Making or breaking a matchmaker enterprise may not always be about how well supply and demand can be managed. It can be about how it pays its remote workforce. Serial FinTech entrepreneur and Hyperwallet CEO Brent Warrington joined this week’s The Matchmaker Is In series and shared his perspective with hosts Karen Webster and economist and “Matchmakers” author David Evans on why it pays to be easy, fast and transparent.
Though the use of the 1099 workforce is nothing new — just think Mary Kay consultants all decked out in pink, driving their pink Cadillacs — the number of on-demand platforms connecting people with skills to those who have a need has skyrocketed, enabled by new technologies and innovative business models.
But, unlike years past, when finding new customers and recruiting and training new reps was the biggest challenge, today, the biggest friction that these matchmakers face is paying the suppliers of those services. Plus, this becomes even more complicated the more remote and global the workforce becomes.
In the latest episode of The Matchmaker Is In series, hosts Karen Webster and David Evans, economist and author of “Matchmakers: The New Economics of Multisided Platforms," get the perspective of Brent Warrington, CEO of Hyperwallet, on how these powerful, on-demand marketplaces can avoid the friction-filled path to global payouts for their remote workforces.
The New, Remote Workforce
As on-demand companies, like Uber and Lyft, have surged in popularity, so has their need for 1099 workers to tackle the work at hand. But, Warrington said, many struggle when it comes to paying out employees, no matter where in the world they’re located.
With that, a whole new level of friction in the payout process has been created in thinking about how these matchmakers interact on a global basis with their remote workforces, Warrington said.
A process, Warrington said, that requires speed, transparency and simplicity.
Paying (Out) The World
As Warrington told Webster and Evans, Hyperwallet is in the business of enabling.
As technology has provided the opportunity for the 1099 workforce to flourish globally, it has also presented a huge number of people expecting to be paid quickly and conveniently.
Regardless of a platform’s vertical, business model or type, Warrington said having a global workforce is no easy feat.
"We are big believers that everything should, as much as possible, remain local within countries to take a lot of the foreign exchange burden off of people,” he explained.
While foreign exchange fees have generated a lot revenue for many companies, Hyperwallet's clients have made it clear to the company that those fees are painful, and they’ve had enough.
Keeping things local can help to not only address a big pain point with global payouts but also assist those 1099 workers in getting paid via the method that works best for them.
Depending on the country in which they live, that could even mean cash payments.
Hyperwallet offers cash pickup at half a million locations globally, also enabling its matchmaker customers to pay their workers via program-run branded cards, accounts, virtual cards, their own cards or even via check.
Warrington said the goal is to give people options. As a matchmaker that helps to solve a specific pain point for other matchmakers, Hyperwallet’s closed-loop system allows it to take on the risk and remove the friction for its customers.
Interestingly, Warrington noted that many businesses have accepted the challenges and losses that come with trying to facilitate global payouts on their own, even if it means anticipating that they will only be able to achieve a certain success rate with sending checks cross-border. Hyperwallet looks to give these businesses a different way, with the goal of helping these matchmakers achieve greater success than they could reach by going it alone.
Conquering The Borderless World
"Everyone is looking to create a borderless business model, whether it's a startup or more broadly,” Warrington explained, noting that Hyperwallet has started to see many traditional ideas and services being deployed differently and globally, which means these services are being supported by different types of ecosystems of workers.
Warrington said there has been a massive shift in how people see their buyer universe and, more importantly, how they think about supporting that buyer universe globally.
Not only does global payout come with challenges, but it is also complex to maintain the right controls around money laundering, compliance, KYC, onboarding and more.
Hyperwallet’s approach is to provide a single integration that can “unlock the world” to matchmakers going global.
"After you're connected and integrated, you go where you want to with your business. You never have to worry about how you're going to pay whoever sits on either side on that marketplace,” Warrington explained.
With a global regulatory environment that is unstandardized and dynamic — fluctuations can arise due to anything from a legislative change to an attempted government coup — it’s hard to find any matchmaker out there that’s getting things exactly right.
But, Warrington said, matchmakers today are focused on the right things and, more importantly, asking the right questions.
“There is a very sophisticated buyer group on payout, whereas, in the past, you just went to your bank and tried to figure out how to do global wires,” he stated. “I think there's been a really rapid education and escalation of friction that now people are asking the right questions and pushing the right direction.”
When it comes to the 1099 workforce ecosystem, Warrington expects that matchmakers will continue to have to push beyond just ensuring they are able to get payments from Point A to Point B anywhere around the world.
These marketplaces will also look towards creating a healthier ecosystem for their global employees. An ecosystem that provides access to some of the same benefits that their W-2 counterparts enjoy: help with taxes, benefits, even retirement plans.
"There's becoming a bit of a fight for mindshare of the 1099 workers out there. The next race will be to see who perfects this utopian environment for which a 1099 wants to be in," he said.
In other words, not only who can provide access to consumers with a need but those who can provide a portfolio of services to meet the needs of the independent contractors themselves.