Small Payments and the Gig Economy

Gig workers are filling an increasingly important need. Some people do gig work as their primary job, while others use it to supplement a traditional employment income.

Financial institutions should analyze their account holder transaction data to identify gig economy customers and develop relevant engagements. Prepaid payroll cards enable gig economy workers to get paid faster and more securely.
Real-time Payments

Real-time payments enable companies to deliver on their commitments to pay in full and on time. These faster, more reliable payment systems offer a powerful advantage to companies that employ gig workers.카드깡 사이트

These workers, such as rideshare and food delivery drivers, telemedicine practitioners, janitors and cleaners and a swarm of others who are paid by the task, ride or delivery, are accustomed to getting their paychecks fast. They don’t want to wait weeks to receive their earnings after an event or two. And when they do, they usually need their money to cover bills and expenses.

Traditional payrolls are doled out on a weekly or bi-weekly basis, and many gig economy workers need more frequent payouts to meet their financial needs. Indeed, surveys show that only 15% of gig workers have the funds on hand to cover an emergency and 29% took out costly payday loans last year.

The growing number of gig workers are demanding that the companies they work with offer them more frequent and flexible payments. Those that can’t provide these services will see their workforces lose loyalty. In fact, a recent study showed that worker turnover is influenced by the pay and experience of the employer, with higher quality and more timely payments driving stronger loyalty.

Gig workers also prefer to use the payment platform they’re familiar with to get their money quickly. Currently, when these workers are hired, they’re often asked to transfer their funds from the payment gateway to their bank accounts, a process that can take up to three days. Those delays are unacceptable for gig workers who must use their wages to pay time-sensitive bills like rent and utilities.

Using the same payment technology that underpins mobile apps, companies can enable gig workers to get their money more quickly and easily. This is the only way to attract and retain these highly skilled workers who are savvy about their options and are not afraid to move on if they can’t find a company willing to meet their expectations for immediate, flexible payment. Payment platforms that offer early wage access or real-time payments can win the loyalty of these workers and create a competitive edge for the businesses that do so.
Payment Flexibility

The flexibility of gig work allows contractors to balance their personal and professional lives. But it’s important for businesses to provide accurate, timely payment. Accurate records help avoid disputes and ensure compliance with tax laws. Automated payment systems and digital payments tools can simplify record-keeping and ensure consistency. They also reduce administrative burdens for both parties, allowing them to focus on providing an excellent contractor experience.

Contractors who are paid in real time can receive their earnings as soon as they complete a shift or deliver their service. Immediate payments also allow contractors to manage variable monthly budgets, ensuring they’re not spending more than they are earning. Combined with the transparency of project-based compensation, these features can improve contractor experience and encourage loyalty.

Delayed payments can create financial vulnerability for workers, especially those who rely on gig work as their primary source of income. They may be at risk of losing access to funds for urgent needs, or resorting to high-interest loans to cover expenses. Faster payments can mitigate these risks, reducing stress for gig workers and improving their financial security.

In addition to offering flexible payments, gig economy companies should prioritize relationship-building with their contractors. This can be done through open and transparent communication about payment terms, project expectations, and deadlines. Moreover, by facilitating flexible payment options such as cash back and digital banking, gig economy companies can foster trust and loyalty.

Despite their disruptor reputations, many gig economy platforms can be restrictive when it comes to their pay mechanisms. Some only offer PayPal or ACH transfers, which can be problematic for workers without established bank accounts. Others require a valid U.S. bank account to receive payments, which can be inconvenient for those who live in countries with different currencies and banking regulations.

Gig workers want to be treated with respect and fairness. They don’t want to be pitted against one another for low-wage jobs that they have no control over. They want to be paid in a way that suits their unique lifestyles and financial circumstances. They also want to know that their employer cares about them as people, not just their work performance. By prioritizing flexible payments, gig economy businesses can boost worker retention and build a stronger brand image.
Reliability

As the gig economy continues to expand, businesses need to ensure that their contractors receive payments promptly and securely. This is particularly important for those who have limited access to banking services and may be vulnerable to fraud or other risks. In addition, providing gig workers with fast, reliable payments promotes financial inclusion by allowing them to immediately use their earnings.

Keeping accurate records is essential for both gig workers and companies, as it provides both parties with the information needed to resolve disputes or questions. Automated payment systems, such as payment platforms or digital payment tools, can help ensure that records are kept accurately and consistently. However, it’s also important to check records regularly and review the data gathered to ensure that records are complete and up-to-date.

A reliable system also allows companies to identify and communicate with high-quality contractors. This helps to build trust and encourage gig workers to continue to work with the company. In some cases, this can even lead to a transition from independent contractor to permanent employee status.

The gig economy includes four main sectors: transportation, non-transport services such as cleaning, dog walking and telemedicine; direct sales through online marketplaces; and leasing of goods and property. Many of these sectors employ online platforms that connect independent suppliers to customers and manage the transaction between them. Online platforms also enable participants to offer their services in a variety of locations and currencies.

Despite their growing popularity, these platforms can be exploitative for some workers. The platform-mediated model of labour reduces workers to “data points” within the system and produces an asymmetrical power relation that serves as a panopticon (Gregory & Sadowski, 2021). Workers are often incentivised by performance metrics that use algorithms to evaluate them as a way to control them (Walker et al., 2022).

To avoid exploitation, it’s crucial to provide gig workers with a trusted platform that offers clear and transparent terms of service. This should include detailed payment processes and a commitment to timely, secure payments. Additionally, it’s important to offer a wide variety of payment methods that empower gig workers to make the choice that works best for them. These options should include virtual and physical cards, same-day ACH, push to bank or debit and premium currency conversions.
Security

As the gig economy continues to grow, companies need to look at a wide range of issues, including ensuring workers are secure. While the explosion of apps that connect gig workers with clients – and vice versa — has created a financial opportunity for millions, it also creates significant security risks. According to Raman, contractors in the gig economy — including those providing transportation services (Uber, Lyft), non-transport services such as house cleaning, dog walking and telemedicine, or marketplaces for goods ranging from apparel to furniture — share data that includes user demographics, accounts, contact information, social media updates and location tracking. That makes them a target-rich environment for cyberattackers.

These workers often use their own devices — personal iOS and Android phones, laptops and tablets — for work-related activities. These gadgets may be taken to the home, office, bar, bathroom and everywhere else, making it easy for anyone to access their personal information. And if they don’t properly encrypt their mobile devices (a relatively simple step on most consumer-grade devices), it can open them to attacks that would be impossible for regular employees to defend against.

For these reasons, it’s critical to use tactics that span technologies, processes and the company’s own people to beef up security measures for gig workers. That includes clear direction from the C-suite on which, if any, vetted platforms gig workers can be assigned to; limits on Bob-like outsourcing; breach-notification requirements; and financial consequences for noncompliance.

In addition, to identify the audience of gig-economy consumers and provide relevant engagements, financial institutions need to leverage their first-party transaction data. It offers a unique view into an individual’s products, financial needs and trends in lifestyle activity and interests. It can also reveal how they spend money with merchants, whether they have held-away accounts and more.

For the many Americans who count on their gig income to cover expenses, it’s important that payments arrive quickly. In fact, research indicates that 94% of gig workers associate faster pay with greater financial peace of mind. That can be accomplished through a variety of approaches, including embedding finance into the platform and offering transparent cash advances.