Data Dive

Data Dive, Milestone Edition: Gig Payments, Affirm And Contactless March On

Data Dive: Gig Payments, Affirm And Contactless

For baseball fans, April 8 is a day that lives in semi-infamy, as it is the day 45 years ago in 1974 that Hank Aaron officially broke Babe Ruth’s all-time home run record. At the time, it was a record most people believed could not and should not be broken – and in fact, Aaron spent months receiving death threats. But he went on to hit a career 755, a feat that no one came close to matching until 2007, when Barry Bonds broke that record.

In baseball, as in life, the previous unmatchable standard always winds up getting matched and surpassed – only to get matched and surpassed again.

An excellent reminder this week, when big milestones were the theme and gaining new ground was the trend.

Gig workers, for example, will likely soon see an upgrade to their payments speed, thanks to a bit of help from their card network friends.

Visa Ups the Pace of Gig Payments

Visa kicked off last week with the Tuesday (April 2) announcement on its blog that it has introduced Card Payouts, an app designed to help medium to large businesses speed up payments to gig economy workers, enabling them to better manage their total cash flow. Card Payouts is a card-based, front end user experience that integrates with treasury banks’ existing infrastructure.

According to the blog post, the app is built to support card capture, tokenization and card-on-file transactions. Treasury banks participating in the pilot can enable their business clients to download the Card Payouts app from the NetSuite SuiteApp store.

“A hundred forty-five years after money was first moved by wire transfer using the telegraph, money still travels relatively slowly – a surprise given all of the innovation that surrounds it. Waiting on a funds transfer or a check in the mail is hardly convenient in today’s ‘on-demand economy,’ where one in three workers is a solo entrepreneur or independent contractor,” noted Visa.

Though the app, firms can use Visa Direct to improve small business and consumer disbursements, as it will enable real-time payments to NetSuite customers’ independent suppliers and employees.

The move comes as data is demonstrating the prevalence of gig work on the global scene. Visa cited data from the McKinsey Global Institute, which noted 30 percent of the working-age population in the U.S. and Europe derive some or all of their income from independent work.

Apart from the advances in payments capabilities, the new app also aims to help businesses automate back-office functions, track and pay bills and manage cash flow through the integration of Visa Direct, and will complement NetSuite Banking as a service program.

The pilot program is slated to debut in the fall of 2019.

Affirm Affirmed by Investors

Another big funding round was announced by San Francisco-based installment lender Affirm. Last week, the firm said it has grabbed $300 million in a Series F round led by Thrive Capital, with participation from Fidelity Management and Research Company, Sound Ventures and Wellington Management Company.

So far, Affirm has raised $800 million in equity funding.

The new round of funding will go toward hiring talent and further scaling the firm, according to the press release. Affirm saw loan volume of over $2 billion in 2018, and recently inked a partnership with Walmart to bring its installment lending product to customers both online and in-store. The firm has also announced a second flagship office in Pittsburgh.

“The past year has been an incredible period for Affirm, and this investment validates our stage as a mature, established and respected leader in an extremely competitive industry,” noted Max Levchin, co-founder and CEO of Affirm. “I’m especially proud that we’ve built a successful financial services business that does as much good for consumers as it does for retailers and investors.”

Thrive Capital Founder Joshua Kushner said he is excited to work with Affirm. “We continue to be impressed by Affirm’s ability to build innovative products that are impactful to both retailers and consumers,” he said.

Affirm also welcomed some new members to its team. Silvija Martincevic will join Affirm as chief commercial officer, overseeing revenue efforts and bringing alignment to several key business functions, including marketing and communications.

Wells Fargo Comes to the Contactless Party

The 2019 march of contactless card releases carries on, with the announcement last week that Wells Fargo will be launching contactless consumer credit and debit cards.

In a press release, the company announced that the new cards will enable customers to complete quick transactions with a single tap at millions of merchants and transit systems that already accept contactless payments. The cards will be usable for dipping, swiping and for entrance into a mobile wallet.

“At Wells Fargo, our goal is to make the payments experience as seamless as possible for our customers, which is why we are so pleased to launch contactless credit cards for simple tap-to-pay checkouts,” said Beverly Anderson, head of Wells Fargo cards and retail services, in the press release.

Contactless cards will start rolling out to consumers who open new accounts this week, while existing customers will be upgraded when their current cards are expired or otherwise need to be replaced. Wells Fargo will add the feature to consumer debit cards in the summer.

The contactless card feature is built on secure EMV chip technology, which is the same security used on EMV cards. Wells Fargo said in the press release that the contactless payment cards are part of the bank’s push to boost convenience for customers by embracing the latest technologies.

“According to Visa, contactless payments will soon be ubiquitous, with 78 out of the top 100 U.S. merchants (by transactions) currently offering the ability to tap to pay at checkout. For years, consumers around the globe have been demonstrating great affinity for tap-to-pay cards, and Wells Fargo consumer credit and debit card customers in the U.S. can now enjoy the same secure, expedited checkout experience,” Anderson noted.

So what did we learn this week? New things are always incoming – and the pace of paying for them is ever increasing.

Till next week.

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Latest Insights: 

Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. Check out our April 2019 Unattended Retail Report. 

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