The gig economy is thriving, and workers are taking note: Approximately one-third of the U.S. workforce has participated in it in some way. Gig workers provide rides to the airport, deliver take-out and move heavy furniture, among other tasks. These workers benefit from flexibility in their gigs and can supplant their income through their side hustles, but how do they get paid?
While there are advantages to the gig life, according to the PYMNTS Disbursement Tracker, there are plenty of pain points surrounding the way these workers get paid. Workers want faster payments and don’t want to be paid via direct deposit. Gig economy platforms have found an alternative.
A little more than half — 51 percent — of full-time gig workers prefer to be paid via PayPal. In fact, PayPal President and Chief Executive Dan Schulman announced in September that the number of active accounts on the company’s platform recently surpassed the 250 million mark. In a company blog post, Schulman said this marks an important milestone for the digital payments company. In a letter to employees, he wrote, “On Feb. 27, 2017, we announced that we had surpassed 200 million active accounts. The fact that we’ve added an additional 50 million accounts in a little more than 18 months – nearly three million accounts per month – is a testament to the tireless work you’ve done on behalf of our customers to add more and more value to our platform.” To illustrate the importance of the 250 million mark, Schulman pointed out that if PayPal was a country, it would be the fifth most populated, ahead of Brazil and just behind Indonesia.
Three quarters — 75 percent — of college-age consumers prefer to interact with mobile banking apps. To serve millennials and other consumers, Wells Fargo launched a mobile banking app called Greenhouse by Wells Fargo last year. The app, which was announced in November, includes tools to help consumers manage their money and see where they stand financially. In a press release, Wells Fargo said that by combining personal finance management tools with Wells Fargo banking, the Greenhouse mobile app will help consumers pay bills on time, spend confidently and start to build a savings cushion. Wells Fargo Head of Payments for Virtual Solutions Avid Modjtabai said at the time, “We believe the Greenhouse experience will appeal to a broad base of consumers, many of whom have several income sources or are paid infrequently, which can make budgeting a challenge. Whether you are new to banking, don’t have regular paychecks or typically manage money with cash, we believe the Greenhouse experience can help you manage day-to-day spending while planning for the future.”
Nearly nine in 10 — or 87 percent — of executives expect real-time payments to have a positive effect on liquidity planning, forecasting and cash investment. Even so, the enterprise is still unsure about faster and real-time payments. With companies paying suppliers on strategic schedules, real-time transactions aren’t always necessary — or beneficial — for the B2B payments space. Yet there is some adoption of faster payment technologies among corporates. In the U.S., NACHA found B2B payments made up 6 percent of the nearly two million same-day ACH transactions that occurred in the first 11 days the service went live.
Eighty-five percent of gig workers would work more often if paid faster. To provide more options to its drivers, Uber announced in April that it was launching its Uber Visa Debit Card from GoBank. The card, which offers the ability to cash out earnings on Instant Pay for free up to five times a day, is designed exclusively for drivers and delivery partners, and rewards everyday spending on gas and groceries. And in January, Wirecard and gig economy company Moonrise said they were working together to provide same-day payment to gig workers on the Moonrise platform. Moonrise links these professionals to on-demand jobs, while Wirecard will provide those workers with a payment card to receive compensation within 24 hours after completing a gig, without charging fees to employees.
The forecasted growth for the real-time payment solution market through 2022 is 100 percent. And more corporates are showing an interest in real-time payments — and financial players are gearing up to help. A recent survey of corporates and payment service providers, conducted by TD Bank at the 2018 NACHA PAYMENTS Conference, found that the potential of faster payments seems to be capturing the imaginations of a significant share of corporate respondents. Forty-two percent of respondents said they believe the integration of real-time payments with online banking will be the most significant innovation in the commercial payments sector over the next three to five years.
That comes to show that fewer workers are taking on assignments as just a side hustle, instead making their freelance work more of a full-time gig.