Payroll & Contractor Payments

Paying contractors got easy. Being allowed to got hard.

Q: Is it still hard to pay a contractor in another country?

No, that has become the easy part. Stablecoin payment volume roughly doubled to about 400 billion dollars in 2025, instant bank rails like FedNow settle in seconds, and a single platform can pay a contractor in their local currency, in US dollars, or in a stablecoin. The hard part is everything wrapped around the payment: whether the person is legally a contractor, which tax form fires, and whether the payout instruction is even real.

Stablecoins and instant rails made paying a contractor anywhere a solved problem: fast, cheap, and boring. In 2026 the hard part is everything around the payment, whether they’re legally a contractor, which tax form fires, which country can now tax you, and whether the payout instruction was even real.

By Albert Richer, Founder & Lead Editor Updated August 18, 2026 / 8 min read

Sources Stripe·IRS·U.S. Labor Dept·Federal Reserve·CFPB·Deel·AFP·FBI·World Bank (all cited, with direct links, below)

The bottom line

Paying a contractor anywhere is now a solved problem. Stablecoin volume doubled to about $400B in 2025, most of it business payments, dollar tokens clear in seconds, and instant bank rails went mainstream. The payment is the easy part. The rails collapsed ↓
The hard part is the rules, and they won’t sit still. In about a year Washington abandoned its 2024 contractor rule, rolled back 1099 reporting, and reclassified earned-wage access, while states went their own way and misclassification still doubles your bill. Compliance is the moat ↓
So buy for the audit and the trust, not the demo. The platforms that win auto-adapt to rule changes and guard the money, at a moment when the biggest vendors are consolidating, fighting dirty, and payroll fraud is surging. Who holds the money ↓

For most of history, the hard part of paying someone was getting the money to them. A bank, a wire, a few days, a cut for everyone in between. Paying a contractor overseas could take a week and cost 7%. That problem is basically over.

Today you can pay a freelancer in Manila or a crew in Ohio in seconds, for pennies, in dollars or their own currency, from one screen. Moving money got easy.

What got hard is everything around it. Is this person legally a contractor? Which tax form do you file? Can another country suddenly tax you because of them? And is the request to pay them even real?

The payment ↓

Solved. Fast, cheap, boring.

Seconds to land. A fraction of a percent to send. Every serious tool does it.

Everything around it ↑

The actual job now.

Classification, taxes, cross-border rules, and fraud. This is what you are really buying.

That flip is the whole story. Here is how each half is moving.

The rails collapsed to almost nothing

Moving money used to be the whole job. Now it is the cheap part, which is exactly why it no longer decides anything.

Sending money got dirt cheap and near-instant. Crypto rails and bank rails both got there in the same year, so cost and speed stopped being a reason to pick one platform over another.

Start with the biggest tell. Stripe says stablecoin payment volume doubled to about $400 billion in 2025, roughly 60% of it business-to-business. That is not crypto speculation. That is companies moving payroll-sized money.

And everyone is piling in. Visa reported a multi-billion-dollar stablecoin settlement run rate, and Mastercard agreed to buy the stablecoin firm BVNK for up to $1.8 billion. Three of the biggest names in US payments, the same bet, months apart.

In July 2025 it became legal-grade. The GENIUS Act gave dollar stablecoins their first US federal rulebook: full cash and Treasury reserves, monthly public disclosures.

Cost to send money across borders

Old-school remittanceWorld Bank avg, $200

6.36%

Fintech railse.g. Airwallex

~1-2%

Stablecoindollar tokens (USDC)

under 0.5%

Bar length = cost. Source: World Bank Remittance Prices Worldwide (Q3 2025 global average to send $200); Airwallex vendor figures. A traditional bank wire sits at the pricey end too, but it is charged as a flat fee per transfer, not a percentage.

And it is not only crypto. Regular bank rails went instant too. The Fed’s FedNow service, which settles around the clock, ended 2025 with 1,600-plus banks and $853 billion in transfers, up from $38 billion a year earlier. Same-minute pay, in plain dollars, is now normal.

Workers are voting for it. In Deel’s 2026 report, built from over a million contracts, 84.6% of Argentinian contractors chose to be paid in US dollars instead of their own currency. The payment platform quietly became a way for a worker to opt out of their own money.

I see it every time we test these tools for our rankings. I pushed a test payout overseas through Airwallex, and it just landed in the contractor’s local currency. No wire, no SWIFT fee, no plugin. The money part felt solved. Every interesting question came after it.

What this means for you

Don’t pick a payment platform on speed or price. Most serious platforms now clear that bar, so it is a tiebreaker, not a reason to buy. The next two sections are where they actually split apart.

✦

The rules won’t sit still, so compliance is the moat

The payment is instant. The rulebook is not. In one year it changed direction more than once.

The rules keep moving, and getting them wrong is expensive. A platform’s real value is knowing which rule applies today, and proving it later.

Take the biggest one. The federal rule for who even counts as a contractor has changed three times in three years.

The contractor rule, in whiplash

Mar 2024

New federal rule takes effect. Harder to call someone a contractor.

May 2025

Labor Dept tells its own investigators to stop applying it.

Feb 2026

Government proposes scrapping it and going back to the older test.

Meanwhile, the 2024 rule is still on the books, so it still governs private lawsuits. Three versions are effectively live at once.

The tax side moved just as hard. The dollar figure that triggers a 1099-NEC for a contractor just jumped, after sitting frozen for 71 years.

$600

since 1954

→

$2,000

for 2026

The IRS expects 19.5 million fewer 1099-NEC forms because of it. The 1099-K threshold also flipped back to $20,000 and 200 transactions. Your software can’t just hard-code the old rule.

Even the “get paid early” feature, earned-wage access, flip-flopped for years before the CFPB landed in December 2025 on treating it as not a loan.

Loose enforcement is not the same as safe. States went their own way, and getting classification wrong is still costly. Under federal wage law, a misclassification can double the back-wage bill. The recent bills are real money:

GrubHub settled a driver case for $24.75M.
Scale AI settled for $12.5M.
An appeals court upheld a $9.3M judgment over a thousand-plus misclassified nurses.

Do it on purpose and it stops being a wage dispute. The IRS can treat willful misclassification as tax fraud. And federal construction jobs add their own layer: miss the Davis-Bacon certified-payroll rules and you face back wages, withheld funds, or a ban from federal work for up to three years.

The rule you follow today may not be the rule you’re audited under tomorrow.

Then there is the trap that catches global teams: permanent establishment. If a contractor works from another country, that country can decide your company now owes tax there. Forget the “so many days makes it taxable” folklore; the real triggers are having a fixed place of business there, or someone who regularly closes deals on your behalf. “Just pay them as a contractor” can hand a foreign tax office a claim on your profits, over one person.

Here is the moment it clicked for me. The first time a platform in our 1099 rankings flagged a contractor’s tax-ID mismatch before I could send the payment, I understood what I was actually paying for. Not the payout. The “don’t pay this one yet.” That is the whole difference between a clean January and a pile of IRS notices.

You think you’re buying

A button that sends money.

You’re actually buying

Permission to send it, and proof you were allowed.

What this means for you

The platform’s job is to know the right rule per worker, per state, per country, apply it on its own, and prove it later. Look for a real classification test, TIN matching before payout, per-country tax handling, permanent-establishment awareness, and audit logs you can export. That is the moat.

✦

Who holds the money, and who’s coming for it

Once moving money is a commodity, the value and the danger move to the same place: whoever holds the funds and decides when to let them go.

The money is pooling into a few big platforms, and fraud is chasing it there. Trust, not payout speed, is the product now.

Watch where the money is piling up. Deel, an all-in-one platform for hiring and paying people abroad, is valued around $17.3 billion, with roughly $1.4 billion in recurring revenue and climbing. In March 2025 it swallowed Safeguard Global’s payroll division and its 140-plus markets.

Same pattern as the payment layer, one level up: the rails got cheap, so the winners are consolidating the accounts, the compliance, and the trust into a few very large places that hold your workers’ money.

How valuable is that spot? Valuable enough to fight dirty over. In 2025 the rival platform Rippling sued Deel, claiming a Deel-cultivated employee had searched its systems for “Deel” about 23 times a day for four months. It has since grown into racketeering claims and a Justice Department criminal investigation. Deel admits a roughly $6,000 payment to the employee but denies orchestrating espionage; the employee admitted in an Irish filing that he acted as a spy.

We spent decades engineering the friction out of moving money. Some of that friction was quietly protecting us.

Here is why holding the money matters. Instant rails cut both ways: a fraudulent payout clears in seconds too, and the window to catch it is basically gone.

!!!·

Roughly 3 in 4 US companies hit a payments-fraud attempt in 2025. Most are barely fighting back.

76%

faced attempted or actual payments fraud

74%

hit by email scams, the “change my direct deposit” trick

17%

use AI to fight it

Source: Association for Financial Professionals, 2026 Payments Fraud survey (465 US treasury teams).

And the fraud moved upstream, to the hire itself. US authorities charged a scheme where more than a hundred companies unknowingly hired remote “IT workers” using stolen identities, AI-written resumes, and deepfake video interviews, run through US “laptop farms” to look local. It moved millions before anyone noticed. The FBI has flagged the same trick in payroll-diversion scams for years.

Deloitte expects AI-driven fraud losses in the US to climb from about $12.3 billion in 2023 to $40 billion by 2027. The person you think you’re paying may not exist. The payout rail won’t know. Your platform has to.

What this means for you

Ask who holds the money, and who guards it. Look for identity checks, alerts when a payee’s bank details change, a second approver for new payees, exportable audit trails, and a vendor solid enough to still be around in five years. When the payment is instant and can’t be clawed back, the safeguards around it are the product.

Who this matters to

Companies with contractors abroad

Best use: paying people across borders without opening an entity in every country. Must have: local-currency and stablecoin payout, per-country tax handling, permanent-establishment awareness. Watch out: “just pay them as a contractor” creating a taxable presence you never planned for.

Global & cross-border payouts →

Finance teams that own 1099s

Best use: filing correctly through shifting thresholds. Must have: TIN matching before payout, automatic 1099-NEC and 1099-K handling, backup-withholding logic. Watch out: software that hard-codes the old $600 rule as the world moves to $2,000.

1099 tax reporting →

Marketplaces & platforms

Best use: paying thousands of sellers or gig workers at once. Must have: mass payout, split payments, onboarding and identity verification at scale, fraud controls. Watch out: instant payout rails with no anomaly detection on new payees.

Marketplaces & platforms →

Field-service & on-site work

Best use: paying crews on construction and prevailing-wage jobs. Must have: Davis-Bacon certified payroll (WH-347), classification tracking, per-job records. Watch out: back wages, withheld funds, or debarment from a compliance miss on a federal project.

Field-service & on-site work →

From the research to the shortlist

Where to take this next

The research changes what “best contractor payment platform” means. Moving the money is table stakes now. What separates the winners is classification, tax handling, identity and fraud controls, and audit trails you can defend later. Our rankings, which weigh tools like Deel, Rippling, Airwallex and OnPay, judge them on that fuller bar.

How we measured this

This report synthesizes publicly available research rather than presenting original data. We prioritized primary and government sources: Stripe’s 2025 letter, the GENIUS Act, IRS Internal Revenue Bulletin 2026-19, Department of Labor bulletins and the Federal Register, the OECD Model Tax Convention, Federal Reserve FedNow data, and the World Bank’s Remittance Prices Worldwide.

Fraud figures come from the Association for Financial Professionals’ 2026 Payments Fraud survey (465 US treasury practitioners) and FBI/IC3 warnings, with the Deloitte projection labeled as an estimate. Deel’s hiring and currency data is vendor-reported and identified as such. Court settlement figures (GrubHub, Scale AI, and the Medical Staffing of America appellate judgment) are drawn from case reporting. The Stripe Bridge price is a reported figure Stripe has not officially confirmed. Figures were checked against these sources in August 2026.

Sources & references

Stripe, the White House, the IRS, the Department of Labor, the Federal Register, the OECD, the Federal Reserve, the World Bank, the AFP, the FBI and the DOJ are primary or government sources. Deel figures are vendor-reported and labeled as such; the Deloitte number is a projection; court settlement amounts are from case reporting; the Stripe Bridge price is reported, not officially confirmed by Stripe.

Common questions

Is it still hard to pay a contractor in another country?

No, that’s become the easy part. Stablecoin payment volume roughly doubled to about $400 billion in 2025, instant bank rails like FedNow settle in seconds, and a single platform can pay a contractor in their local currency, in US dollars, or in a stablecoin. The hard part is everything wrapped around the payment: whether the person is legally a contractor, which tax form fires, and whether the payout instruction is even real.

What does misclassifying a contractor actually cost?

Potentially double. Under the Fair Labor Standards Act, misclassification can double the back wages you owe through liquidated damages, and recent settlements ran to $24.75M (GrubHub) and $12.5M (Scale AI), with a $9.3M appellate judgment against one staffing firm. Do it deliberately and the IRS can treat willful misclassification as tax fraud. The rules also keep moving: the Labor Department stopped enforcing its 2024 contractor rule in May 2025 and proposed replacing it in 2026.

Do I still need to send 1099s to contractors in 2026?

Often yes, but the thresholds changed. The 1099-NEC and 1099-MISC threshold rose from $600, unchanged since 1954, to $2,000, and the IRS expects roughly 19.5 million fewer 1099-NEC filings as a result. The 1099-K threshold reverted to $20,000 and 200 transactions. Good software applies the current rule per form and matches a contractor’s tax ID against IRS records before you pay.

How do contractor payments actually get defrauded?

Mostly through the people and the instructions, not the rails. 76% of US organizations faced payments fraud in 2025 and 74% were hit by business-email compromise, including fake “please change my direct deposit” requests. The FBI and DOJ have documented payroll-diversion scams and schemes where fake remote workers used deepfake interviews and stolen identities to get hired. Look for identity verification, bank-account-change controls, and approval steps for new payees.