What was once novel in payments becomes table stakes, and what was once simply nice to have becomes an expectation.
In a workweek that may be anything but predictable, it makes sense that real-time payments would be a choice widely embraced by gig workers. They value the option to be paid as work is performed, at the end of every shift and project if they so choose.
In Canada, the gig economy is becoming firmly rooted across any number of sectors: One in 10 Canadian adults identify as an independent contractor.
This week, Visa debuted DoorDash Fast Pay, a Visa Direct integration with Stripe’s Instant Payouts offering that enables faster payouts to drivers across Canada.
In terms of mechanics, DoorDash is using Instant Payouts with Stripe Connect in the U.S. and Canada, allowing Dashers to accept payments and direct them to their debit cards or bank accounts. This helps businesses create a platform for purchases and payments between third-party buyers and sellers.
DoorDash’s delivery workers normally receive weekly paychecks, but under the Fast Pay program, U.S. delivery workers can cash out their current earnings once each day for a $1.99 fee. The funds are not deposited directly to workers’ bank accounts but are instead pushed to their debit cards.
Filice said that at a high level, DoorDash’s delivery workers can, at the end of the shift or end of the day, immediately access the funds that they are owed
Past is Prologue
DoorDash Fast Pay has been available for several years in the United States and, if past is prologue, the rewards will accrue in Canada. The U.S. rollout has found that employees with real-time payment options are among the best performing employees, using Fast Pay at least once a week.
Of instant payments in general, but particularly in Canada, “They’re becoming table stakes,” Filice said. “The reality is that these organizations are competing for individuals, and one great way to compete for individuals is to offer more flexibility on the payments side.”
And, as he noted, Canadians will choose who they work for — and choose who they want to work for — based on access to funds. After all, it’s more attractive to work for an organization that allows employees to receive money on an as-earned basis, rather than having to wait a week to be paid for last week’s work.
Visa’s own surveys of gig workers showed that almost nine out of every 10 (89%) workers said they’re likely to sign up for real-time payments, and two-thirds (66%) said they would select gig companies who offer real-time payments instead of others.
“This benefits the business itself, in terms of worker availability,” he said.
Setting the Stage
Filice maintained that the integration of Stripe’s Instant Payouts feature with Visa Direct sets the stage for a wider embrace of real-time business payment disbursements to Visa credentials.
“Disbursements are becoming more critical for businesses and governments around the world,” Filice said. The pandemic, of course, emphasized the need to be able to move money with speed.
He said in Canada, account-to-account disbursements are helping to displace traditional ways of moving money, including bank transfers, and are making inroads against paper checks.
Drilling down a bit, he said, FinTechs have been highly-visible adopters of instant disbursements, ranging from digital brokerages to Block’s Cash App. There has been growth in instant insurance payouts and crisis payouts that get money to people in need, without them having to wait days for funds to settle.
Filice said the greenfield opportunity, writ large, is significant. He added that over the near term, Visa will be enabling 3.5 billion digital wallets around the world, on top of the access that the network already has with five billion bank accounts globally.
“This opens the door to being able to move money to anyone around the world instantly,” he added.
With a nod to the natural progression of real time payments, he noted that while gig economy payouts and peer-to-peer (P2P) transactions have been driving forces and catalysts, business-to-consumer (B2C) payouts are likely to see a groundswell.
Remittance payouts, he said, are also a key beneficiary of faster payouts, where migrant workers send money back home to family and friends to pay for medical bills, schooling and groceries.
“With remittances, it’s critical that money move in real-time and in a way that’s efficient — and does not add significant cost to the sender — and benefits these economies where 20% of their GDP can come from remittances,” Filice said.
Looking ahead, Filice said all manner of payments will gravitate toward real time.
“We’re all moving in that direction, as long as we can make it efficient and everyone upgrades their systems in order to handle those payments,” he said. “You’ll see greater demand for real time because it benefits consumers and also the business that offers it.”