Speed may make all the difference in payments, but when it comes to the gig economy, flexibility in getting paid is just as important as the flexibility of workers’ schedules.
In an interview between PYMNTS’ Karen Webster and Brent Warrington, CEO of Hyperwallet, conversation focused in part on a key finding from the Gig Economy Index that showed 65 percent of workers in the gig economy wouldn’t quit their gigs for a full-time job. According to the gig workers surveyed, most are happy with their experience in the gig economy and are satisfied with their long-term employment prospects. Any presumption that these individuals entered the gig economy out of desperation is erroneous.
“A lot of people think taking on gig work means just becoming an Uber driver,” observed Warrington. But as he pointed out, the freelance economy predates Uber, and gig workers with relevant skill sets can parlay those skills via contract work (in writing or photography, for example) into “a substantial salary by taking on multiple projects throughout the year — probably even more so than if they were working just one consistent job.”
The flexibility of the gig economy, both in terms of schedule and earning potential, enables individuals to work for a month or two, take a month off, then return to that cycle when a new project emerges. This is especially appealing to the millennial crowd — which, as Warrington explains, “loves that freedom.”
Employers are beginning to find a “comfort level” with the gig economy, as decisions no longer revolve simply around whether to hire someone who will be in the office, on-site, or whether they will be remote or working from home. Warrington explained: “If you are looking to rapidly expand and grow your business and you are dependent upon talent, the cycle of finding and onboarding and benefitting from flexible workers will always be quicker than attracting and assimilating W-2 workers.”
Warrington noted that companies (in technology and otherwise) have come to embrace the opportunity presented by the gig economy space; with the ability to hire “on a per-project basis … companies, in particular, can move globally and expand their opportunities.” That’s concurrent, said Webster, with an uptick in the number of individuals who are opting to join the gig economy, as the vagaries of managing freelance work — and perhaps even finding it in the first place — are smoothed over.
Marketplaces have sprung up with platforms that allow projects to be easily assigned and tracked, and payments to be made (aided by Hyperwallet, for example) in a number of chosen currencies and methods. But putting money in gig workers’ wallets quickly remains a key focus of the payments side of the equation. Increasingly, we see gig economy companies pursuing real-time payouts to gig workers on their platforms, or — at the very least — same day or next day. This is still significantly faster than the several weeks of waiting that marked gig work in the not-too-distant past, and workers have been responsive to the improved speed of earnings delivery.
Still, as Webster noted, more than 50 percent of gig workers pay for “the privilege of getting their money.” Warrington agreed, offering that “this is probably some holdout from the legacy approach around convenience.” Rather than waiting for a check to be delivered, individuals could pay a little money to receive their money electronically.
That sort of convenience, Warrington explained, has become table stakes, with gig workers increasingly expecting that they will get paid when and how they want. The associated fees, on the other hand, have become an old-school frustration that can push workers away. “More and more, the payer is bearing some of those costs,” observed Warrington, with an eye on creating “the right experience for those payees.”
Payment evolution has seen the shift from paper checks to digital money (with some attendant fees), to global payments in a foreign exchange setting. Now, said Warrington, transparency is the key battleground in the payments space. The duo agreed that payments can become a major competitive advantage for companies operating in the gig economy.
Turning to a discussion on innovation, Warrington pointed out that “we continue to see this push for speed, and particularly a regional approach to speed” in payments, which is being refined. And then there’s the drive to implement more seamless onboarding tools between the payee and the payer, rooted in Know Your Customer (KYC) efforts.
Warrington noted that there is a real desire for firms “to bridge the gap between the W-2 experience and the 1099 experience.” The payments industry is in the midst of self-reflection, moving from the rudiments of getting people paid toward providing the optimal payment experience. Warrington predicted that the maturity cycle for payments in the gig economy — in terms of getting people paid with speed — is likely to be a quick one.
Warrington went on to note that improved payment speed and method has more significant applications than just getting ahold of spending money faster. When it comes to getting funds to people during times of emergency, quicker and more convenient payment methods could truly make the difference between life and death. For example, receiving a physical check and depositing it in the bank during a disaster event may well be impossible. As Warrington illustrated, there needs to be a more efficient fund distribution process for those kinds of situations.
For that reason, Hyperwallet recently hosted a hackathon event in Austin, where the company challenged coders to develop new fund disbursement solutions for use during a disaster. The top prize of $2,500, sponsored by Visa, went to Team Get 50/Give 50, whose disaster solution leveraged fund distribution using Hyperwallet’s Visa Direct Integration with donation acceptance and donor qualification features. The second-place award, with an attendant $1,500 prize, went to Team Reach, and the third-place finish went to Team Guard Me.
“When we talk about innovation, we need to broaden our perception of what it means to pay, and to get paid,” Warrington concluded. “We also need to think about how these technologies can be applied during dire, even calamitous situations — like a hurricane, or a forest fire — to help those most in need.