internet.


Simply factor the 5 days into your planning. If it irritates you, think about the people who are paid net 30 or net 60 or quarterly....

 


All the people who are being paid net 30 or net 60 aren't being charged a 10-20% comission on their services; they get paid in full.

 

Don't you think it's reasonable request that this security period be waived (or at a minimum shortened) for those who have been on the platform for years and are highly rated?


Dave C wrote:


All the people who are being paid net 30 or net 60 aren't being charged a 10-20% comission on their services; they get paid in full.

 

Don't you think it's reasonable request that this security period be waived (or at a minimum shortened) for those who have been on the platform for years and are highly rated?


A waived or shortened security period would be nice but I would prefer UW focus its engineering resources on other things. With my clients off UW, I invoice net 21 but can never be sure payment will be made on time and without having to issue a second notice. And those who pay via credit card (most of them, nowadays) cost me an extra 3-4% in transaction fees. And I have to find them myself, to start with. So the billing, payment facilitation, and marketing that brings good clients to the platform where we can find each other--all of that is excellent ROI on the UW fee IMO.

 

I agree on the value that Upwork offers and totally respect your opinion. I'm not arguing for a different fee structure here. IMHO the rationale that the security period protects Upwork from fraud risk doesn't hold water in the cases of the vast majority of Top Rated Plus and EVT freelancers. It sure would be a nice additional perk for one or both of these programs IMO.

Hi Dave, 

I can see that this topic is still something you feel strongly about. To answer your original question, there is inherent risk in payment processing, driven by the potential of fraud, disputes and chargebacks. We also want to give clients time to review their freelancer’s billed hours and project progress before a payment is released. That is why we established the ten-day review and security-hold period to begin with.

I'm not sure if you're aware but when the pandemic started, Upwork understood how important it is for talent to get their money as quickly as possible. As a result, we took on the additional risk and potential losses and removed the security-hold period for Top Rated freelancers and agencies by rolling out Faster Payouts, so talent can get their money five days sooner.

As long as your client’s billing method can be charged successfully and they don’t dispute your hours, we will apply their payment to your Upwork account five days earlier than before if you are Top Rated. You can then withdraw the money anytime you prefer by clicking here and choosing “Get Paid Now.”

This currently applies for hourly contracts, and the five-day security hold will still apply for fixed-price contracts. We are reviewing the impact of making these payments faster too; we will keep you posted.


~ Avery
Upwork

Hi there, I just want to ask if there is a specific timeframe given on the said date for payments that are to be released?


Kevin Maverick R wrote:

Hi there, I just want to ask if there is a specific timeframe given on the said date for payments that are to be released?


https://support.upwork.com/hc/en-us/categories/360001181014

 

Take a look at your Reports page. It will list a date that your payment will be available. Once the payment is available, then you can manually withdraw it, or wait until it is automatically dispersed. For me, the funds are deposited into my bank one day after making a withdrawl request. Instant pay is also available in some countries, in which case the payment arrives virtually instantly. Hope this helps!