Last year, 11% of American workers—about 17.3 million people—described themselves as digital nomads. This number has dramatically surged since the pandemic, when remote work opportunities became the norm. As a result, employers and employees realized that being tethered to an office wasn’t always necessary, allowing people to travel without compromising their jobs.
The rising cost of living in states like California and New York made the financial incentive to live elsewhere even stronger. between 2022 and 2023, the number of nomads working independently (freelancers, self-employed, independent contractors, etc.) increased by 14%.
Many of these nomad workers flock to Latin America for a convenient timezone and to enjoy the favorable U.S. dollar exchange rates. In countries like Argentina, for example, a three-bedroom apartment in downtown Buenos Aires costs 8.5 times less ($540) than one in Los Angeles ($4,500). Now a digital nomad can spend their days working a few hours from beautiful Costa Rican beaches, vibrant Argentinian cafés, and scenic Mexican neighborhoods.
They found the key to work is to live, not the opposite.
But this work dynamic is notorious for its obstacles: international fees, infrastructure barriers, complex finances to keep in order, and many other hurdles of becoming a one-person show—which gets even more complicated when doing so abroad. Not to mention the clash between remote work and local cultures.
So, while it might all seem rosy on social media, digital nomads currently struggle to get paid on time, connect with the local economy, and organize their money.
International transaction fees
Upon becoming digital nomads, many keep their U.S.-based bank accounts in hopes of relying on card payments while abroad. Others prefer to open foreign accounts. However, both options pose challenges.
For those keeping their American accounts abroad, international payment fees—averaging 3% per transaction—could accumulate into substantial yearly losses. On the other hand, those who receive money in their foreign accounts face hefty international transfer fees going up to 10% and above, translating into significant financial forfeits for expats trying to improve their finances.
These international transfers can also take one to five working days to arrive in a foreign bank account, resulting in missed due dates and overdrafts.
Companies in the digital banking space, like Revolut or Wise, are doing their best to connect digital nomads to the global economy so they won’t have to worry about sky-high fees. However, many of these solutions are yet to break emerging digital nomad environments and still feature unfriendly monthly fees. Some of these prominent digital banks are also known for being unhelpful in cases of fraud, so their services might come at an added cost of insecurity.
Another option to offset these fees is to use increasingly popular crypto wallets that allow cash withdrawals, local payments, and money transfers in several currencies globally with stable coins—such digital assets are especially gaining ground in Latin America. While mastering crypto takes time, nomads might want to start doing their research to obtain more lenient fees.
Cash-centric economies
Freelance nomads pack up their suitcases to live out of across the globe, meeting new people, trying to learn new languages, and enjoying the cultural nuances of each new place. And, while they may face some cultural shocks, they might never guess that making payments will be one of their biggest hurdles.
Forty-eight percent of Latin American workers are informal; consequently, cash payments are the norm. This means nomads must be ready to withdraw large sums of money monthly—incurring more ATM fees—if they wish to buy anything from corner stores or shops away from malls or supermarkets. This is the most convenient and reliable payment option thus far. Paying bills becomes more difficult when many services only take debit payments from local bank accounts or in-store cash payments.
This divide further stalls digital nomads’ financial growth. Fortunately, the region is catching up to these global trends, and digital solutions are on the rise.
Integrated payment startups like Bold and Clover are servicing small and medium businesses by equipping them with mobile point-of-sale (POS) solutions with embedded payment processing through smartphone apps rather than traditional systems that require more equipment. This means corner stores and other small vendors can receive card transactions, connecting digital nomads who don’t carry cash with local businesses.
However, since these startups are still expanding, local instant payment platforms like Brazil’s PIX, used by 80% of the country’s adult population, are tricky to gain access to as a nomad. For those who wish to stay in the region for longer, getting a Brazilian bank account and leveraging PIX can be the best bet for alternative payments.
While it’s still challenging to get by without a national bank account, especially when nomads don’t plan on staying in one single country for more than a few months, digital payment solutions are becoming increasingly accessible to welcome these remote workers. The more nomads explore the financial nuances and connect with locals about the matter, the more they will grasp the ins and outs of payments in the region. But it’s not without some work.
Complex financial management
Even after adapting to the many ways digital nomads can avoid high fees and make local payments easily, they might end up with a flurry of new cards, lots of cash, and digital apps to deal with. All of these changing dynamics make it hard to keep track of their finances, an added struggle for freelancers doing the invoicing all by themselves.
Being recognized for your hard-earned work is an uphill battle for these types of employment. Only 26% get paid on time, and over half are owed more than $50,000 for already completed work. And, as if that wasn’t difficult enough, getting paid in a different country makes it an even bigger burden.
Plus, the madness of invoicing and receiving payments through several accounts and at unexpected times due to lengthy transfer processing means it’s harder for digital nomads to get their ducks in a row. Without the proper financial tools to support them, these traveling freelancers might get discouraged from pursuing their dream of a better life abroad. The trick is to become hyper-organized and stay on top of invoicing and follow-up messages to avoid late fees.
What’s true is untethered workers need more centralized solutions to keep their finances in order as they hop from country to country. Many financial health apps offered by banks only cater to locals or overlook crucial transactions like the phone, internet, and cable bill payments nomads. Freelance budgeting apps could become a nomad’s go-to in this scenario, helping them manage their income across multiple accounts and currencies simultaneously.
As Latin America’s booming fintech sector keeps growing, so will more financial alternatives to welcome digital nomads as they try to make a better living outside their home countries. Regardless of the region you decide to explore, adapting to foreign customs, including money dynamics, isn’t always the easiest. But with some time and patience to connect with locals and their culture, digital nomads can build resilience and overcome the narrowing financial disconnect.