Why does it take so long for Upwork to release funded payments?

[jstarresearch]

A month or so ago I had a question about clients paying and I casually mentioned that their projects were "supposedly funded". Well the clients are not the issue. Upwork is the bottleneck in this system. 

If my client funded my project a week ago and released it to me yesterday, it shouldn't take almost a week for the payment to show in my balance. My pending payment is showing that it will be available on May 7. From there it will take another 2-3 days for the money to transfer to my bank. The total time ends up being 8-10 days for a project that was "funded". That is simply too long for the type of service that Upwork says the aim to provide. 

Is there an actual good reason for this delay? Does Upwork offer any compeeling reasons to stay with their service when their fees amount to more than 25% and they delay your "funded" payment? 

Are there any alternatives to release the payments earlier and deposit faster? 

[g_vasilevski]

Hi Jon,

Just to confirm that we don't have 25% fee as well. You have 20% fee on your $500 earning per client, from $500 to $10,000 the fee is reduced to 10% and above $10,000 the fee is reduced to 5%. 

The security hold on the funds is 5 days from the moment your client has released the payment towards you. Our team is always exploring and tests ways to reduce the time it takes for freelancers to access their earnings. Currently we don't have any immediate plans to reduce it for all transactions. Thank you!

[jstarresearch]

You are correct. There are no additional fees (like for deposits) other than the %20 for jobs under $500.

So what exactly is the security hold doing? What ways has Upwork explored that were deemed not tenable?

I understand the sliding scale but it seems extreme and more likely to favor long term, longer hour contracts, and penalize smaller part time projects. Upwork doesn't need to compete with '**Edited for Community Guidelines**' but it would be nice if there was something in the middle.  

[g_vasilevski]

Hi Jon,

Thank you for your feedback, I will share this with our team.

[petra_r]

---

@Jon S wrote:

1) So what exactly is the security hold doing?

2) What ways has Upwork explored that were deemed not tenable?

3) I understand the sliding scale but it seems extreme and more likely to favor long term, longer hour contracts, and penalize smaller part time projects.

---

1) minimises financial losses.

2) they experimented with shorter security periods on various typeds of contracts for quite a while, a couple of years or so.

3) It DOES, because those are more profitable and less risky for Upwork, which is why the sliding scale was brought in in the first place.

[mthornton-cpc]

---

@Petra R wrote:

---

@Jon S wrote:

1) So what exactly is the security hold doing?

2) What ways has Upwork explored that were deemed not tenable?

3) I understand the sliding scale but it seems extreme and more likely to favor long term, longer hour contracts, and penalize smaller part time projects.

---

1) minimises financial losses.

2) they experimented with shorter security periods on various typeds of contracts for quite a while, a couple of years or so.

3) It DOES, because those are more profitable and less risky for Upwork, which is why the sliding scale was brought in in the first place. 

---

They were still doing this testing as recently as March, so it's likely ongoing in some form. I had a very long-term contract for an enterprise client that had the same payment terms and holding period for multiple years, but one day without explanation or heads-up changed to a shorter holding period. It was nice to get my earnings on that particular contract earlier, but it was a surprise. That contract ran its natural course and ended a month ago and my other contracts all use the standard holding period. 

[rwhidbee23]

If the holding period could be reduced for established clients and freelancers that would make sense.  For example if a client has provided over 20 jobs and verified payment etc, I don't understand why the long security hold would still exist.