Faster Payments

Stripe Offers Instant Payout For On-Demand Workers

Stripe is a relatively small startup that competes against world-class players like Braintree (backed by PayPal) and WePay to make it easier for digital businesses to do all the wide and wonderful things associated with payments.

It has just opened the hood on its new enhancement: Instant Payouts, a service built for marketplaces and their 1099 workers. Functioning properly, contract workers can reportedly be paid “within minutes” directly to a Visa or Mastercard debit.

Instant Payouts are only half new to Stripe — the payments services firm has been offering it to a handful of select customers already. Lyft, Care.com and goPanache all already are participants in the program. According to reports from within those firms, the service is a competitive advantage against other marketplace business that make their workers wait to get paid.  Last week, Lyft publically touted its year one stats with the program — according to their reports it has paid out $500 million to drivers through the scheme so far.

Stripe is now officially opening up  Instant Payouts as a product for any marketplace (starting first in the U.S.) that already uses Stripe’s Connect basic payments API. Stripe makes money when the transaction is made — in this case, Stripe takes 1.5 percent of the payout amount, with a minimum fee of 50 cents.

“As soon as we authorize a transaction, the money is guaranteed,” said Lachy Groom, Stripe’s card infrastructure lead (who is a dead ringer for Stripe’s co-founder John Collison, just FYI).

Groom noted that while many payments services are still using the relatively slow automated clearing house network (ACH) to transfer money, Stripe — by virtue of  deals with Visa and MasterCard — uses the “fast payment” rail for this service.

Strip is not alone in the effort; working with GoBank, Uber launched a program earlier this year called Instant Pay. Drivers initially had to have GoBank cards to access the service — but it has since expanded to cover any and all debit card-based bank accounts. Braintree offers Venmo Payouts — though at one day, that service is still a bit slower than instant.

 

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